Question

When a borrower pays off a note that was secured by a deed of trust, what happens?

1) the lender issues a release deed to the borrower.
2) the borrower receives a document called a satisfaction piece.
3) the deed of trust is cancelled.
4) the trustee issues a deed of reconveyance to the borrower.

Answer 1

Upon the payoff of a note secured by a deed of trust, the trustee issues a deed of reconveyance to the borrower, which releases the property from the lien and is recorded publicly.

Step-by-step explanation:

When a borrower pays off a note that was secured by a deed of trust, the correct answer is that the trustee issues a deed of reconveyance to the borrower. This document signifies that the borrower has fulfilled their payment obligations, and the lien created by the deed of trust no longer affects their property. The deed of reconveyance is recorded with the county recorder or similar official to ensure that the public record accurately reflects the payoff of the debt.