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.
Iowa Law
Assignment: It is recommended that an assignment
be in writing and recorded immediately.
Demand to Satisfy: Upon full payoff, mortgagor
may request recordation of satisfaction by mortgagee, who must comply within
30 days or face liablity.
Recording Satisfaction: When the amount
due on a mortgage is paid off, the mortgagee must acknowledge satisfaction
thereof by execution of an instrument in writing, referring to the mortgage,
and duly acknowledged and recorded.
Marginal Satisfaction: Not allowed. Separate
instrument required.
Penalty: If mortgagee fails to discharge
a satisfied mortgage within thirty days after a request for discharge,
the mortgagee is liable to the mortgagor and the mortgagor's heirs or assigns,
for all actual damages caused by such failure, including reasonable attorney
fees.
Acknowledgment: An assignment or satisfaction
must contain a proper Iowa acknowledgment, or other acknowledgment approved
by Statute.
Iowa Statutes
655.1 Written instrument acknowledging satisfaction.
When the amount due on a mortgage is paid off, the mortgagee, the
mortgagee's personal representative or assignee, or those legally acting
for the mortgagee, and in case of payment of a school fund mortgage the
county auditor, must acknowledge satisfaction thereof by execution of
an instrument in writing, referring to the mortgage, and duly acknowledged
and recorded.
655.3 Penalty for failure to discharge.
If a mortgagee, or a mortgagee's personal representative or assignee,
upon full performance of the conditions of the mortgage, fails to discharge
such mortgage within thirty days after a request for discharge, the
mortgagee is liable to the mortgagor and the mortgagor's heirs or assigns,
for all actual damages caused by such failure, including reasonable attorney
fees. A claim for such damages may be asserted in an action for discharge
of the mortgage. If the defendant is not a resident of this state, such
action may be maintained upon the expiration of thirty days after the conditions
of the mortgage have been performed, without such previous request or tender.
655.4 Entry of foreclosure.
When a judgment of foreclosure is entered in any court, the clerk
shall record with the recorder an instrument in writing referring to the
mortgage and duly acknowledging that the mortgage was foreclosed and giving
the date of the decree. The fee for recording and indexing an instrument
shall be as provided in section 331.604.
655.5 Instrument of satisfaction.
When the judgment is fully paid and satisfied upon the judgment
docket of the court, the clerk shall record with the recorder an instrument
in writing, referring to the mortgage and duly acknowledging a satisfaction
of the mortgage. The fee for recording and indexing an instrument shall
be as provided in section 331.604.