Assignment of Mortgage by Individual Mortgage Holder
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.
Minnesota Law
Execution of Assignment or Satisfaction: Must
be signed by the Mortgagee.
Assignment: An assignment must be in writing
and recorded.
Demand to Satisfy: If mortgagor, by written
request, demands satisfaction in 10 days (60 days if mortgagee is not a
resident of Minnesota) pursuant to 507.41 (see below), mortgagor must pre-pay
the mortgagee's reasonable expenses for recording satisfaction. However,
if instead mortgagor, by written request, demands that a recordable certificate
of satisfaction be delivered to mortgagor within 45 days pursuant to 47.208
(below), then mortgagor is not required to pay mortgagee's expenses for
delivering same.
Recording Satisfaction: A mortgage may
be discharged by filing for record a certificate of its satisfaction executed
and acknowledged by the mortgagee.
Penalty: Mortgagee liable for all actual
damages for failure to record satisfaction under 507.41 or 47.208. In addition,
a $500 penalty applies when failing to meet the deadline of 47.208.
Acknowledgment: An assignment or satisfaction
must contain a proper Minnesota acknowledgment, or other acknowledgment
approved by Statute.
Minnesota Statutes
47.208 Delivery of satisfaction of mortgage.
Subdivision 1. Delivery required. Upon written
request, a good and valid satisfaction of mortgage in recordable form
shall be delivered to any party paying the full and final balance of a
mortgage indebtedness that is secured by Minnesota
real estate; such delivery shall be in hand or by certified mail
postmarked within 45 days of the receipt of the written request
to the holder of any interest of record in said mortgage and within 45
days of the payment of all sums due thereon.
Subd. 2. Penalty. If a lender fails to comply
with the requirements of subdivision 1, the lender may be held liable to
the party paying the balance of the mortgage debt, for a civil penalty
of up to $500, in addition to any actual damages
caused by the violation.
507.40 Mortgages, how discharged.
A mortgage may be discharged by filing for record a certificate
of its satisfaction executed and acknowledged by the mortgagee, the
mortgagee's personal representative, or assignee, as in the case of a conveyance.
The county recorder shall enter the number of such certificate and the
book and page of its record upon the record of the mortgage or on a microfilm
card whenever possible. If a mortgage be recorded in more than one
county and discharged of record in one of them, a certified copy of such
discharge may be recorded in another county with the same effect as the
original. If the discharge be by marginal entry, heretofore made,
such copy shall include the record of the mortgage. In all cases
the discharge shall be entered in the reception book and indexes as conveyances
are entered.
507.401 Title insurance company; mortgage release certificate.
Subdivision 1. Definitions.
(a) The definitions
in this subdivision apply to this section.
(b) "Assignment of rents and profits" means an assignment, whether
in a separate document or in a mortgage, of any of the benefits accruing
under a recorded or unrecorded lease or tenancy existing, or subsequently
created, on property encumbered by a mortgage, which is given as additional
security for the debt secured by the mortgage.(c) "Mortgage" means a mortgage
or mortgage lien, including any assignment of rents and profits given as
additional security for the debt secured by that lien, on an interest in
real property in this state given to secure a loan in the original principal
amount of $1,500,000 or less. (d) "Mortgagee" means:(1) the grantee of
a mortgage; or (2) if a mortgage has been assigned of record, the last
person to whom the mortgage has been assigned of record.(e) "Mortgage servicer"
means the last person to whom a mortgagor or the mortgagor's successor
in interest has been instructed by a mortgagee to send payments on a loan
secured by a mortgage. A person transmitting a payoff statement is
the mortgage servicer for the mortgage described in the payoff statement.
(f) "Mortgagor" means the grantor of a mortgage. (g) "Partial release"
means the release of specified parcels of land from a mortgage. (h) "Payoff
statement" means a statement of the amount of: (1) the unpaid balance of
a loan secured by a mortgage, including principal, interest, and any other
charges properly due under or secured by the mortgage, and interest on
a per day basis for the unpaid balance; or (2) the portion of the unpaid
balance of the loan secured by the mortgage required by the mortgagee or
mortgage servicer to be paid as a condition for the issuance of a partial
release. (i) "Record" means to record with the county recorder or file
with the registrar of titles. (j) "Title insurance company" means a corporation
or other business entity authorized and licensed to transact the business
of insuring titles to interests in real property in this state under chapter
68A.
Subd. 2. Certificate of release. An officer
or duly appointed agent of a title insurance company may, on behalf of
a mortgagor or a person who acquired from the mortgagor title to all or
a part of the property described in a mortgage, execute a certificate of
release that complies with the requirements of this section and record
the certificate of release in the real property records of each county
in which the mortgage is recorded if a satisfaction or release of the mortgage
has not been executed and recorded after the date payment in full of the
loan secured by the mortgage was sent in accordance with a payoff statement
furnished by the mortgagee or the mortgage servicer.
Subd. 3.
Contents. A certificate of release executed under this section must
contain substantially all of the following:(1) the name of the mortgagor,
the name of the original mortgagee, and, if applicable, the mortgage servicer,
the date of the mortgage, the date of recording, and volume and page or
document number in the real property records where the mortgage is recorded,
together with similar information for the last recorded assignment of the
mortgage;(2) if applicable, the date of any assignment of rents and profits,
the date of its recording, and its volume and page or document number in
the real property records where it has been recorded or filed, together
with similar information for the last recorded assignment thereof;(3) a
statement that the mortgage was in the original principal amount of $1,500,000
or less;(4) a statement that the person executing the certificate of release
is an officer or a duly appointed agent of a title insurance company authorized
and licensed to transact the business of insuring titles to interests in
real property in this state under chapter 68A;(5) a statement that the
certificate of release is made on behalf of the mortgagor or a person who
acquired title from the mortgagor to all or a part of the property described
in the mortgage; (6) a statement that the mortgagee or mortgage servicer
provided a payoff statement which was used to make full or partial payment
of the unpaid balance of the loan secured by the mortgage; (7) a statement
that full or partial payment of the unpaid balance of the loan secured
by the mortgage was made in accordance with the written or verbal payoff
statement; and (8) where the certificate of release affects only a portion
of the land encumbered by the mortgage, a legal description of the portion
being released.
Subd. 4. Execution.
(a) A certificate
of release authorized by subdivision 2 must be executed and acknowledged
as required by law in the case of a deed and may be executed by a duly
appointed agent of a title insurance company, but such delegation to an
agent by a title insurance company shall notrelieve the title insurance
company of any liability for damages caused by its agent for the wrongful
or erroneous execution of a certificate of release.
(b) The appointment of agent must be executed and acknowledged as
required by law in the case of a deed and must state: (1) the title insurance
company as the grantor; (2) the identity of the person, partnership, or
corporation authorized to act as agent to execute and record certificates
of release provided for in this section on behalf of the title insurance
company; (3) that the agent has the full authority to execute and record
certificates of release provided for in this section on behalf of the title
insurance company; (4) the term of appointment of the agent; and (5) that
the agent has consented to and accepts the terms of the appointment.
(c) A single appointment of agent may be recorded in each county
in each recording or filing office. A separate appointment of agent
shall not be necessary for each certificate of release. For registered
land the appointment of agent shall be shown as a memorial on each certificate
of title on which a mortgage to be released by a certificate of release
under this section is a memorial. The appointment of agent may be
rerecorded where necessary to establish authority of the agent, but such
authority shall continue until a revocation of appointment is recorded
in the office of the county recorder, or registrar of titles, where the
appointment of agent was recorded. Subd. 5. Effect.
For purposes of releasing the mortgage, a certificate of release containing
the information and statements provided for in subdivision 3 and executed
as provided in this section is prima facie evidence of the facts contained
in it, is entitled to be recorded with the county recorder or registrar
of titles, and operates as a release of the mortgage described in
the certificate of release. The county recorder and the registrar
of titles shall rely upon it to release the mortgage. Recording of
a wrongful or erroneous certificate of release by a title insurance company
or its agent shall not relieve the mortgagor, or the mortgagor's successors
or assigns, from any personal liability on the loan or other obligations
secured by the mortgage. In addition to any other remedy provided
by law, a title insurance company wrongfully or erroneously recording a
certificate of release under this section shall be liable to the mortgagee
for actual damage sustained due to the recordings of the certificate
of release.
Subd. 6. Recording. If a mortgage is
recorded in more than one county and a certificate of release is recorded
in one of them, a certified copy of the certificate of release may be recorded
in another county with the same effect as the original. In all cases,
the certificate of release shall be entered and indexed as satisfactions
of mortgage and releases of assignments of rents and profits are entered
and indexed.
Subd. 7. Application. This section
applies only to a mortgage in the original principal amount of $1,500,000
or less.
507.41 Penalty for failure to discharge.
When any mortgagee, mortgagee's personal representative or assignee,
upon full performance of the conditions of the mortgage, shall fail
to discharge the same within ten days after being thereto requested and
after tender of the mortgagee's reasonable charges therefor, that mortgagee
shall be liable to the mortgagor, the mortgagor's heirs or assigns, for
all actual damages thereby occasioned; and a claim for such damages may
be asserted in an action for discharge of the mortgage. If the
defendant be not a resident of the state, such action may be maintained
upon the expiration of 60 days after the conditions of the mortgage have
been performed, without such previous request or tender.
507.411 Corporate change noted in assignment, satisfaction,
or release.
When a change in the name or identity of a corporate mortgagee or
assignee of the mortgagee is caused by or results from a merger, consolidation,
amendment to charter or articles of incorporation, or conversion of articles
of incorporation or charter from federal to state, from state to federal,
or from one form of entity to another, a mortgage assignment, satisfaction,
or release that is otherwise recordable and that specifies in the body
of the instrument the merger, consolidation, amendment, or conversion event
causing the change in name or identity is in recordable form. The
assignment, satisfaction, or release is entitled to be recorded in the
office of the county recorder or filed with the registrar of titles,
without further evidence of corporate merger, consolidation, amendment,
or conversion. For purposes of assigning, satisfying, or releasing
the mortgage, the assignment, satisfaction, or release is prima facie evidence
of the facts stated in it with respect to the corporate merger, consolidation,
amendment, or conversion, and the county recorder and the registrar of
titles shall rely upon it to assign, satisfy, or release the mortgage.
