Which term describes the act of transferring the secured property back to the lender while keeping the loan?

Which term describes the act of transferring the secured property back to the lender while keeping the loan?

• A. Forbearance
• B. Modification
• C. Refinance
• D. Reconveyance

Answer: (D)

Reconveyance is the process where the trustee under a deed of trust transfers legal title from the trust back to the borrower after the loan has been fully paid and the lien is released. In a typical deed-of-trust setup, the lender (beneficiary) holds the lien, while the trustee holds the title. When payoff occurs, the lender instructs the trustee to reconvey the title to the borrower, and a reconveyance deed is recorded to clear the lien and return ownership to the borrower. If the scenario described involves transferring the property to the lender while the loan remains in place, that would align more with a deed in lieu of foreclosure, not reconveyance. Reconveyance specifically describes returning the title to the borrower after payoff.

Reconveyance is the process where the trustee under a deed of trust transfers legal title from the trust back to the borrower after the loan has been fully paid and the lien is released. In a typical deed-of-trust setup, the lender (beneficiary) holds the lien, while the trustee holds the title. When payoff occurs, the lender instructs the trustee to reconvey the title to the borrower, and a reconveyance deed is recorded to clear the lien and return ownership to the borrower.

If the scenario described involves transferring the property to the lender while the loan remains in place, that would align more with a deed in lieu of foreclosure, not reconveyance. Reconveyance specifically describes returning the title to the borrower after payoff.