Despite its name, a deed of reconveyance can be a significant document in your financial journey. This deed transfers the title of your property from your mortgage lender back to you once you’ve fully repaid your loan.

What is a deed of reconveyance?

A deed of reconveyance is a document that confirms you’ve completely repaid your mortgage. It signifies the transfer of property ownership from your lender back to you.

Throughout the mortgage term, you were the legal owner of the property, but the lender held a lien against it. Once the loan is fully repaid, the lender must remove this lien by issuing a deed of reconveyance.

“In some states, this document may also be referred to as a mortgage satisfaction,” says Megan Hernandez, Director of Marketing and Public Relations at the American Land Title Association.

What is a satisfaction of mortgage?

A satisfaction of mortgage is essentially the same as a deed of reconveyance; both documents serve the same purpose. They confirm that a borrower has fully repaid their mortgage and that the lien on the property has been removed. A satisfaction of mortgage document typically includes details about the repaid loan and outlines the conditions under which the lender has released the lien.

What is a full reconveyance?

A full reconveyance, also known as a deed of reconveyance, is a document that confirms your loan has been completely paid off and that the mortgage lender no longer holds a lien on the property. In California, this document is specifically referred to as a full reconveyance form.

What information is included in a deed of reconveyance?

A deed of reconveyance generally includes the following details:

  • Name and address of the homeowner or mortgage borrower
  • Name of the lender or trustee
  • Legal description of the property, including the parcel number as listed in the original deed
  • Confirmation that the borrower has fulfilled their obligation, with the property now fully belonging to the borrower
  • Signatures of the involved parties and a notary stamp

How a deed of reconveyance works

Once you pay off your mortgage, the lender—often referred to as the “trustee”—will prepare a deed of reconveyance. This document is then signed by the lender and notarized.

State laws typically mandate that the lender either provide you with the deed or submit it to the county recorder within a specific timeframe, usually between 30 and 60 days, according to Hernandez.

If the lender sends the deed directly to you, it’s your responsibility to file it with your local recording office.

If you’re selling your home and haven’t yet paid off your mortgage, the deed of reconveyance still plays a crucial role in the closing process. The buyer’s funds will be used to pay off the remaining mortgage balance, which prompts the issuance of the deed. In such cases, the title company usually manages the recording of the deed.

“Before closing, the title company will request a payoff statement from your lender to confirm the total amount owed up to the closing date,” explains Hernandez. “At closing, the title company will send the payoff amount to your lender and provide proof of this payment to the buyer’s lender.”

Example of the reconveyance process

Unless you buy a home with cash, you’ll most likely have a mortgage. For example, if you take out a $300,000 mortgage to purchase your home, the property serves as collateral for the loan while you’re repaying it. Once you’ve fully paid off the mortgage, the lender will issue a deed of reconveyance to confirm that the lien on your property has been released.

Why do you need a deed of reconveyance?

When you sell your home, the deed of reconveyance proves that the property has a clear title, free from any outstanding mortgages or other liens. Without this document, selling your home could be challenging, as buyers will want assurance that the title is unencumbered.

Even if you’re not selling, a deed of reconveyance is still important. It serves as proof that you’ve fully paid off your mortgage, preventing the lender from making any future claims on the property.

How long does it take to receive a deed of reconveyance?

The time it takes to receive your deed of reconveyance can vary depending on your state and lender. Typically, it may take up to two months to receive the document after you’ve fully repaid your loan. Many states have laws specifying the timeframe within which lenders must provide a deed of reconveyance.

What happens if a deed of reconveyance isn’t recorded?

If your reconveyance hasn’t been recorded yet, there’s no need to panic.

“The mortgage is considered paid off as soon as the full amount is repaid,” explains Hernandez. “Recording the satisfaction is just a formality that proves the mortgage has been paid. As long as you have documentation showing that you’ve settled your mortgage, you don’t need to worry about any further claims from the lender.”

If you’re concerned about getting your deed of reconveyance, contact your lender to understand their process for handling loan payoffs and recording deeds. Lenders are motivated to manage this process correctly, as failing to comply with state regulations can result in penalties or even legal action.