If I pay off a loan, how do I ensure that I have clear title to my property?
If you borrowed money when you purchased your home or if you have refinanced, it is likely that a deed of trust was recorded in favor of your lender. This document gives the lender a lien on your home until you sell your house or pay off the loan.
At the time of payoff, the lender is obligated to make certain that the title to your property is cleared of the lien. A Reconveyance of the Deed of Trust is the document which releases the lender’s interest in your property and confirms that you have fully paid your loan.
In addition, under the terms of your Policy of Title Insurance, the title insurer assumes liability for the elimination of that paid lien. This policy is your written guarantee that your property is free and clear of liens which were paid off by the title company as a part of your escrow process. This important document is your best protection against any defects in the title to your property and should be a part of every escrow transaction.
Typically, the Reconveyance (release document) is recorded at the County Recorder’s Office, and the recorded original of the document is mailed to you directly from the Recorder. This document, together with your title policy, is your assurance that the title has been cleared of that lien.
Sometimes a lender will issue the Reconveyance and send it directly to the borrower rather than the County Recorder. In that event, the document must be recorded. Your escrow officer or the Recorder’s Office can provide information about this process. If you do not receive the Reconveyance, you might want to check with your lender’s Customer Service Department, explaining that you have paid off your loan and ask them to confirm that the Reconveyance is being properly processed.