Satisfaction, Release or Cancellation of Mortgage by Individual
Assignments Generally: Lenders,
or holders of mortgages or deeds of trust, often assign mortgages or deeds
of trust to other lenders, or third parties. When this is done the
assignee (person who received the assignment) steps into the place of the
original lender or assignor. To effectuate an assignment, the general
rules is that the assignment must be in proper written format and recorded
to provide notice of the assignment.
Satisfactions Generally: Once a mortgage
or deed of trust is paid, the holder of the mortgage is required to satisfy
the mortgage or deed of trust of record to show that the mortgage or deed
of trust is no longer a lien on the property. The general rule is that
the satisfaction must be in proper written format and recorded to provide
notice of the satisfaction. If the lender fails to record a satisfaction
within set time limits, the lender may be responsible for damages set by
statute for failure to timely cancel the lien. Depending on your state,
a satisfaction may be called a Satisfaction, Cancellation, or Reconveyance.
Some states still recognize marginal satisfaction but this is slowly being
phased out. A marginal satisfaction is where the holder of the mortgage
physically goes to the recording office and enters a satisfaction on the
face of the the recorded mortgage, which is attested by the clerk.
Florida Law
Execution of Assignment or Satisfaction: Must
be signed by the mortgagee.
Assignment: No assignment of a mortgage
upon real property or of any interest therein, shall be good or effectual
in law or equity, against creditors or subsequent purchasers, for a valuable
consideration, and without notice, unless the assignment is contained in
a document which, in its title, indicates an assignment of mortgage and
is recorded according to law.
Demand to Satisfy: Upon full payoff of
the mortgage, the mortgagor may demand of the mortgagee that satisfaction
be recorded. The mortgagee then has 60 days to comply, or face liability.
Recording Satisfaction: Within 60 days
of the date of receipt of the full payment of the mortgage, lien, or judgment,
the person required to acknowledge satisfaction of the mortgage, lien,
or judgment shall send or cause to be sent the recorded satisfaction to
the person who has made the full payment.
Marginal Satisfaction: Not allowed.
Penalty: In the case of a civil action
arising out of the failure of the mortgagee to properly record, within
30 days of demand, a satisfied mortgage, the prevailing party shall be
entitled to attorney's fees and costs, and shall be guilty of a misdemeanor
of the second degree.
Acknowledgment: An assignment or satisfaction
must contain a proper Florida acknowledgment, or other acknowledgment approved
by statute.
Florida Statutes
701.01 Assignment.--Any mortgagee may assign and transfer
any mortgage made to her or him, and the person to whom any mortgage may
be assigned or transferred may also assign and transfer it, and that person
or her or his assigns or subsequent assignees may lawfully have, take and
pursue the same means and remedies which the mortgagee may lawfully have,
take or pursue for the foreclosure of a mortgage and for the recovery of
the money secured thereby.
701.02 Assignment not effectual against creditors unless recorded
and indicated in title of document.--
(1) No assignment of a mortgage
upon real property or of any interest therein, shall be good or effectual
in law or equity, against creditors or subsequent purchasers, for a valuable
consideration, and without notice, unless the assignment is contained in
a document which, in its title, indicates an assignment of mortgage and
is recorded according to law.
(2) The
provisions of this section shall also extend to assignments of mortgages
resulting from transfers of all or any part or parts of the debt, note
or notes secured by mortgage, and none of same shall be effectual in law
or in equity against creditors or subsequent purchasers for a valuable
consideration without notice, unless a duly executed assignment be recorded
according to law.
(3) Any assignment of a mortgage, duly executed
and recorded according to law, purporting to assign the principal of the
mortgage debt or the unpaid balance of such principal, shall, as against
subsequent purchasers and creditors for value and without notice, be held
and deemed to assign any and all accrued and unpaid interest secured by
such mortgage, unless such interest shall be specifically and affirmatively
reserved in such assignment by the assignor, and no reservation of such
interest or any part thereof shall be implied.
701.04 Cancellation of mortgages, liens, and judgments.--
(1) Within 14 days after receipt of the written request of a mortgagor,
the holder of a mortgage shall deliver to the mortgagor at a place designated
in the written request an estoppel letter setting forth the unpaid principal
balance, interest due, and the per diem rate. Whenever the amount
of money due on any mortgage, lien, or judgment shall be fully paid to
the person or party entitled to the payment thereof, the mortgagee, creditor,
or assignee, or the attorney of record in the case of a judgment, to whom
such payment shall have been made, shall execute in writing an instrument
acknowledging satisfaction of said mortgage, lien, or judgment and
have the same acknowledged, or proven, and duly entered of record in the
book provided by law for such purposes in the proper county. Within
60 days of the date of receipt of the full payment of the mortgage, lien,
or judgment, the person required to acknowledge satisfaction of the mortgage,
lien, or judgment shall send or cause to be sent the recorded satisfaction
to the person who has made the full payment. In the case of a civil
action arising out of the provisions of this section, the prevailing party
shall be entitled to attorney's fees and costs.
(2) Whenever a writ
of execution has been issued, docketed, and indexed with a sheriff and
the judgment upon which it was issued has been fully paid, it shall be
the responsibility of the party receiving payment to request, in writing,
addressed to the sheriff, return of the writ of execution as fully satisfied.
701.05 Failing or refusing to satisfy lien; punishment for.--Any
person entitled to and receiving the payment of the amount of money due
upon any mortgage, lien, or judgment, who shall fail for 30 days after
written demand made by the person paying the same, to cancel and satisfy
of record, as provided by law, any such mortgage, lien or judgment so paid,
shall be guilty of a misdemeanor of the second degree, punishable as provided
in s. 775.082 or s. 775.083.
701.06 Certain cancellations and satisfactions of mortgages
validated.--All cancellations or satisfactions of mortgages made prior
to the enactment of chapter 4138, Acts of 1893, by the mortgagee or assignee
of record of such mortgage entering same on the margin of the record of
such mortgage in the presence of the custodian of such record and attested
by the said custodian and signed by said mortgagee or assignee of record
of such mortgage, shall be valid and effectual for every purpose as if
the same had been done subsequent to the enactment of chapter 4138, Acts
of 1893.
