Finance

In Hawaii, what is a 'release deed' (deed of reconveyance) used for?

AA. Transferring ownership to a new buyer

BB. Releasing the mortgage lien when a loan is fully paid off, returning clear title to the borrower✓ Correct

CC. Releasing a tenant from a lease obligation

DD. Releasing a judgment lien from a property

Explanation

When a mortgage or deed of trust is paid in full, the lender issues a deed of reconveyance (or satisfaction of mortgage) that releases the lien and restores clear title to the property owner.

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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.

Deed

A written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).

Lien

A financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.

Debt-to-Income Ratio (DTI)

A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.