when homeowners refinance their homes with a new mortgage they also receive a deed of reconveyance showing that the previous mortgage has been paid since a new mortgage has been established in a refinancing situation 
second mortgages or home equity loans give the lending institution a security interest in the home as the property often serves as collateral for that loan lenders can assert their rights to foreclose if a borrower defaults on these second loans the deed of reconveyance related to the first mortgage has no effect on the second loan nor protects the homeowner a deed of reconveyance differs from state to state or from lender to lender in states that use trust deeds rather than mortgages a third party known as a trustee will hold the mortgage on behalf of the lender some states use satisfaction of mortgage documents rather than a deed of reconveyance but these serve the same purpose 