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What is Reconveyance in Trust Deed Investing?

What is Reconveyance?

Reconveyance is the procedure of transferring the title of ownership back to the borrower after their loan has been fully paid.

Why Does Reconveyance Matter in Trust Deed Investing

When a private money loan is executed, a deed of trust is created to represent the debt. When this happens the lender takes ownership of the property until the borrower pays off their debt.

When a note secured by a deed of trust is paid off, Civil Code Sec. 2941 requires the lender to initiate cancellation of the debt. To satisfy this requirement, the lender executes a request for reconveyance.

The request for reconveyance is submitted to the county where the property is located and where the deed of trust is on file. Once the deed of reconveyance has been processed the public archive is updated as paid in full with no liens against it.

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