When a loan secured by a deed of trust is paid in full, what happens to the title?

• A. Re-convey the deed to the borrower
• B. The lender takes ownership of the property
• C. The title company records a new lien
• D. The borrower forfeits the property

Answer: (C)

When a loan secured by a deed of trust is paid in full, the security interest is released and the title is returned to the borrower. In a deed-of-trust arrangement, the trustee holds the title as security for the loan. Once payoff occurs, the trustee reconveys the title back to the borrower, and a release (or reconveyance deed) is recorded in the county to clear the lien from the public record. This means there’s no new lien created and the borrower does not lose ownership or transfer title to the lender.

So the correct outcome is that the title is reconveyed to the borrower with a lien release recorded. The options implying the lender takes the property, a new lien is created, or the borrower forfeits the property do not reflect how payoff works.