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.
Michigan Law
Execution of Assignment or Satisfaction: Must
be signed by mortgagee.
Assignment: An assignment must be in writing
and recorded.
Demand to Satisfy: Upon full payoff, mortgagee
has 90 days to record satisfaction. However, if, following full payoff,
mortgagor requests that mortgagee record satisfaction, then mortgagee must
do so within 7 days, or suffer liability.
Recording Satisfaction: Any mortgage shall
also be discharged upon the record thereof by the register of deeds, in
whose custody it shall be, whenever there shall be presented to him a certificate
executed by the mortgagee, acknowledged, approved and certified as in this
chapter provided, specifying that such mortgage has been paid, or otherwise
satisfied or discharged.
Penalty: If mortgagee fails (within 7 days
following request) to discharge the mortgage of record after full payoff,
he is liable for a penalty of $100 plus actual damages.
Acknowledgment: An assignment or satisfaction
must contain a proper Michigan acknowledgment, or other acknowledgment
approved by Statute.
Michigan Statutes
CHAPTER 65 - CHAPTER 65. OF ALIENATION BY DEED, AND THE PROOF AND
RECORDING OF CONVEYANCES, AND THE CANCELING OF MORTGAGES. (EXCERPT) 565.41
Discharge of mortgage; payment of filing fee by
mortgagee. [M.S.A. 26.558(1)]
Sec. 41. A mortgagee or his personal representative, successor or
assign, within 90 days after a mortgage has been paid or otherwise
satisfied and discharged, shall prepare and file a discharge thereof with
the register of deeds for the county where the mortgaged property is located
and pay the fee for recording the discharge.
CHAPTER 65 - CHAPTER 65. OF ALIENATION BY DEED, AND THE PROOF AND
RECORDING OF CONVEYANCES, AND THE CANCELING OF MORTGAGES. (EXCERPT) 565.42
Discharge of mortgage; certificate of mortgagee; circuit court, or register
in chancery. [M.S.A. 26.559]
Sec. 42. Any mortgage shall also be discharged upon the record
thereof by the register of deeds, in whose custody it shall be, whenever
there shall be presented to him a certificate executed by the mortgagee,
his personal representative or assigns, acknowledged, approved and certified
as in this chapter provided, to entitle conveyances or instruments in writing
in any wise affecting the title to lands to be recorded, specifying that
such mortgage has been paid, or otherwise satisfied or discharged;
or upon the presentation to such register of deeds of the certificate of
the circuit court, signed by the judge of said court, and under the seal
thereof, certifying that it has been made to appear to said court that
said mortgage has been duly paid, or upon the presentation to such register
of deeds of a certificate of the register in chancery of the county and
under the seal thereof certifying that a decree of foreclosure of any such
mortgage has been duly entered in his office, and that the records in his
office shows that such decree has been fully paid and satisfied.
CHAPTER 65 - CHAPTER 65. OF ALIENATION BY DEED, AND THE PROOF AND
RECORDING OF CONVEYANCES, AND THE CANCELING OF MORTGAGES. (EXCERPT) 565.43
Discharge of mortgage; recording of certificate; reproduced documents;
reference to book and page containing certificate. [M.S.A. 26.560]
Sec. 43. Every certificate described in section 42, and the proof
or acknowledgment of the certificate, shall be recorded at full length,
and a reference shall be made to the book and page containing the certificate,
in the minute of the discharge of the mortgage made by the register upon
the mortgage. If the register of deeds is authorized by the board of commissioners
to reproduce deeds, mortgages, maps, instruments, or writings, as provided
in section 2 of Act No. 105 of the Public Acts of 1964, being section 691.1102
of the Michigan Compiled Laws, and the mortgage does not exist in a hard
copy medium, it is not necessary for him or her to make reference to the
book and page containing the certificate on the book or page containing
the mortgage. Instead, reference to the book and page containing the certificate
shall be made in the index to the entry book of mortgages.
CHAPTER 65 - CHAPTER 65. OF ALIENATION BY DEED, AND THE PROOF AND
RECORDING OF CONVEYANCES, AND THE CANCELING OF MORTGAGES. (EXCERPT) 565.44
Discharge of mortgage; refusal; civil liability, penalty. [M.S.A. 26.561
]
Sec. 44. If any mortgagee, or his personal representative or assignee,
as the case may be, after full performance of the condition of the mortgage,
whether before or after a breach thereof, or if the same be entirely due
and payable, after a tender of the whole amount so due and payable thereon,
shall, for the space of 7 days after being thereto requested, and after
tender of his reasonable charges, refuse or neglect to discharge the
same as provided in this chapter, or to execute and acknowledge a certificate
of discharge or release thereof, he shall be liable to the mortgagor,
his heirs or assigns, in the sum of 100 dollars damages, and also for all
actual damages, occasioned by such neglect or refusal, to the person
who shall perform the condition of such mortgage, or make such tender to
the mortgagee, his heirs or assigns, or to any one who may have an interest
in the mortgaged premises, to be recovered in an action on the case, or
be awarded by a court of equity upon a bill filed to procure a discharge,
or a release of such mortgage, with double costs, in the discretion
of the court.
