Hi - my name is Kirk and I'm a Real Estate litigation
attorney. Thanks for your question.
From a procedural standpoint, the information provided by Mr. Kenneth is correct. In other words, if the loan information in the complaint was wrong, that would have been something you would have addressed in the response to the foreclosure complaint OR via a motion. Also, if the information related to a second deed of trust that wasn't being foreclosed, it would not have much bearing on the proceeding. I understand that it may have possibly hindered getting financing from a lender, but it should not have prevented it IF an independent title search proved the information to be incorrect.
In any event, a "reconveyance deed" is an official document from a mortgage holder releasing the debtor from the mortgage. It is evidence that the mortgage has been paid in full. The mortgage note is marked paid, the original mortgage is returned and a deed of reconveyance is issued to the home owner showing the mortgage has been paid off.
A deed of reconveyance must be recorded in the public records of the county where the property is located. If the deed of reconveyance is lost or destroyed, it creates a title nightmare and puts a cloud on the title because there is nothing to show that the loan has been paid.
So if you want to redeem the property, you would still have to pay off the mortgage, and if you're trying to get financing, you should be able to prove that the other lien identified in the paperwork doesn't exist with an independent title search.