The state of Washington is a trust deed state, meaning the security for a mortgage is a deed of trust that is recorded at the county recorder where the home is located. The evidence of ownership is a transfer deed, such as a grant deed or warranty deed. A transfer deed is separate from a deed of trust that relates to a loan. When you purchased you home, you should have been given a grant deed that “granted” title to you.
While you already hold title to the property, lenders in the state of Washington must send you a deed of reconveyance within 30 days of the date that they received your final payoff.
Verify Title on the Property
Verify that the county recorder shows you as the legal owner of the property. You can request a copy of a property profile from your real estate agent. It should show you as the legal owner and the vesting in which you hold title — for example: “John Smith, a single man.” The property profile will also usually show the deeds of trust that have been recorded to secure any home loans. The fact that you have a loan on the property does not affect your ownership of the property. You are already the owner even though there was a loan.
Obtaining a Reconveyance When a Mortgage is Paid Off
In the state of Washington, when you pay off a mortgage, the lender must issue a deed of full reconveyance on the trust deed that secured the mortgage. The reconveyance deed is a recorded document that eliminates the lien that was recorded on the property. After the reconveyance is recorded by the lender, the property does not have any deeds of trust and is considered “free and clear.” The county recorder sends you the reconveyance after it has been recorded. After you pay off a mortgage in the state of Washington, your lender is required to issue a deed of reconveyance within 30 days of receiving the payoff. This shows that your property is free of encumbrances.
Anytime you pay off a mortgage, you should follow up with the lender to verify that a deed of reconveyance on the debt has been issued. If not, the property records will still reflect a loan showing the original balance of the loan when the deed was recorded. This could be a problem if you try to borrow on the home in the future. Most lenders have a customer service phone number through which you can inquire about the reconveyance status. Be sure to have your loan number when you contact the lender.
When you receive the deed of reconveyance from the county recorder, verify that the address, lender and loan amount are correct. This is to insure that the loan has been properly canceled. If there is a problem with the reconveyance, it is better to deal with it early, when any problem can then be rectified immediately by the lender.
- NOLO: What is a Deed of Reconveyance?
- USLegal: Washington Assignment And Satisfaction Of Mortgage Law
- American Bar Association. "Commercial Real Estate FAQs: What Is the Difference Between a Mortgage and a Deed of Trust?" Accessed July 31, 2020.
- Cornell Law School. "Deed of Trust." Accessed April 6, 2020.
- Consumer Financial Protection Bureau. "Deed of Trust." Accessed July 5, 2020.
- American Bar Association. "Glossary of Real Estate Terms: Deed of Trust." Accessed July 31, 2020.
- Consumer Financial Protection Bureau. "How Does Foreclosure Work?" Accessed July 5, 2020.
- American Bar Association. "Mortgage Note -- Deed of Trust Note." Accessed July 31, 2020.
I graduated with a degree in Finance from Cal Poly Pomona and have held an active Brokers License for over 30 years. I also owned an accounting and tax practice for ten years. I'm an expert in all matter relating to mortgages, accounting, small businesses and taxation, and investing.