How a deed of reconveyance works after a mortgage loan

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Assignment:

a. A deed of reconveyance is a document that, after the loan has been paid off, transfers the title to a property from a mortgage lender to the borrower. When a mortgage is paid in full, a deed of reconveyance is issued.

b. The title has been transferred from the lender to the borrower, as evidenced by the deed of reconveyance.

c. The homeowner will have difficulty selling the house if a deed of reconveyance is not recorded in the county or recorder's office in their area.

d. How a Deed of Reconveyance Works After a mortgage loan has been paid in full, borrowers receive a deed of reconveyance.

e. The lender is the one who drafted the document, which is notarized, includes a legal description of the property, and is recorded in the county where the property is located.

f. Any property title search will reveal that the lien has been paid in full. The borrower is no longer at risk of foreclosure as the loan has been paid off.

g. A deed of trust is a contract between a homeowner and a mortgage lender that stipulates that the homeowner will pay back the loan and that the mortgage lender will retain legal title to the property until the loan is paid in full.

h. A property cannot be sold if there is a lien on it. However, the recording of the deed of reconveyance becomes a part of the closing process of the sale if an existing mortgage will be satisfied from the proceeds of the home sale.

i. A title insurance company typically handles the recording of the deed of reconveyance. Since a new mortgage has been established in a refinancing situation, homeowners receive a deed of reconveyance indicating that the previous mortgage has been paid off when they refinance their homes with a new mortgage.

j. As the property frequently serves as collateral for that loan, second mortgages and home equity loans grant the lending institution a security interest in the property. If a borrower defaults on these second loans, lenders have the right to foreclose.The first mortgage deed of reconveyance does not affect the second loan or safeguard the homeowner.

Reference no: EM133279073

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