Escrow & Title
In Colorado, a deed of trust reconveyance (release) occurs when:
AThe property is listed for sale
BThe loan is paid in full and the trustee reconveys the title back to the borrower✓ Correct
CThe borrower defaults on the mortgage
DThe property is refinanced with a new lender
Explanation
When a Colorado deed of trust loan is paid off, the public trustee executes a release of deed of trust (reconveyance), which is recorded in the county records to show that the lien has been satisfied and clear title is restored to the borrower.
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Key Terms to Know
Deed of Trust
A security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.
DeedA written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
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