What Is a Deed of Reconveyance?

What Is a Deed of Reconveyance?

A deed of reconveyance, also known as a satisfaction of mortgage in some states, is a legal document that effectively transfers ownership of a property to the homeowner after they've paid off their mortgage loan.

When you take out a mortgage loan, you use the home as collateral in exchange for financing. In other words, you convey financial interest in the property to the lender. If you stop making payments and default on your loan, the lender has a legal right to take possession of the home through foreclosure.

Once you pay off the loan, the deed of reconveyance releases the lender's lien on the property, leaving you with a clear title.

What Is Included in a Deed of Reconveyance?

A deed of reconveyance may look different depending on where you live. However, you'll generally find the following information in the document:

• Property information: This includes the home's address, lot numbers or parcels and any other legal description of the property.
• Borrower details: You'll find the name of each borrower on the loan or deed of trust.
• Lender information: This will include the name and contact information of the lender who held the loan.
• Proof of repayment: The document will include language showing that the loan has been paid in full and the lender's liens have been released.
• Signatures: Both the lender and the borrowers must sign the document, and those signatures must be notarized.

How Long Does It Take to Receive a Deed of Reconveyance?

You'll typically receive the document within four weeks of making your final payment on the mortgage loan. However, there are steps you and the lender will need to take after you receive it.

The entire process may take a couple of months in some cases, especially if you find errors or missing details that need to be corrected.

How Does the Deed of Reconveyance Process Work?

The reconveyance process involves more than just paying off your mortgage loan. Here's what you need to know about how it works and what you'll need to pay attention to.

1. The Lender Creates the Deed of Reconveyance

After you've made your final payment on the mortgage loan, the lender will reach out to the title company to initiate the reconveyance process. The title company will then draw up the deed of reconveyance according to your state's laws and send it to you.

You can generally expect to receive the document within a month of paying off the debt.

2. The Borrower Reviews the Deed

Once you receive the document, you'll want to carefully review it to make sure all the details are accurate. If a mistake becomes public record, it could complicate things if you try to sell the home because clear ownership may not be established.

If you find anything that's inaccurate or missing, reach out to the lender and ask for a corrected deed of reconveyance.

3. The Deed Is Notarized and Filed

To finalize the transfer of ownership, you'll need to sign the deed of reconveyance with a notary public present and file it with your county assessor's office. The county assessor will then record the document, making it public record.

This process may vary depending on where you live, so if you have questions, don't hesitate to reach out to the title company, your lender or the county assessor's office.

Frequently Asked Questions

The Bottom Line

Paying off a mortgage loan is a significant financial milestone. However, before you can say you legally own the property, you'll need to complete the reconveyance process.

As you pay off your loan, reach out to your lender to ask about how the process works and which steps you'll need to take to avoid delays. Once you receive the deed of reconveyance, act promptly to review, sign and get the document recorded to make it official.