Until a borrower pays off the amount specified in the mortgage agreement and related costs, the lender has an ownership interest on the property. However, when the debt is paid off, the lender is obligated to prepare, sign, and file a Satisfaction of Mortgage.
That is not to say all lenders will do this all the time. Some may fail to issue a Satisfaction of Mortgage and formally release the lien. In this case, the borrower should contact them to acquire the document. This can be done over the phone or more officially, with a written Demand for Satisfaction of Mortgage.
A Demand for Satisfaction of Mortgage is a formal letter from a mortgagor to a mortgagee after having fulfilled the mortgage loan entirely. The letter serves as a reminder for the mortgagee to file the relevant Satisfaction of Mortgage.
The Satisfaction of Mortgage must be registered at the County Recorder's Office to formally clear the title and confer on the borrower full ownership of the property.
Most states require the sender to issue a Satisfaction of Mortgage within 30-90 days of the last payment. A failure to do so may incur damages and penalties.
There are not any other widely recognized names for the Demand for Satisfaction of Mortgage. It's a standard form that they can use to claim their right to a Satisfaction of Mortgage legally.
A Demand for Satisfaction of Mortgage is necessary only if a Satisfaction of Mortgage is not received for any reason, assuming the debt has been paid off. If you have repaid your mortgage in full but have yet to receive this document, you can use a Demand for Satisfaction of Mortgage to formally inform the lender they must release the property's lien.
Alternatively, you can contact the lender through the regular channel, such as the toll-free number, or work with a release tracking agency. This is especially useful if the lender still has not issued the requested Satisfaction of Mortgage after in receipt of the Demand.
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A Demand for Satisfaction of Mortgage should ideally follow a particular structure to prompt a lender to act. Anyone can type up such a letter, but it is best to use a professional template containing all the necessary details.
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To Create a Demand for Satisfaction, you must provide:
Mortgagor and Mortgagee: Identities of the two parties involved in the mortgage
Personal information: The identity of the person signing and sending the demand
Property location: The physical address of the property in question
Mortgage details: The principal amount specified in the mortgage agreement, the mortgage execution date, and the date of the final payment
Date sent: The date when you will sign and send the Demand
Mortgagor: An entity or individual that borrows funds to buy real estate
Mortgagee: A financial institution or individual that lends to a mortgagor
Lien: A lender's interest in a property surrendered only if the borrower pays off the mortgage in full
Date of mortgage execution: The date on which the mortgagor and mortgagee signed the original mortgage agreement
Title: A bundle of rights pertaining to property ownership
Principal amount: The initial size of the loan
Only the sender of a Demand for Satisfaction of Mortgage must sign it. The document doesn't have to be notarized. However, the use of a notary public may enhance your document's reliability and prevent other parties from challenging the signature in the future.
If the lender doesn't release the lien on your property within a reasonable timeframe, you can issue a Demand for Satisfaction of Mortgage to formally request it from the lender. If the lender is to ignore the letter or otherwise fails to give the Satisfaction of Mortgage requested, they can be subject to damages and penalties under the law.
If your lien is not officially released after having satisfied your mortgage, the lender technically still has a hold on your property. This means that you can’t sell or use it as collateral without conditions as the title has yet to be cleared. In this situation, you would send a Demand to the lender for the appropriate Satisfaction of Mortgage entitled to you.
A Satisfaction of Mortgage is only applicable if you had signed a mortgage agreement with the lender. If you used a deed of trust, the lien is released through a deed of reconveyance. The title of the property will be transferred to you the same fashion as with a Satisfaction of Mortgage.
No. Only the lender and its legal counsel can file a Satisfaction of Mortgage. If they are not to do so, you can pursue this matter legally and claim commensurate damages.
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