Deed of Release and Full Reconveyance - Individual Lender or 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.
New Mexico Law
Assignment: If an assignment of mortgage
appears upon the proper record of such county clerk, then payment may be
made to the last assignee whose assignment is so recorded, and such [full]
payment shall be effectual to extinguish all claims against such mortgagor.
Demand to Satisfy: None required.
Recording Satisfaction: It is the duty
of the mortgagee, trustee or the assignee of the debt or evidence
of debt, as the case may be, to cause the full satisfaction of it
to be entered of record in the office of the county clerk of the county
where the mortgage or deed of trust is recorded.
Penalty: Failure to satisfy of record results
in a fine of between $10 and $25, and liability for other recoverable costs.
Acknowledgment: An assignment or satisfaction
must contain a proper New Mexico acknowledgment, or other acknowledgment
approved by statute.
New Mexico Statutes
48-7-2. [Assignments of mortgages; recording; person entitled
to payment; effect of failure to record; assignee's action against assignor.]
In cases where assignments of real estate mortgages are made subsequent
to the date this act takes effect, and such assignments are not recorded
in the office of the county clerk of the proper county, the mortgagor,
his heirs, personal representatives or assigns may pay the principal debt
secured by such mortgage or accrued interest thereon, prior to the recording
of such assignment, to the mortgagee; but if an assignment of such mortgage
appears upon the proper record of such county clerk, then such payment
may be made to the last assignee whose assignment is so recorded, and such
payment shall be effectual to extinguish all claims against such mortgagor,
his heirs, personal representatives or assigns, for or on account of such
interest or such principal indebtedness. No transfer of any note, bond
or other evidence of indebtedness, by endorsement or otherwise, where such
indebtedness is secured by mortgage on real estate within this state, shall prevent or operate
to defeat the defense of payment of such interest or principal by the mortgagor,
his heirs, personal representatives or assigns, where such payment has
been made to the mortgagee whose mortgage is duly recorded or to the assignee
whose assignment appears last of record in accordance with the provisions
of this act [48-7-2, 48-7-3 NMSA 1978]; provided, however, that the assignee
who may hold an unrecorded assignment of a real estate mortgage which is
immediately subsequent to such recorded mortgage or to the last recorded
assignment shall have a right of action against his assignor to recover
the amount of any such payment of interest or principal made to such assignor,
as upon an account for money had and received for the use of such assignee.
48-7-4. Release on record upon satisfaction of mortgage.
A. When any debt or evidence of debt secured by a mortgage
or deed of trust upon any real estate in the state has been fully satisfied,
it
is the duty of the mortgagee, trustee or the assignee of the debt
or evidence of debt, as the case may be, to cause the full satisfaction
of it to be entered of record in the office of the county clerk of the
county where the mortgage or deed of trust is recorded.
B. The debt or evidence of debt secured by a mortgage or deed
of trust shall not have been fully satisfied for purposes of Subsection
A of this section, even if all sums due thereunder have been paid in full,
if the written agreement between the mortgagor or trustor and the mortgagee
or beneficiary provides for the securing of a series of loans or a line
of credit by a mortgage or deed of trust and the notation "Line of credit
mortgage" is prominently placed on the mortgage or deed of trust that is
filed with the county clerk in the county or counties in which the property
is located.
C. If, at any time the obligation secured by the mortgage
or deed of trust described in Subsection B of this section is fulfilled,
and the balance is zero, the mortgagee or beneficiary shall cause
the mortgage or deed of trust to be released of record upon written demand
of the mortgagor, trustor or the successor or assignee thereof.
In the event of the death or incompetence of the mortgagor or trustor,
the heirs, personal representative, conservator or guardian of the mortgagor
or trustor as appropriate may make the demand for release described in
this subsection.
48-7-5. [Failure to release; penalty; civil liability.]
Any person who shall be guilty of violating the preceding section
[48-7-4 NMSA 1978], upon conviction before any justice of the peace [magistrate]
or district court having jurisdiction of the same shall be punished by
a fine of not less than ten [($10.00)] nor more than twenty-five dollars
[($25.00)], and shall be liable in a civil action to the owner of such
real estate for all costs of clearing the title to said property including
a reasonable attorney's fee.
