Browse Proptionary encyclopedia

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Reconveyance Deed

DEFINITION

A Deed of reconveyance is a type of deed whereby a legal instrument forfeits title held by a lender after the debt has been repaid or settled.

EXPLANATION

If a borrower takes out of mortgage for a property, the lender holds a security interest in that property. When the borrower pays off the loan, the lender releases its security interest in the property. In addition, a lender must provide a deed of reconveyance to a borrower within 30 days of a request.

Furthermore, a deed of reconveyance or a reconveyance deed establishes that a borrower’s mortgage debt has been satisfied. It releases the property title back to the borrower and verifies that he or she is the only owner of the property.

Deed of Reconveyance & Property Liens

In order for one to determine as to whether or not liens placed on a property have indeed been paid in its full sum, this particular deed must have been recorded.

If the property however, did in fact have a lien placed on it, this piece of real estate would therefore not be able to be listed for any type of sale. In some rare instances, the only exemption that may be granted when trying to bypass a lien which places a hold on any sale moving forward, is solely in the case where such a lien will be treated as mortgage payments which will cover the lien costs  from the profits generated through the sale of a property. In order for this to take place and be granted to a certain individual, a recording of a deed of reconveyance must be a part of this entire process when finalizing a sale.

Witnesses & Notary

A notary public is a state approved figure, such as a lawyer, who has the authority to dictate as to whether or not a deed, in this case a reconveyance deed can legally be processed and authorized in accordance with the law. Additionally, some states make it mandatory for a witness co signature on any deed related document. Those states include the following listed.

Arkansas

Georgia

Michigan

Ohio

South Carolina

Vermont

Reconveyance Deed & Foreclosures

Although a deed of reconveyance may shield and protect an individual to some extent when it comes down to property tax payments along with liens, if such property taxes are not made accordingly, foreclosure will always be a possibility, as the banks and government have more power, authority, and influence over virtually any form of loopholes that may tend to cross legal boundaries. There will always be a strict and firm set of rules, laws, and other areas of regulations that by no means be bypassed if it violates any of these measures. Such measures can also include, but not limited to, eviction, seizure of assets and other properties under the same individuals name.

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