Form – Substitution of Trustee and Reconveyance

Substitution of Trustee and Reconveyance, is used in a very specific and positive situation in California real estate. It serves two important functions simultaneously:

Primary Purpose

This form is used when a property owner has fully paid off their mortgage or deed of trust, and the lender needs to both appoint a trustee to handle the release and formally clear the title of the loan lien.

The Two Actions This Form Accomplishes:

1. Substitution of Trustee

• The current lender (Beneficiary) appoints a specific trustee to handle the reconveyance process
• This is often necessary because the original trustee named in the deed of trust may no longer be in business or available
• The new trustee is authorized to execute the reconveyance

2. Reconveyance

• This is the legal release of the mortgage lien from the property title
• The trustee formally reconveys the title interest back to the property owner, free and clear of the debt
• This clears the cloud on the title and proves the loan has been satisfied

When This Form Is Used

This form is typically recorded when:

• A homeowner has made their final mortgage payment
• The loan has been paid off through refinancing
• The debt has been otherwise satisfied
• The original trustee is unavailable and a new one needs to be appointed to handle the reconveyance

Why This Combined Form Is Needed

Instead of using two separate documents (one to substitute the trustee and another for the reconveyance), this combined form streamlines the process by having both actions happen in one recorded document.

The Process

1. Loan is paid in full – Borrower satisfies the mortgage debt
2. Lender executes this form – Appoints a trustee and directs them to reconvey the title
3. Trustee signs – Acknowledges the appointment and agrees to reconvey
4. Form is recorded – Filed with the county recorder to provide public notice that the lien has been released
5. Title is cleared – The property title no longer shows the mortgage as an encumbrance

Importance for Homeowners

For a homeowner, the recording of this document is excellent news – it provides proof that:

• Their mortgage is completely paid off
• The lender no longer has any claim on the property
• They own their home free and clear
• The title can be insured as unencumbered by that debt

This is the document that formally completes the home ownership journey for many borrowers, turning them from “homeowners with a mortgage” to “outright owners” of their property.

SUBSTITUTION OF TRUSTEE AND RECONVEYANCE

RECORDING REQUESTED BY:
AND WHEN RECORDED MAIL TO:

Name: _____________________________________________________
Street Address: _____________________________________________
City & State: _______________________________________________

SPACE ABOVE THIS LINE FOR RECORDER’S USE

DATE: ________, 20, at ____________________________________________________, California.

_______________________________________________________________________,
as the present Beneficiary, under a Deed of Trust dated _________________________,
recorded on __________________________________, as Instrument No. __________________,
in the Official Records of _________________________ County, California,
executed by _______________________________________________________________________,
as the Trustor,

HEREBY APPOINTS _____________________________________________,
as the Trustee under the Deed of Trust.

Trustee, on written request from the present Beneficiary of the Deed of Trust,
HEREBY RECONVEYS and releases, to the persons legally entitled thereto,
the interest held by Trustee under the Deed of Trust.

(Name of Beneficiary)

(Signature of Beneficiary)

(Signature of Substitute Trustee)

STATE OF CALIFORNIA
COUNTY OF _______________________________________________

On ______________________________________________ before me,

(Name and title of officer)

personally appeared __________________________________________
_________________________________________________________,
who proved to me on the basis of satisfactory evidence to be the person(s)
whose name(s) is/are subscribed to the within instrument and acknowledged
to me that he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s),
or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature ___________________________________________________
(Signature of notary public)

(This area for official notarial seal)

Prepared by: Agent ____________________________ Broker ____________________________
Phone _______________________________ Email _______________________________

Note: This document must be properly notarized and recorded with the County Recorder’s office to be effective.