Assignment of Mortgage by Corporate Mortgage Holder
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 rule is that the assignment must be in proper written format and recorded to
provide notice of the assignment.
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.
South Dakota Law
An assignment must be in writing and recorded.
Demand to Satisfy:
Following full payoff, the mortgagor may demand in writing that mortgagee satisfy the mortgage of
record, whereupon mortgagee has 10 days to do so or suffer penalty and
potential liability (see below).
Instruments entitled to be recorded must be recorded by the register of deeds of the county
in which the real property affected thereby is situated.
If, following full repayment, mortgagee does not satisfy mortgage of record within 10 days of written
request of mortgagor, mortgagee becomes liable for all damages mortgagor
may have sustained thereby, including his attorney's fees and an additional
penalty in the sum of one hundred dollars.
An assignment or satisfaction must contain a proper South Dakota acknowledgment, or other acknowledgment
approved by Statute.
South Dakota Statutes
43-28-1. Recording of instruments affecting real
estate with register of deeds.
Any instrument affecting the title to or possession of real property
may be recorded as by law provided. Instruments entitled to be recorded
must be recorded by the register of deeds of the county in which the real
property affected thereby is situated.
44-3-8. Satisfaction of lien -- Execution of discharge
or release by holder -- Damages for failure to execute and deliver satisfaction
-- Attorney fees -- Additional penalty.
Whenever any mortgage, pledge, or other lien of any kind has been
satisfied either by payment, foreclosure, or other legal means, the holder
of such lien must within ten days after written demand is made by the
owner of the property execute and deliver to such owner a sufficient satisfaction,
discharge, or release to cancel the same or any record thereof. Failure
to execute and deliver such satisfaction, discharge, or release shall entitle
the owner of the property to recover from the person who should have executed
the same all damages he may have sustained thereby, including his attorney's
fees and an additional penalty in the sum of one hundred dollars.