how do deeds of release work 
a good way to understand how a deed of release works is to consider it in a situation that s common for many people homebuying most individuals purchase their homes with the help of a mortgage provided by a financial institution the bank providing the funds for the mortgage doesn t just lend the money in good faith it takes a legal claim against the house as collateral until the loan is paid off a mortgage deed of release is then created when the borrower meets all mortgage payment terms or makes a full prepayment to satisfy the loan the lender holds the title to the property until that time and is formally a lienholder of record on the property until full and final payment is made the title provides secured collateral for the loan payments for the life of the loan reducing the default risk for the lender 1the lending institution s legal counsel typically creates the deed of release when the loan has been satisfied it reports that the loan has been paid in full under the terms required it also states that the lien has been removed and the full title has been transferred to the homeowner the homeowner owns the asset free and clear after the title and deed of release are provided to her they are no longer subject to any terms or obligations of the lender the lending account is closed be sure to have the deed of release recorded with the same agency that recorded the original mortgage so you can be absolutely sure that any and all liens are removed types of deeds of releaseemployment agreements are another scenario where a deed of release might be used the document can free both the employer and the employee of any obligations that they had under their employment agreement in some cases a deed of release might give an employee a designated payment this can occur in the case of a severance package the deed of release can include the terms of the severance including payment and the length of time that payments will last following the release it might also identify confidential information that cannot be shared by the employee after termination or restraint clauses that prevent a departing employee from forming a similar business or soliciting customers or clients 1if you re presented with a deed of release in a workplace setting be sure to read it through carefully to ensure that you understand what you re agreeing to example of deed of releasethe most common example of a deed of release can occur when someone buys a home when you take out a mortgage to purchase property the property acts as collateral for the loan meanwhile the lender holds the lien on the home as the entity to which you owe money when you complete your mortgage terms and pay off the loan in full a mortgage deed of release can be created another example of a deed of release is associated with personal guarantees a personal guarantee means that you assume personal responsibility for a debt even if that debt is owed by a business entity that you own if you agree to end a personal guarantee whether the loan has been paid in full or not you could do so through a deed of release agreeing to a uniform commercial code ucc lien for a business loan creates a different set of legal and financial obligations from a personal guarantee 2it s possible to find sample deed of release forms online though you may pay a fee to download them it s also important to ensure that any deed of release form that you re using conforms to your state s legal guidelines for a release of deed contact the federal deposit insurance corp fdic if you ve failed to receive a deed of release because your lending bank failed and went into fdic receivership the fdic indicates that it can usually sort out the problem for you 3the regulator offers an interactive search tool that you can use to find out if your bank was acquired by the government through receivership 