A Nebraska buyer, Rachel, signs a deed of trust at closing. Her lender later sells the loan to a secondary market investor. Rachel continues making payments to a loan servicer. Three years later, Rachel pays off the loan in full. Under Nebraska's Trust Deeds Act, what must occur to clear the deed of trust from the public record?
Correct Answer
B) The trustee must execute and record a deed of reconveyance returning legal title to Rachel.
Under the Nebraska Trust Deeds Act (Neb. Rev. Stat. § 76-1009), when the secured obligation is fully paid, the beneficiary (or its successor) must deliver the deed of trust and the note to the trustee with a written request to reconvey. The trustee then executes and records a deed of reconveyance, which transfers legal title back to the trustor (borrower) and clears the lien from the public record. This process is unique to the deed of trust structure and differs from the satisfaction of mortgage used in mortgage states.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Predatory lending refers to unfair, deceptive, or abusive lending practices that impose unjustified terms on borrowers, often targeting vulnerable populations. It includes practices like excessive fees, inflated appraisals, and unnecessary refinancing.
RESPA is a federal law that requires lenders to provide borrowers with information about settlement costs, prohibits kickbacks and referral fees, and limits escrow account deposits. It applies to federally related mortgage loans.
The secondary mortgage market is where existing mortgage loans are bought and sold between lenders, investors, and government-sponsored enterprises (GSEs) like Fannie Mae, Freddie Mac, and Ginnie Mae.
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