Assignment of Deed of Trust 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 rule
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.
Tennessee Law
Assignment:
It is recommended that an assignment be in writing and recorded.
Demand to Satisfy:
By written request.
Recording Satisfaction:
The Mortgagee or the legal holder of the debt secured by deed of trust or lien, who has
received payment or satisfaction of the debt, must satisfy the record by
a formal deed of release.
Marginal Satisfaction:
Only in counties having specific population sizes. See statutes, below.
Penalty:
If holder of debt fails to enter release of record within 45 days after receipt of request, penalty is $100,
and Mortgagor must request again by writing. If holder then fails to enter
release of record within 30 days from receipt of 2nd request, penalty is
$1000.
Acknowledgment:
An assignment or satisfaction must contain a proper Tennessee acknowledgment, or other acknowledgment
approved by Statute.
Tennessee Statutes
66-25-101. Requirements for record of release.
(a) When a debt secured by a mortgage, deed of trust,
or by lien retained in a deed of conveyance of land or bill of sale, or
other instrument, has been fully paid or satisfied, the mortgagee,
transferee, or assignee of the mortgagee or the legal holder of the debt
secured by deed of trust or lien, who has received payment or satisfaction
of the debt, must satisfy the record by a formal deed of release.
(b) In any county having a population of not
less than thirty-two thousand six hundred (32,600) nor more than thirty-two
thousand seven hundred (32,700) according to the 1980 federal census or
any subsequent federal census the record may be satisfied by entry on
the margin of the record of the mortgage, deed of trust, deed or other
instrument.
66-25-102. Penalty for failure to release.
(a) If the holder of any debt secured by real property
situated in this state fails to enter a proper release of record after
having been fully paid or satisfied within forty-five (45) days
from the receipt of a written request from the party making such
payment, including, but not limited to, the maker, the mortgagor, the purchaser
of the property covered by such instrument or any closing agent or attorney
who has collected and transmitted funds for such payment, the holder of
the debt shall forfeit to the party making such request the sum of one
hundred dollars ($100).
(b) If the indebtedness is not released within the aforestated
forty-five-day period, the party having requested the release shall again
request the release, and, if after thirty (30) days from the second
request, the indebtedness has not been released, the holder shall forfeit
to the party making the request a sum not to exceed one thousand dollars
($1,000).
(c) In the event suit is instituted to collect either
or both of the forfeitures, the holder shall also be liable to the party
instituting suit for all reasonable expenses, attorney fees, and the
court costs incurred in the action.