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 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.
District of Columbia Law
Assignment: An assignment must be in writing
and recorded.
Demand to Satisfy: Following full payoff,
the borrower may demand satisfaction by written request to the lender,
who then has 30 days to record satisfaction of the deed of trust.
Recording Satisfaction: A deed of trust
may be released as a lien on the real property described therein by recording
a certificate of satisfaction executed by the beneficiary- mortgagee, or
by satisfaction on the face of the mortgage document combined with an affidavit.
Marginal Satisfaction: Allowed as means
of satisfaction, provided that an affidavit is included therewith.
Penalty: If holder's failure to record
satisfaction continues for more than 30 days after the holder receives
a written request from the person entitled to the release, then holder
shall pay to the person a penalty in the amount of $50 per day, shall be
liable to such person for all actual and consequential damages, and shall
pay all costs and expenses, including reasonable attorneys fees and disbursements,
relating to or arising out of the enforcement of such person's rights.
Acknowledgment: An assignment or satisfaction
must contain a proper District of Columbia acknowledgment, or other acknowledgment
approved by Statute.
District of Columbia Statutes
District of Columbia Code § 45-718.2. Procedures for release
of deed of trust.
(a)For purposes of this section, the term
(b)(1) "Ancillary security instrument" means an assignment of leases
with respect to the real property described in a deed of trust, an assignment
of rents from or arising out of the real property described in a deed of
trust, a financing statement filed in the financing statement records in
the Office of the Recorder of Deeds of the District of Columbia with respect
to fixtures on real property described in a deed of trust, and any other
document or instrument that assigns, or creates a lien on, an interest
in the real property described in a deed of trust as security for a promissory
note. (2) "Deed of trust" means a mortgage or a deed of trust encumbering
real property located in the District of Columbia as the same may be modified,
amended, supplemented, or restated. (3) "Land records" means the land records
in the Office of the Recorder of Deeds of the District of Columbia. (4)
"Promissory note" means a promissory note or other written evidence of
indebtedness or obligation secured by a deed of trust.
(b)(1) Except as otherwise provided in paragraph (2) of this subsection,
if (i) a deed of trust is not released as a lien on the real property described
therein within a period of 12 years after the maturity date of the obligation
secured by the deed of trust, or (ii) no determinable maturity date is
recited in the deed of trust and 35 years have elapsed since the date of
recordation of the deed of trust among the land records (or, if the deed
of trust has been modified or extended, the last recorded modification
or extension), then the promissory note secured by the deed of trust shall
be deemed conclusively to have been paid and satisfied. The deed of trust
shall, without any action on the part of the owner or other person having
an interest in the real property described in the deed of trust, be deemed
to have been automatically released as of the last day of the period
referred to in clause (i) or (ii) of this paragraph, as the case may be,
and the deed of trust shall no longer constitute a lien on, or be enforceable
against, the real property described therein. (2) Paragraph (1) of this
subsection shall not apply if: (A) A Notice of Foreclosure with respect
to a deed of trust has been recorded among the land records within 60 days
before the expiration of the applicable time period referred to in (i)
or (ii) of paragraph (1) of this subsection, or (ii) as of the last day
of the applicable time period referred to in clause (i) or (ii) of paragraph
(1) of this subsection, a proceeding to enforce the lien of a deed of trust
is pending in a court of competent jurisdiction.
(c) A deed of trust may be validly released as a lien on real property
in the District of Columbia by any one of the following means: (1)(A) A
deed of trust securing a lost, misplaced or destroyed promissory note which
has been fully paid and satisfied may be released as a lien on the real
property described therein by recording an affidavit among the Land Records.
The affidavit, which shall be executed by the holder of the lost, misplaced
or destroyed promissory note, or by the trustee or trustees named in the
original deed of trust or subsequently appointed by a recorded instrument
of substitution, shall state that (i) the promissory note has been fully
paid and satisfied, (ii) he original promissory note has been lost, misplaced,
or destroyed and, if the affiant is the holder of the promissory note,
neither the promissory note nor any interest therein has been transferred,
assigned, or negotiated to any other person, (iii) the affiant has been
unable to locate the promissory note despite a diligent search, and (iv)
the affiant release the deed of trust identifiedby recording reference,
as a lien on the real property described in the deed of trust. (B) The
affidavit shall fully identify the real property encumbered by, the parties
to, the date of, and the recording reference for, the deed of trust being
released. The recordation of the affidavit shall be effective to release
the deed of trust as a lien on the real property described therein with
the same effect as a release recorded pursuant to paragraph (3) of this
subsection. (2)(A) A deed of trust may be released as a lien on the
real property described therein by recording the original promissory note,
marked "paid" or "canceled" on its face by the holder, among the land records
with an attached affidavit executed by the holder, or by an officer of
the title insurance company or validly licensed title insurance agent which
disbursed funds in payment of the promissory note, stating that the promissory
note has been fully paid or satisfied and releasing the deed of trust as
a lien on the real property described in the deed of trust. (B) The affidavit
shall fully identify the real property encumbered by, the parties to, the
date of, and the recording reference for, the deed of trust being released.
The recordation of the original promissory note with the required affidavit
attached shall be effective to release the deed of trust as a lien on the
real property with the same effect as a release recorded pursuant to paragraph
(3) of this subsection. (3) A deed of trust may be released as a lien on
the real property described therein by according a certificate of satisfaction
executed by the beneficiary, mortgagee, assignee, or trustee fully identifying
the real property encumbered by, the parties to, the date of, and the recording
reference for, the deed of trust being released, and stating that the deed
of trust is released as a lien on the real property described therein,
or, if the deed of trust is being released as a lien on less than all of
the real property described therein, describing the part of the real property
then being released.
(d) A certificate of satisfaction shall comply with the requirements
of subsection (c)(3) of this section, [and] shall be acknowledged in the
manner required for the acknowledgement of a deed.
...
(e)(1) If a promissory note is paid or satisfied in full, the
holder shall, within 30 days after receipt of such payment or within 30
days after such satisfaction, execute, acknowledge, and deliver, or cause
to be executed, acknowledged and delivered, to the person making such payment
or causing such promissory note to be satisfied, one or more of the documents,
instruments and affidavits, in one of the forms permitted by subsection
(c) of this section, sufficient to release the deed of trust securing such
promissory note as a lien against the real property described in the deed
of trust. (2) If a promissory note is paid or satisfied in part, and
if by the terms of the promissory note, the deed of trust securing the
promissory note or a separate agreement between the parties, the person
making such partial payment or causing such partial satisfaction to be
made is entitled to a release of a part of the real property encumbered
by the lien of the deed of trust, the holder of the promissory note shall
comply with the provisions of subsection (c)(3) of this section in the
same manner as if the promissory note were paid or satisfied in full, except
that the release shall apply only to the part of the real property encumbered
by the lien of the deed of trust which the holder is obligated, by the
terms of the promissory note, the deed of trust or the separate agreement,
to release on account of such partial payment or satisfaction. (3) If
a holder of a promissory note secured by a deed of trust fails to execute,
acknowledge, and deliver, or cause to be executed, acknowledged, and delivered,
the documents, instruments, or affidavits required to release the deed
of trust, in whole or in part, within the time, and in the manner, required
by paragraph (1) or (2) of this subsection, and if the holder's failure
continues for more than 30 days after the holder receives a ritten request
therefor from the person entitled to the release or such person's agent,
then holder shall pay to the person entitled to the release a penalty in
the amount of $50 per day, shall be liable to such person for all actual
and consequential damages caused by the holder's failure timely to deliver
or record the full or partial release, and shall pay or reimburse such
person for all costs and expenses, including reasonable attorneys fees
and disbursements, relating to or arising out of the enforcement of such
person's rights under this section. The penalty of $50 per day shall be
payable for the period beginning on and including the 31st day after the
holder receives a written request for the release to, but not including,
the day on which the holder delivers the executed and acknowledged documents,
instruments or affidavits required to release the deed of trust. (4)
For purposes of this subsection, (i) a payment in the form of an electronic
transfer of immediately available funds to an account in a commercial bank,
a savings bank, a savings and loan association, a credit union or a similar
financial institution shall be deemed to be made when the financial institution
confirms receipt of the funds to the owners of the account, (ii) a payment
in the form of a check issued or certified by a national or state bank
shall be deemed to be made upon receipt of the check, and (iii) payment
in the form of a check that is not issued or certified by a national or
state bank shall be deemed to be made on the first day on which the holder
receives the proceeds of collection of such check in immediately available
funds.(f) If a deed of trust is released, or deemed released, as a lien
on all of the real property described therein, the release of the deed
of trust shall be deemed automatically to release any ancillary security
instrument that secures the same promissory note secured by the deed of
trust. This provision shall not apply if the document recorded among the
land records expressly states that the release of the deed of trust shall
not release the ancillary security instrument.
