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.
Kentucky Law
Execution of Assignment or Satisfaction: Must
be signed by the mortgagee.
Assignment: An assignment must be in writing
and recorded.
Demand to Satisfy: Written demand required.
See below, Penalty.
Recording Satisfaction: A holder of a lien
on real property shall release the lien in the county clerk's office where
the lien is recorded within thirty (30) days from the date of satisfaction.
Marginal Satisfaction: Not allowed.
Penalty: If the court finds that the lienholder
received written notice of its failure to release and lacked good cause
for not releasing the lien, the lienholder shall be liable to the owner
of the real property in the amount of one hundred dollars ($100) per day
for each day, beginning on the fifteenth day after receipt of the written
notice, of the violation for which good cause did not exist. A lienholder
that continues to fail to release a satisfied real estate lien, without
good cause, within forty-five (45) days from the date of written notice
shall be liable to the owner of the real property for an additional four
hundred dollars ($400) per day for each day for which good cause did not
exist after the forty-fifth day from the date of written notice, for a
total of five hundred dollars ($500) per day for each day for which good
cause did not exist after the forty-fifth day from the date of written
notice. The lienholder shall also be liable for any actual expense including
a reasonable attorney's fee incurred by the owner in securing the release
of real property by such violation.
Acknowledgment: An assignment or satisfaction
must contain a proper Kentucky acknowledgment, or other acknowledgment
approved by Statute.
Kentucky Statutes
382.290 Recording of mortgages and deeds retaining liens -- Assignment
-- Discharge -- Form of record -- Clerk's fee.
(1) In recording mortgages and deeds in which liens are retained
(except railroad mortgages securing bonds payable to bearer), there shall
be left a blank space immediately after the record of the deed or mortgage
of at least two (2) full lines for each note or obligation named in the
deed or mortgage, or in the alternative, at the option of the county clerk,
a marginal entry record may be kept for the same
purposes as the blank space. Each entry in the marginal entry record
shall be linked to its respective referenced instrument in the indexing
system for the referenced instruments.
(2) When any note named in any deed or mortgage is assigned to
any other person, the assignor may, over his own hand, attested by the
clerk, note such assignment in the blank space, or in a marginal entry
record, beside a listing of the book and page of the document being assigned, and when any one (1) or more
of the notes named in any deed or mortgage is paid, or otherwise released
or satisfied, the holder of the note, and who appears from the record to
be such holder, may release the lien, so far
as such note is concerned, by release, over his own hand, attested
by the clerk. Each entry in the marginal entry record shall be linked to
its respective referenced instrument in the indexing system for the referenced
instrument.
(3) No person who does not, from such record or assignment of record,
appear at the time to be the legal holder of any note secured by lien in
any deed or mortgage, shall be permitted to release the lien securing any
such note, and any release made in contravention of this section shall
be void; but this section does not change the existing law if no such entry
is made.
(4) For each assignment and release so made and attested by the
clerk, he may charge a fee pursuant to KRS 64.012 to be paid by the person
executing the release or noting the assignment.
(5) If such assignment of a note is made by separate instrument
or by deed assigning the note, or in a marginal entry record, the instrument
of writing or deed or marginal entry record shall set forth the date of
notes assigned, a brief description of notes, the name and post office
address of assignee, and the deed book and page of the instrument wherein
the lien or mortgage is recorded and the clerk or deputy clerk
receiving such instrument of writing or deed of assignment for
record shall at the option of the county clerk immediately either link
the assignment and its filing location to its respective referenced instrument
in the indexing system for the
referenced instrument, or endorse at the foot of the record in
the space provided in subsection (1), "The notes mentioned herein (giving
a brief description of notes assigned) have been transferred and assigned
to (insert name and address of assignee) by deed of assignment (or describe
instrument) dated and recorded in deed book .... page ....," and attest
such certificate. For making such notation on the record the clerk shall
be allowed a fee pursuant to KRS 64.012 for each notation so made, to be
paid by the party filing the instrument of writing or deed of assignment.
(6) No holder of a note secured by lien retained in either deed
or mortgage shall lodge for record, and no clerk or deputy clerk shall
receive and permit to be lodged for record, any deed or instrument of writing
that does not comply with the provisions of this section.
382.335 Certain information to be included in instruments in
order for them to be recorded.
(1) No county clerk shall receive or permit the recording of any
instrument by which the title to real estate or personal property, or any
interest therein or lien thereon, is conveyed, granted, encumbered, assigned,
or otherwise disposed of; nor receive any instrument or permit any instrument,
provided by law, to be recorded as evidence of title to real estate; and
shall not receive or permit any instrument, relating to the organization
or dissolution of a private corporation, unless the instrument has endorsed
on it, a printed, typewritten, or stamped statement showing the name and
address of the individual who prepared the instrument, and the statement
is signed by the individual. The person who prepared the instrument may
execute his signature by affixing a facsimile of his signature on the instrument.
This subsection shall not apply to any instrument executed or acknowledged
prior to July 1, 1962.
(2) No county clerk shall receive or permit the recording of any
instrument by which the title to real estate or any interest therein is
conveyed, granted, assigned, or
otherwise disposed of unless the instrument contains the mailing
address of the grantee or assignee. This subsection shall not apply to
any instrument executed or acknowledged prior to July 1, 1970.
(3) This section shall not apply to wills or to statutory liens
in favor of the Commonwealth.
(4) No county clerk shall receive, or permit the recording of, any
instrument by which real estate, or any interest therein, is conveyed,
granted, assigned, transferred, or otherwise disposed of unless the instrument
complies with the official indexing system of the county. The indexing
system shall have been in place for at least twenty-four (24) months prior
to July 15, 1994 or shall be implemented for the purpose of allowing computerized
searching for the instruments of record of the county clerk. If a county
clerk requires a parcel identification number on an instrument before recording,
the clerk shall provide a computer terminal, at no
charge to the public, for use in finding the parcel identification
number. The county clerk may make reasonable rules about the use of the
computer terminal, requests
for a parcel identification number, or both.
(5) The receipt for record and recording of any instrument by the
county clerk without compliance with the provisions of this section shall
not prevent the record of filing of the instrument from becoming notice
as otherwise provided by law, nor impair the admissibility of the record
as evidence.
382.365 Release of lien, with notice to property owner, within
thirty days of satisfaction -- Proceeding against lienholder in District
Court or Circuit Court -- Liability of lienholder when lien not released
or notice not sent -- Notice to state or lienholder.
(1) A holder of a lien on real property, including a lien provided
for in KRS 376.010, shall release the lien in the county clerk's office
where the lien is recorded within thirty (30) days from the date of satisfaction.
(2) A proceeding may be filed by any owner of real property or any
party acquiring an interest in the real property in District Court or Circuit
Court against a lienholder
that violates subsection (1) of this section. A proceeding filed
under this section shall be given precedence over other matters pending
before the court.
(3) Upon proof to the court of the lien being satisfied, the court
shall enter a judgment releasing the lien. The judgment shall be with costs
including a reasonable attorney's fee. If the court finds that the lienholder
received written notice of its failure to release and lacked good cause
for not releasing the lien, the lienholder shall be liable to the owner
of the real property in the amount of one hundred dollars ($100) per day
for each day, beginning on the fifteenth day after receipt of the written
notice, of the violation for which good cause did not exist.
(4) A lienholder that continues to fail to release a satisfied
real estate lien, without good cause, within forty-five (45) days from
the date of written notice shall be liable to the owner of the real property
for an additional four hundred dollars ($400) per day for each day for
which good cause did not exist after the forty-fifth day from the date
of written notice, for a total of five hundred dollars ($500) per day for
each day for which good cause did not exist after the forty-fifth day from
the date of written notice. The lienholder shall also be liable for any
actual expense including a reasonable attorney's fee incurred by the owner
in securing the release of real property by such violation.
(5) The former holder of a lien on real property shall send by regular
mail a copy of the lien release to the property owner at his last known
address within seven (7) days of the release. A former lienholder that
violates this subsection shall be liable to the owner of the real property
for fifty dollars ($50) and any actual expense incurred by the owner in
obtaining documentation of the lien release.
(6) For the purposes of this section, "date of satisfaction" means
that date of receipt by a holder of a lien on real property of a sum of
money in the form of a certified check, cashier's check, wired transferred
funds, or other form of payment satisfactory to the lienholder that is
sufficient to pay the principal, interest, and other costs owing on the
obligation that is secured by the lien on the property.
(7) The provisions of this section shall not apply when a lienholder
is deceased and the estate of the lienholder has not been settled.
(8) The state licensing agency, if applicable, or any holder of
a lien on real property shall be notified of the disposition of any actions
brought under this section against the lienholder.
(9) The provisions of this section shall be held and construed as
ancillary and
supplemental to any other remedy provided by law.
