Definition & Meaning
A Release of Deed of Trust form, often referred to as a Deed of Reconveyance, is a crucial legal document in real estate transactions. It is executed by the lender, also known as the beneficiary, to officially remove a lien from a property once the homeowner, or grantor, has fully repaid their loan. This document signifies that the debt has been satisfied and clears the property title, making it free of any encumbrances related to the original loan. The release is typically recorded with the county clerk's office to ensure public record accuracy.
How to Use the Release of Deed of Trust
The Release of Deed of Trust is primarily used when a borrower pays off their mortgage or home equity loan. Once the loan is paid in full, the lender must complete and sign the release form to remove the lien from the property. This process is essential for the homeowner to obtain clear title to their property, which is necessary for future transactions such as selling or refinancing the home.
For example, if a homeowner in Missouri pays off their mortgage, they should request the lender to complete the deed of release. Once the form is signed and recorded, the homeowner can confidently proceed with selling their home, knowing there are no outstanding liens.
How to Obtain the Release of Deed of Trust
To obtain a Release of Deed of Trust, a homeowner should first contact their lender after paying off the loan. The lender may require proof of payment, such as the final payment receipt or a statement indicating the loan balance is zero. Once the lender verifies the payment, they will prepare the release form.
In some cases, lenders may charge a fee for processing the release. Homeowners should inquire about any associated costs and ensure they receive a copy of the completed form once it is executed. It is advisable to check with the local county office regarding specific submission requirements.
Steps to Complete the Release of Deed of Trust
Completing the Release of Deed of Trust involves several key steps:
- Step 1: Confirm loan payoff with the lender. Ensure that all payments are completed and that the loan balance is zero.
- Step 2: Request the Release of Deed of Trust form from the lender. This can often be done through customer service or the lender's website.
- Step 3: Review the form for accuracy. Ensure that all information, including property details and borrower names, is correct.
- Step 4: Have the form signed by the lender or their authorized agent. Notarization may be required depending on state laws.
- Step 5: Submit the completed form to the appropriate county office for recording. Check for any local fees that may apply.
Why Should You Release the Deed of Trust?
Releasing the Deed of Trust is essential for several reasons:
- Clear Title: It ensures the property title is free from liens, making it easier to sell or refinance in the future.
- Proof of Payment: The release serves as official documentation that the mortgage obligation has been fulfilled, protecting the homeowner's interests.
- Legal Compliance: Recording the release is often a legal requirement, preventing potential disputes over property ownership.
Who Typically Uses the Release of Deed of Trust?
The Release of Deed of Trust is primarily used by homeowners who have fully paid off their mortgages or home equity loans. Additionally, lenders, such as banks or credit unions, are responsible for issuing the release once the debt is satisfied. Real estate professionals, including agents and attorneys, may also be involved in the process to ensure proper documentation and compliance with local laws.
Important Terms Related to Release of Deed of Trust
Understanding key terms associated with the Release of Deed of Trust can help clarify the process:
- Beneficiary: The lender or financial institution that holds the mortgage and benefits from the loan.
- Grantor: The borrower or homeowner who takes out the loan and is responsible for repayment.
- Liens: Legal claims against a property that must be resolved before clear ownership can be established.
- Promissory Note: The legal document that outlines the terms of the loan, including repayment details.
State-Specific Rules for the Release of Deed of Trust
Each state in the U.S. may have different regulations regarding the Release of Deed of Trust. For instance, some states require notarization of the release, while others may have specific forms that must be used. It is important for homeowners to check with their local county recorder's office or a legal professional to understand the requirements applicable in their state.
In Missouri, for example, the release must be filed with the county clerk's office where the property is located. Homeowners should ensure they comply with any state-specific documentation or filing fees.
