Deed Of Full Reconveyance Deed Of Full Reconveyance California: Fill & Download for Free

Yes, technically. Where I live in California we secure a home loan and the recording document used is a “deed of trust”.But in Alaska for example, they call it a “Mortgage” and it is basically the same thing but the foreclosure process is different.Deed of Trust works like a car loan where you don’t own the pink slip until paid in full.When the security instrument is a “Mortgage” it works as if you financed it, as well as received the pink slip before paid in full.And the Trust aspect is the trustee who usually works with Title, and when in default the property actually gets signed over to them for them to complete a “trustee sale”. And if you paid the loan off in full, the trustee has to record the full reconveyence which is just saying debt paid in full and releases property to you.Lastly, you can get a mortgage on a trust deed but that wouldn’t be smart for the lender side as you have more rights that way and definitely not the standard.ThanksTyler HollinghurstMortgage Loan ConsultantNMLS# 1616516 DRE# 02032654

There may be more information necessary to accurately answer your question. Taking your question at face value, a mortgage is a legal instrument. In some states the legal term may be a mortgage. In other states, it may be a deed of trust (California is a Deed of Trust). You and your former spouse likely signed something similar to the image below.The Deed of Trust gives the lender certain rights to the property. If you or your former spouse make all monthly payments on time, or pay off the loan early, the lender will file a reconveyance. This eliminates the lenders rights to the property.But, it may take 15, 20, or even 30 years to pay off a loan. During this time, if a monthly payment is made late, the lender will use the Deed of Trust to legally protect their rights to the property. This could mean eventually obtaining ownership to the property.Before a lender takes the legal path of gaining ownership in a property that is past due on monthly payments, we will explore typical remedies. First, the lender had you and your spouse sign a promissory note (IOU) as seen above. In case you are unaware, this IOU likely stipulates the two of you are jointly obligated to make monthly payments on time until the loan is paid off. In addition, each of you individually are responsible to make sure the entire payment is made on time. This is important to your situation. Just because the court said your former spouse keeps the house and current mortgage, does not free you from liability. If you signed a note stating you will pay on time until paid in full, it does not matter if you live in the home, have rights to the home, or even waived your rights to the home. If you signed the dotted line, you stated you will make the monthly payment even if your former spouse does not.This brings me to the heart of your question. If your former spouse is making monthly loan payments on the loan signed by both of you, your individual credit reports will reflect this debt. But, guess what? In the future, if your former spouse falls behind on the mortgage payments, your credit report should reflect this too (late payments, notice of default, foreclosure). These derogatory marks will dramatically effect your credit and credit score. So, the bigger question, do you trust your former spouse to continue making all remaining loan payments on time until the loan is paid off? You may have guessed, many answer no. To give this topic context, its not that the former spouse acts irresponsibly. In fact, many do not. But, “what if’s” do happen (accident, illness, layoff). The simple fact, there is rarely any personal benefit to being liable for a debt which there is really no upside. Imagine expanding this situation. What if you were responsible for ten different loans, with each loan tied to an asset (10 homes), but you have no right to any of the homes? Share this situation with a friend. Ask what they would do. You can anticipate the answer, get off the loan if you have no right to the home.If this is the case, it has become more common for a final divorce decree to stipulate the person keeping the residence is to qualify for their own loan at some point in the future (maybe one year in the future, or maybe at the time of divorce settlement). As part of this new loan, the prior loan must be paid in full. Once the prior loan is paid off, a reconveyance is completed. This would mean the IOU signed by you and your former spouse is paid in full (terminated). If the prior loan is paid in full, there would be no future credit reporting on any credit report. Moving forward, the new loan, in the name of your former spouse only, will not involve you. The only person who's credit will be impacted on the new loan is your former spouse.Ask me any real estate or mortgage question. If you are thinking of purchasing a home, switching from an adjustable to a fixed rate, or want to pull equity, I can help with the process. Contact me today.

No. When you pay off a mortgage, the lender will file a release of lien or some equivalent document. In my state, California, a deed of reconveyance effectively cancels the lender’s security interest in the property.I small digression is in order here. Many people believe that you don’t “own your house” until you pay off the mortgage. This is completely incorrect. You own your house 100% from the instant you receive the grant deed for the property. This is true regardless of the size of the mortgage. Even if you have a loan for 100% of the home’s purchase price, as with a VA or USDA loan, you still own the property 100%.Ownership of real estate is legally referred to as possessing a “bundle of rights.” These include the ability to keep others out of the property, the ability to get rid of it by whatever means you want, and the ability to “enjoy” the property in any way you want’ consistent with the law. The lender possesses a security interest only. This is what gives them the right to get their money if the owner stops making the payments they agreed to make, through a legal process called foreclosure. The lender does not have any of the bundle of rights that define ownership.With all that said, there could be some possibilities where a lender might foreclose after the borrower had paid off the loan.They made an error. This has happened before. A lender filed a Notice of Default on a free-and-clear property where they had formerly held the loan. It was a very expensive mistake for them. There was an interesting case of wrongful foreclosure that cost the lender $45 million.[1] The interesting aspect of this was that the borrowers actually had gone into default, so the foreclosure itself (at least at the outset) was appropriate. The synopsis of the case makes for interesting readingThe borrower thought they’d paid the loan off in full, but had not. If a loan is paid off through an escrow (generally the best way), the escrow holder’s responsibility to to make sure the payoff is correct, and that all necessary documents are recorded. If there is a balance after the believed payoff, such as for prorated interest or administration fees, the bank is technically correct. No bank wants to foreclose, however, and will go to significant lengths to avoid the processI hope this is helpful.Footnotes[1] $45 Million Punitives in Wrongful Foreclosure/Automatic Stay Case