Legal Question in Real Estate Law in California

Re: Escrow

In order for your new loan to be made, your new lender will want to make sure that there is a reconveyance of the security interest (the deed of trust) held by your current lender, so it is unlikely that they will agree to finalize the new loan without ensuring that the old loan is paid off. It is NOT necessary for anyone to have the original deed of trust, as a certified copy can be obtained from the recorder's office. Originals of deeds of trust (assuming they are recorded) are not critical; what is important is the original NOTE, as the deed of trust is just the security for repayment of the obligations set out in the note. Also, there are statutory penalites which can be assessed against a lender who refuses to provide a statement showing how much is outstanding on a loan, and a new lender is entitled to rely upon and pay the stated amount owing in the statement; see California Civil Code Section 2943.