Legal Question in Real Estate Law in California

A transfer of real property from X to Y is complete and final upon delivery of a properly-executed deed by the grantor, X, and its acceptance by the grantee Y (or their agents). Thereafter, X, the grantor, has no rights and no claim to the granted interest, period (absent fraud).

If, thereafter, the grantee (Y) becomes a grantor and deeds the property back to the original grantor (X), the same rules apply. X becomes the owner again,

Now, you add an interesting wrinkle. Y dies, but the deed hasn't yet been recorded by X.

The legal issue will probably be whether the deed was delivered to X by Y during Y's lifetime. A deed must be delivered and accepted during the lifetime of both the grantor and the grantee to transfer title.

An unrecorded deed is valid and binding upon the parties thereto, and others with actual or constructive notice thereof. An unrecorded deed will not be valid against the claim of a bona fide purchaser of the property who records first.

I hope this is somewhat helpful. The loan is not particularly important in determinig ownership, nor is whether the deceased had a will or trust (unless he had one and it has unusual terms). If this matter is going to court, you'll need to have stronger evidence than just "being sure" that there was an unrecorded deed back. You (or someone) will need admissible evidence of the deed and its delivery and acceptance prior to the death of the maker.