Satisfaction of Mortgage Forms
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What to Know About Satisfaction of Mortgage
Satisfaction of mortgage is an important goal for property owners, and needs to be handled properly to make sure your ownership interests are protected. Be sure you understand how the procedures work. We'll examine the important facts you need to know about a mortgage loan below.
What is a Mortgage?
Let's start by defining important terminology related to mortgages.
Mortgage - A mortgage is a type of loan used to obtain financing related to real property. Technically, it really involves two separate documents, the loan note which creates the debt, and the mortgage which creates a security interest in property that can be used to pay off the loan if the debtor defaults in payment.
Collateral - The property that is used as security for the loan is called collateral. Home mortgages typically use the property the loan is used to acquire or improve as the collateral securing the mortgage.
County Recorder - By filing the mortgage at the county recorder office, the mortgage company creates a lien on the property that must be released before the property can be sold or transferred with a clear title. The county recorder is sometimes called the registrar of deeds, land registry, or other office title, depending on local area.
Therefore, how to mortgage property involves making a loan agreement and creating a mortgage to give the lender a security interest in the property named as collateral. The collateral can be sold by the lender if the debtor fails to make timely payments by foreclosing on the lien created by filing the mortgage document.
A mortgage refinance is a new loan, sometimes created as an additional loan, or it may convert the old loan to different payment and interest terms. However, refinancing basically works the same way to create a lien on the property through filing the new mortgage document.
Paying off the Mortgage
When the glorious day of paying off the debt arrives, you need to get the lien on the property used as collateral released by the mortgage bank or lender. This is done by filing the document called a satisfaction of mortgage with the county recorder. Most states have a time frame, which varies by state, in which the lender is required to file this, or else face a penalty and/or fine.
In some cases, the lender will file a deed of reconveyance. The deed of reconveyance is used to transfer the deed back to the property owner if the deed was transferred to a lender's trustee as part of the loan agreement. Both a satisfaction of mortgage and deed of conveyance are similarly used to release the lender's lien on the property by recording it in the land records. Without properly recording one of these documents, the lien will remain on the property, even if the loan is fully paid.
US Legal Forms has professionally drafted satisfaction of mortgage documents and deeds for all your needs. We also offer a state-specific cancellation, release and satisfaction of mortgage package the contains all the forms you need at a discounted price.
Mortgage Satisfaction FAQs
Who is a mortgagor?
A mortgagor is a person who borrows money from a lender in order to purchase a property. A mortgagor gives the mortgagee a security interest in the property to back the loan. A mortgagor can be an individual or an entity.
Who is a mortgagee?
A mortgagee is a person who lends money to a borrower, and the mortgagee holds a lien on the borrower's property through a mortgage document. A mortgagee can be an individual or an entity like a bank.
What is mortgage satisfaction?
Mortgage satisfaction is the process of acknowledging that a mortgage has been paid off in full. It gives a borrower a release from mortgage. A mortgage satisfaction document is a legal document that evidences mortgage release. It is also called a deed of reconveyance, satisfaction, cancellation or discharge of mortgage, or release of mortgage.
What happens when a deed of trust is paid in full?
After borrowers pay off a deed of trust, the mortgage holder must record a cancellation of deed of trust. This will indicate that the trustee's deed does not have a lien over the mortgaged property.
What if I don't have enough funds to pay the mortgage in full? Will I derive any benefit by making a partial payment?
If you can't pay a mortgage or a deed of trust fully, you may get a partial release. By making a partial payment, you may obtain partial release from mortgage when multiple property units are covered.
Where should a satisfaction of mortgage be filed?
A satisfaction of mortgage should be filed with a county recorder. Depending on your state, the office of the county recorder may be known either as County Recorder's Office, Register of Deeds, or Land Registry Office. The satisfaction of mortgage should be filed in the office where all documents relating to real property are filed.
Will my deed be valid if it is notarized in a state where the property is not situated?
This will depend on which state you are from. Some states do recognize deeds that are notarized by other state officials. Therefore, it's recommended to consult with the county clerk's office in the state where the land is located to ensure that the deed will be recognized.
What is the consequence of not recording a mortgage satisfaction?
If a purchaser pays off the debt, but does not record a mortgage satisfaction, then the lender will continue to have a lien over the mortgaged property. If a mortgage satisfaction is not recorded, mortgage discharge cannot be proved. In certain states, the lender can be fined if satisfaction is not filed within reasonable time of paying the debt in full. Even if the time limit for filing a satisfaction has passed, you should prepare a mortgage satisfaction document and get it recorded.
As a borrower/lender, how can I protect myself from future claims on the mortgage relating to interest rate, etc?
Having an estoppel certificate will prevent future claims from arising. An estoppel certificate will have the terms of a mortgage and will be signed by both the parties. Once you have an estoppel certificate, the terms of mortgage cannot be disputed.