Escrow & Title

What is a 'deed of reconveyance' in Hawaii mortgage payoff?

AA. A deed transferring property from seller to buyer at closing

BB. A document executed by the trustee when a deed of trust is paid off, reconveying clear title back to the borrower/property owner✓ Correct

CC. A deed used when a buyer reconveys a property back to the seller after rescission

DD. A deed transferring title from a foreclosed property to the lender

Explanation

A deed of reconveyance is recorded after a deed of trust (or mortgage) is paid in full. The trustee executes the reconveyance deed, transferring title back to the property owner free of the lender's lien.

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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.

Discount Points

Prepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.