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.
Ohio Law
Execution of Assignment or Satisfaction: An assignment or satisfaction must be signed by the mortgagee or authorized representative.
Assignment: An assignment must be in writing and recorded. Except in counties in which a separate instrument is required to assign or partially release a mortgage as described in section 5301.32 of the Revised Code, a mortgage may be assigned or partially released by the holder of the mortgage, by writing the assignment or partial release on the original mortgage or upon the margin of the record of the original mortgage and signing it. Also allowed by separate instrument, see code sections 5301.31 and 5301.32, below.
Demand to Satisfy: Not required.
Recording Satisfaction: Except in a county in which the county recorder has elected to require that all satisfactions of mortgages be recorded by separate instrument as allowed under section 5301.28 of the Revised Code, when recording a mortgage, county recorders shall leave space on the margin of the record for the entry of satisfaction, and record therein the satisfaction made on the mortgage.
Marginal Satisfaction: Allowed. Unless required by specific county to be recorded by separate instrument.
Penalty: If satisfaction is not recorded within 90 days following the full satisfaction of the mortgage, then the Mortgagor may recover, in an action at law, the sum of $250, and other recoverable damages.
Acknowledgment: An assignment or satisfaction must contain a proper Ohio acknowledgment, or other acknowledgment approved by Statute.
Ohio Statutes
5301.28 Release of mortgage; assignment.
When the mortgagee of property within this state, or the party to whom the mortgage has been assigned, either by a separate instrument, or in writing on that mortgage, or on the margin of the record of the mortgage, which assignment, if in writing on the mortgage or on the margin of the record of the mortgage, need not be acknowledged, receives payment of any part of the money due the holder of the mortgage, and secured by the mortgage, and enters satisfaction or a receipt for the payment, either on the mortgage or its record, that satisfaction or receipt, when entered on the record, or copied on the record from the original mortgage by the county recorder, will release the mortgage to the extent of the receipt. In all cases when a mortgage has been assigned in writing on that mortgage, the recorder shall copy the assignment from the original mortgage upon the margin of the record of the mortgage before the satisfaction or receipt is entered upon the record of the mortgage.
In a county in which the county recorder has determined to use the microfilm process as provided by section 9.01 of the Revised Code, the county recorder may require that all satisfactions of mortgages be made by separate instrument. The original instrument bearing the proper endorsement may be used as such a separate instrument. That separate instrument shall be recorded in the county recorder's official records. The county recorder shall charge the fee for the recording as provided by section 317.32 of the Revised Code for recording mortgages.
5301.29 Releases of mortgages made valid.
When any release, cancellation, or satisfaction of a mortgage of real estate has been of record for more than twenty-one years in the office of the county recorder of the county in which such real estate is situated, and the record thereof shows that there is a defect in such release, cancellation, or satisfaction, such release, cancellation, or satisfaction, and the record thereof shall be cured of such defect, if such defect is due to any of the following:
(A) It purports to be signed by an agent or attorney of the mortgagee or a trustee, and no power of attorney or other evidence of authority so to release, cancel, or satisfy such mortgage is of record.
(B) It was signed by less than all of two or more executors, administrators, guardians, assignees in insolvency, or trustees.
(C) The record of such release, cancellation, or satisfaction is not attested by the recorder.
(D) The release, cancellation, or satisfaction by a corporation is executed by officers thereof without signing the name of the corporation thereto.
5301.291 Mortgage release, cancellation, or satisfaction not defective.
No real estate mortgage release, cancellation, or satisfaction of record in the office of the county recorder of the county within this state in which such real estate is situated shall be deemed defective because:
(A) The executor, administrator, guardian, assignee, or trustee signed it individually instead of in his representative or official capacity.
(B) The release, cancellation, or satisfaction is by separate instrument, and the certificate of acknowledgment is not on the same sheet of paper as the release, cancellation, or satisfaction.
(C) A satisfaction was not recorded within ninety days as required by division (B) of section 5301.36 of the Revised Code.
5301.31 Assignment or partial release in margin of original record.
Except in counties in which a separate instrument is required to assign or partially release a mortgage as described in section 5301.32 of the Revised Code, a mortgage may be assigned or partially released by the holder of the mortgage, by writing the assignment or partial release on the original mortgage or upon the margin of the record of the original mortgage and signing it. The assignment or partial release need not be acknowledged, but, if it is written upon the margin of the record of the original mortgage, the signing shall be attested by the county recorder. The assignment, whether it is upon the original mortgage, upon the margin of the record of the original mortgage, or by separate instrument, shall transfer not only the lien of the mortgage but also all interest in the land described in the mortgage. An assignment of a mortgage shall contain the then current mailing address of the assignee. The signature of a person on the assignment or partial release may be a facsimile of that person's signature. A facsimile of a signature on an assignment or partial release is equivalent to and constitutes the written signature of the person for all requirements regarding mortgage assignments or partial releases.
For entering an assignment or partial release of a mortgage upon the margin of the record of the original mortgage or for attesting it, the recorder shall be entitled to the fee provided by section 317.32 of the Revised Code for recording the assignment and satisfaction of mortgages.
5301.32 Assignment or partial release by separate instrument.
A mortgage may be assigned or partially released by a separate instrument of assignment or partial release, acknowledged as provided by section 5301.01 of the Revised Code. The separate instrument of assignment or partial release shall be recorded in the county recorder's official records. The county recorder shall be entitled to charge the fee for that recording as provided by section 317.32 of the Revised Code for recording deeds. The signature of a person on the assignment or partial release may be a facsimile of that person's signature. A facsimile of a signature on an assignment or partial release is equivalent to and constitutes the written signature of the person for all requirements regarding mortgage assignments or partial releases.
In a county in which the county recorder has determined to use the microfilm process as provided by section 9.01 of the Revised Code, the county recorder may require that all assignments and partial releases of mortgages be by separate instruments. The original instrument bearing the proper endorsement may be used as the separate instrument.
An assignment of a mortgage shall contain the then current mailing address of the assignee.
5301.34 Release of mortgage on certificate of mortgagee or assignee.
A mortgage shall be discharged upon the record of the mortgage by the county recorder when there is presented to the county recorder a certificate executed by the mortgagee or the mortgagee's assigns, acknowledged as provided in section 5301.01 of the Revised Code, or when there is presented to the recorder a deed of release executed by the governor as provided in section 5301.19 of the Revised Code, certifying that the mortgage has been fully paid and satisfied. In addition to the discharge on the records by the county recorder, such certificate shall be recorded in the official records kept by the county recorder. The county recorder is entitled to the fees for such recording as provided by section 317.32 of the Revised Code for recording deeds.
5301.36 Entry of satisfaction.
(A) Except in a county in which the county recorder has elected to require that all satisfactions of mortgages be recorded by separate instrument as allowed under section 5301.28 of the Revised Code, when recording a mortgage, county recorders shall leave space on the margin of the record for the entry of satisfaction, and record therein the satisfaction made on the mortgage, or permit the owner of the claim secured by the mortgage to enter such satisfaction. Such record shall have the same effect as the record of a release of the mortgage.
(B) Within ninety days from the date of the satisfaction of a mortgage, the mortgagee shall record a release of the mortgage evidencing the fact of its satisfaction in the appropriate county recorder's office and pay any fees required for the recording. The mortgagee may, by contract with the mortgagor, recover the cost of the fees required for the recording of the satisfaction by the county recorder.
(C) If the mortgagee fails to comply with division (B) of this section, the mortgagor of the unrecorded satisfaction and the current owner of the real property to which the mortgage pertains may recover, in a civil action, damages of two hundred fifty dollars. This division does not preclude or affect any other legal remedies or damages that may be available to the mortgagor.
(D)(1) If upon the expiration of the ninety-day period described in division (B) of this section, the satisfaction of mortgage remains unrecorded, the current owner of the real property shall provide the mortgagee written notice, in accordance with the Rules of Civil Procedure, of the failure to enter the release of the mortgage of record. The notice shall be in substantially the following form:
OHIO LAW REQUIRES A MORTGAGEE, WHETHER THE ORIGINAL MORTGAGEE OR ANY SUCCESSOR TO THE INTEREST OF THE ORIGINAL MORTGAGEE, TO RECORD A RELEASE OF A MORTGAGE EVIDENCING ITS SATISFACTION IN THE APPROPRIATE COUNTY RECORDER'S OFFICE AND TO PAY ANY FEES REQUIRED FOR THE RECORDING WITHIN A CERTAIN TIME PERIOD. (Name of mortgagor)'S MORTGAGE LOAN, (loan number or other loan identification), FOR PROPERTY LOCATED AT (property address), WAS SATISFIED ON (date of satisfaction). IT APPEARS YOU HAVE YET TO RECORD A RELEASE OF THIS MORTGAGE. FAILURE TO RECORD THE RELEASE WITHIN 15 DAYS OF RECEIVING THIS NOTICE MAY RESULT IN A CIVIL ACTION FILED AGAINST YOU TO RECOVER REASONABLE ATTORNEYS' FEES AND COSTS INCURRED IN SUCH AN ACTION OR OTHERWISE TO OBTAIN THE RECORDING, PLUS DAMAGES OF $100 FOR EACH DAY OF NONCOMPLIANCE NOT TO EXCEED $5,000 IN TOTAL DAMAGES.
(2) Within fifteen days after delivery of the notice described in division (D)(1) of this section, the mortgagee shall record a release of the mortgage evidencing the fact of its satisfaction in the appropriate county recorder's office and pay any fees required for the recording. The mortgagee may, by contract with the mortgagor or current owner of the real property, recover the cost of the fees required for the recording of the satisfaction by the county recorder.
(E) If the mortgagee fails to comply with division (D)(2) of this section after receiving the notice in accordance with division (D)(1) of this section, the current owner of the real property may recover, in a civil action, reasonable attorneys' fees and costs incurred in such an action or otherwise to obtain the recording of a satisfaction of mortgage plus damages of one hundred dollars for each day of noncompliance, not to exceed five thousand dollars in total damages.
This division does not preclude or affect any other legal remedies or damages that may be available to the current owner.
(F) A mortgagee that records a release of a mortgage evidencing the fact of its satisfaction within the time periods required by this section shall not be in violation of this section, or subject to damages or fees, due to the failure of a county recorder to timely process that release of mortgage.
(G) A current owner may combine the civil actions described in divisions (C) and (E) of this section by bringing one action to collect for both damages, or may bring separate actions.
(H) As used in this section :
(1) Mortgagee includes the original mortgagee or any successor to or assignee of the original mortgagee.
(2) Satisfaction means that the obligation secured by a mortgage has been paid in full and the underlying obligation terminated, with no opportunities for future advancements.
