Deed of reconveyance: Definition, process and FAQs

Are you getting close to paying off your mortgage? After you make your final payment, you may be issued a deed of reconveyance – a document that shows that you’ve fully paid off your mortgage loan.

Read on to learn more about what a deed of reconveyance is, how it differs from a deed of trust and how to properly record it with your local government.

What is a deed of reconveyance?

A deed of reconveyance is a legal document that indicates the transfer of a property’s title from a mortgage lender to a borrower – legally referred to as the trustor – in deed of trust states. The deed of reconveyance is issued after the borrower has paid off their mortgage in full.

If you’re looking to sell your house, the deed of reconveyance shows that your property has a clear title, or that there are no outstanding claims or liens against the property.

Some states use deeds of trust instead of mortgages. These deeds document the details of how much money is being borrowed, by whom and from whom. Depending on your state, you may receive a satisfaction of mortgage, which is essentially the same type of document as the deed of reconveyance. You may also receive what’s called a full reconveyance, which is signed by a trustee (a bank, lender or mortgage owner) and a notary public.

Let’s take a closer look at how a satisfaction of mortgage and full reconveyance work.

What is a satisfaction of mortgage?

In mortgage states, you’ll probably receive a satisfaction of mortgage document instead of a deed of reconveyance, though the name of the document varies from state to state. Essentially, this document lifts the mortgage lien on your home.

You should also receive notice that your escrow account will be closed. Any remaining balance in the account will be returned to you.

What is a full reconveyance?

A reconveyance is the return of a property’s title – without the mortgage lien – to the original property owner after they’ve fulfilled their obligations pursuant to the mortgage or deed of trust. In general, it means that the homeowner has finished paying their mortgage loan off and the lender is relinquishing their interest in the property.

If you used a mortgage when you closed on your home, you bought the home with the loan proceeds. In return for that loan, you conveyed a property interest to your lender by signing the mortgage. The mortgage acts as the security instrument in your home that allows the lender to foreclose or take possession of the property if you stop making your mortgage payments and default on the loan.

Whether you get a deed of reconveyance, a satisfaction of mortgage document or a full reconveyance, the meaning is the same: Your loan has been repaid in full and the lender no longer has an interest in your property.

What’s included in the deed of reconveyance document?

When you pay off your mortgage and receive a deed of reconveyance, you can expect it to include some of the following information:

• The name and address of the homeowner (who’s also the mortgage borrower)
• The name of the mortgage lender or trustee
• A description of the real estate property
• The property’s parcel number, which is used to identify the property based on the original deed
• Information that proves the borrower has paid off the mortgage loan and that the property fully belongs to the borrower, not the mortgage lender
• Lines for signatures from the parties involved, including a section for the notary witness

Keep in mind that the information included in the deed of reconveyance can vary by state and locality.

How does the reconveyance process work?

Let’s go over some of the steps involved in transferring the title of the property from the lender to the borrower through the deed of reconveyance.

Step 1: Receive the deed of reconveyance document

Once you’ve repaid your loan in full, your lender contacts the title company to issue a deed of reconveyance in its proper form according to state law. This generally occurs within 3 – 4 weeks of your final payment.

If you have a deed of trust, the title insurance company will often give you a copy of it, along with your deed of reconveyance and the title to your home.

Step 2: Examine the deed for errors

Check the deed of reconveyance for any inaccuracies. Mistakes can happen, and you want to catch them before they’re filed and become part of the public record. Work with the title company to ensure your mortgage payoff is properly documented.

Once you have an accurate deed of reconveyance in hand, get it to your local records office to be filed.

Step 3: Get the deed notarized and filed

Remember that filing this deed is a legal transaction. You must have your deed of reconveyance notarized and filed in public records. Often this means taking your deed of reconveyance to your county assessor’s offices. Recording this deed of reconveyance accurately is essential to providing proof of your ownership of the property and that you paid your loan back.

If the deed does not get filed properly with the property recorder’s office, it can create what’s called a clouded title. This means that nothing shows the lien or encumbrance has been paid, and it can delay or jeopardize a future sale of your home.

This process can vary based on your state or mortgage lender. Make sure you understand the basics before you file a deed of reconveyance with your local recording office.

Reconveyance FAQs

If you have further questions about how a deed of reconveyance works, check out the frequently asked questions below.

Who signs a deed of reconveyance?

The deed of reconveyance must be signed by the trustee holding the deed of trust. It must also be notarized. Some states may require additional witnesses to be present when the deed of reconveyance is signed.

How do I complete the reconveyance?

The reconveyance is complete when you file it with a property clerk for the municipality where the property is located to remove the mortgage lien from the property. The county recorder’s office will then record the change.

What’s the difference between a deed of release and a reconveyance?

A deed of release indicates that the homeowner has completed the terms of the mortgage loan repayment while the deed of reconveyance formally transfers full ownership to the homeowner. Depending on the laws of your state, a homeowner might need both documents to remove the mortgage lien from their home.

What is a full reconveyance form?

If you live in a deed-of-trust state, you can sometimes file a full reconveyance form, signed by the trustee and notarized, to publicly state that you have completed the repayment of your home loan debt.

What happens if a deed of reconveyance is not recorded?

You may run into title issues if you don’t submit the deed of reconveyance to your county clerk’s office, or if it’s filed with incorrect information. This also means the mortgage lien remains on your property.

Contact your lender if you’ve paid off your mortgage but haven’t received a deed of reconveyance, or you haven’t yet submitted the deed of reconveyance form.

The bottom line

A deed of reconveyance signifies the end of your mortgage. Whatever your next step in homeownership may be, paying off your loan is a huge accomplishment and is worth celebrating.

So, what’s next? Whether you’re looking to tap into your home equity or sell and find a new home, your friends at Rocket Mortgage^® can help guide you through the process. Start your application and continue your homeownership journey today.