Note and Deed of Trust

• When you borrow money, it's common to use real estate as security for the loan. Two documents you will sign to complete the transaction are a promissory note and deed of trust. The deed of trust will be recorded with the county recorder to notify any potential buyers or other lenders that your property has been pledged to secure a loan.
  
  

Possession of Documents

• The original note and deed of trust will be held by the "beneficiary" of the deed of trust, which is the person or financial institution that gave you the loan. The originals will remain in the beneficiary's possession until the loan is repaid.
  
  

Demand for Reconveyance

• When you make the final loan payment, you are entitled to receive the original promissory note. With respect to the deed of trust, you will need more than the original document returned to you to clear title to your property. You will need the beneficiary to sign a reconveyance indicating that the deed of trust is no longer in effect and the obligation it secured has been cleared. You can ask for this when you make the final payment.
  
  

Problem Beneficiary

• If the beneficiary does not provide the reconveyance, for whatever reason, and you need to clear title to your property, most state laws provide for a simplified procedure for clearing the deed of trust from title to the property by using a surety bond.
  
  

Clearing Title

• For example, in California, Civil Code Section 2941.7 permits you to sign a declaration indicating the unavailability or uncooperativeness of the beneficiary regarding the reconveyance. The declaration is filed with the county recorder's office along with a surety bond in an amount specified by the statute. Upon recording the documents, title to your property is cleared.