How to Cancel a Deed of Trust

How to Cancel a Deed of Trust

A deed of trust is a legal document that provides your mortgage lender a lien on your home. The lien attaches to a home for as long as you still owe money under the mortgage loan. California state law requires a mortgage creditor to eliminate the deed of trust in 21 days after you completely pay back the mortgage loan. Technically, the creditor does not really eliminate the action of trust but rather supplies a deed of reconveyance that in effect cancels the deed of trust.

Pay your mortgage off completely. You have no legal right to require a deed of reconveyance so long as you still owe money on your mortgage loan.

Publish a letter to your mortgage lender requesting a deed of reconveyance.

Attach to your own letter evidence that you have completely paid the mortgage off. The evidence may be a statement showing a zero balance owed, a copy of the final payment check or a letter from the creditor which cites that the loan was paid off entirely.

Hire a title company to review your title records and confirm that the creditor actually records a deed of reconveyance. Title companies are professional title searchers and can quickly learn whether your creditor has followed through.

Follow up with the creditor as necessary to make sure it follows through. In the event the lender is uncooperative, consider hiring a real estate attorney to represent you. The lender is going to need to refund you for attorney’s fees, multiplied by three, if it has wrongly failed to provide a deed of reconveyance.

See related