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Sunday, 9 December 2012

Deed Of Reconveyance

The deed of trust is a deed by the borrower to a trustee for the purposes of securing a debt. In most states, it also merely creates a lien on the title and not a title transfer, regardless of its terms. It differs from a mortgage in that, in many states, it can be foreclosed by a non-judicial sale held by the trustee through a "power of sale". It is also possible to foreclose them through a judicial proceeding. Deeds of trust to secure repayments of debts should not be confused with trust instruments that are sometimes called deeds of trust but that are used to create trusts for other purposes, such as estate planning. Though there are superficial similarities in the form, many states hold deeds of trust to secure repayment of debts do not create true trust arrangements. Reconveyance deed is the mortgage by conveyance (aka mortgage in fee) or, when written, the mortgage by charter and reconveyance and took the form of a feoffment, bargain and sale, or lease and release. Since the lender did not necessarily enter into possession, had rights of action, and covenanted a right of reversion on the borrower, the mortgage was a proper collateral security. Thus, a mortgage was on its face an absolute conveyance of a fee simple estate, but was in fact conditional, and would be of no effect if certain conditions were met.