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.
Arizona Law
Execution of Assignment or Satisfaction: Assignment
must be signed by mortgagee. Satisfaction must be signed by mortgagee or
trustee.
Assignment: An assignment of a mortgage
may be recorded in like manner as a mortgage, and the record is notice
to all persons subsequently deriving title to the mortgage from the assignor.
Demand to Satisfy: If the lender has failed
to record the satisfaction of the deed of trust within 30 days of full
payment, he becomes liable to the borrower for damages caused by the failure.
If the borrower then sends a written request to record satisfaction by
certified mail to the lender, and the lender fails to do so within 30 days
of receipt thereof, then lender becomes liable for $1000 plus damages.
(See below, sec. 33-712.)
Recording Satisfaction: If
a mortgagee, trustee or person entitled to payment receives full satisfaction
of a mortgage or deed of trust, he shall acknowledge satisfaction of the
mortgage or deed of trust by delivering to the person making satisfaction
or by recording a sufficient release or satisfaction of mortgage or deed
of release and reconveyance of the deed of trust, which release, satisfaction
of mortgage or deed of release and reconveyance shall contain the docket
and page number or recording number of the mortgage or deed of trust.
Marginal Satisfaction: Marginal satisfaction
is still recognized.
Penalty: See above entry for Demand
to Satisfy.
Acknowledgment: An assignment or satisfaction
must contain a proper Arizona acknowledgment, or other acknowledgment approved
by Statute.
Arizona Statutes
33-706. Assignment of mortgage; recording as notice
An assignment of a mortgage may be recorded in like manner as
a mortgage, and the record is notice to all persons subsequently deriving
title to the mortgage from the assignor.
33-707. Acknowledgment of satisfaction; recording
A. If a mortgagee, trustee or person entitled to payment receives
full satisfaction of a mortgage or deed of trust, he shall acknowledge
satisfaction of the mortgage or deed of trust by delivering to the person
making satisfaction or by recording a sufficient release or satisfaction
of mortgage or deed of release and reconveyance of the deed of trust,
which release, satisfaction of mortgage or deed of release and reconveyance
shall contain the docket and page number or recording number of the mortgage
or deed of trust. It shall not be necessary for the trustee to join in
the acknowledgment or satisfaction, or in the release, satisfaction of
mortgage or deed of release and reconveyance. The recorded release or satisfaction
of mortgage or deed of release and reconveyance constitutes conclusive
evidence of full or partial satisfaction and release of the mortgage or
deed of trust in favor of purchasers and encumbrancers for value and without
actual notice.
B. When a mortgage or deed of trust is satisfied by a release or
satisfaction of mortgage or deed of release and reconveyance, except where
the record of such deed of trust or mortgage has been destroyed or reduced
to microfilm, the recorder shall record the release or satisfaction
of the deed of trust or mortgage showing the book and page or recording
number where the deed of trust or mortgage is recorded.
C. If the record of such mortgage or deed of trust has been destroyed
and the record thereof reduced to microfilm, it shall be sufficient evidence
of satisfaction of any such mortgage or deed of trust for the release or
satisfaction of mortgage or deed of release and reconveyance to be recorded
and indexed as such. The instrument shall sufficiently identify the mortgage
or deed of trust by parties and by book and page or recording number of
the official records. Such instrument shall be treated as a release or
satisfaction of mortgage or deed of release and reconveyance and recorded.
D. If the note secured by a mortgage or deed of trust has been lost
or destroyed, the assignee, mortgagee or beneficiary shall, before acknowledging
satisfaction, make an affidavit that he is the lawful owner of the note
and that it has been paid, but cannot be produced for the reason that it
has been lost or destroyed, and the affidavit shall be recorded. If the
record of such mortgage or deed of trust has been destroyed and the record
thereof reduced to microfilm, such affidavit shall be recorded and indexed
as releases, satisfactions of mortgage and deeds of release and reconveyance
are recorded and indexed and shall have the same force and effect as a
release or satisfaction of a mortgage or deed of release and reconveyance
as provided in subsection A of this section.
E. If a full or partial release or satisfaction of mortgage or deed
of release and reconveyance of deed of trust, which according to its terms
recites that it secures an obligation having a stated indebtedness not
greater than five hundred thousand dollars exclusive of interest, has not
been executed and recorded pursuant to subsection A or C of this section
within sixty days of full or partial satisfaction of the obligation secured
by such mortgage or deed of trust, then a title insurer as defined in section
20-1562 may prepare, execute and record a full or partial release or satisfaction
of mortgage or deed of full or partial release and reconveyance of deed
of trust. At least thirty days prior to the issuance and recording of any
such release or satisfaction of mortgage or deed of release and reconveyance
pursuant to this subsection, the title insurer shall mail by certified
mail with postage prepaid, return receipt requested, to the mortgagee of
record or to the trustee and beneficiary of record and their respective
successors in interest of record at their last known address shown of record
and to any persons who according to the records of the title insurer received
payment of the obligation at the address shown in such records, a notice
of its intention to release the mortgage or deed of trust accompanied by
a copy of the release or satisfaction of mortgage or deed of release and
reconveyance to be recorded which shall set forth:
1. The name of the beneficiary or mortgagee or any successors in
interest of record of such mortgagee or beneficiary and, if known, the
name of any servicing agent.
2. The name of the original mortgagor or trustor.
3. The name of the current record owner of the property and if the
release or satisfaction of mortgage or deed of release and reconveyance
is a partial release, the name of the current record owner of the parcel
described in the partial release or satisfaction of mortgage or deed of
partial release and reconveyance of deed of trust.
4. The recording reference to the deed of trust or mortgage.
5. The date and amount of payment, if known.
6. A statement that the title insurer has actual knowledge that
the obligation secured by the mortgage or deed of trust has been paid in
full, or if the release or satisfaction of mortgage or deed of release
and reconveyance of deed of trust is a partial release, a statement that
the title insurer has actual knowledge that the partial payment required
for the release of the parcel described in the partial release or satisfaction
has been paid.
F. The release or satisfaction of mortgage or release and reconveyance
of deed of trust may be executed by a duly appointed attorney-in-fact of
the title insurer, but such delegation shall not relieve the title insurer
from any liability pursuant to this section.
G. A full or partial release or satisfaction of mortgage or deed
of full or partial release and reconveyance of deed of trust issued pursuant
to subsection E of this section shall be entitled to recordation and, when
recorded, shall constitute a full or partial release or satisfaction of
mortgage or deed of release and reconveyance of deed of trust issued pursuant
to subsection A or C of this section.
H. Where an obligation secured by a deed of trust or mortgage was
paid in full prior to September 21, 1991, and no release or satisfaction
of mortgage or deed of release and reconveyance of deed of trust has been
issued and recorded within sixty days of September 21, 1991, a release
or satisfaction of mortgage or deed of release and reconveyance of deed
of trust as provided for in subsection E of this section may be prepared
and recorded without the notice prescribed by subsection E of thissection.
I. A release or satisfaction of mortgage or a release and reconveyance
of deed of trust by a title insurer under the provisions of subsection
E of this section shall not constitute a defense nor release any person
from compliance with subsections A through D of this section or from liability
under section 33-712.
J. In addition to any other remedy provided by law, a title insurer
preparing or recording the release and satisfaction of mortgage or the
release and reconveyance of deed of trust pursuant to subsection E of this
section shall be liable to any party for actual damage, including attorneys'
fees, which any person may sustain by reason of the issuance and recording
of the release and satisfaction of mortgage or release and reconveyance
of deed of trust.
K. The title insurer shall not record a release and satisfaction
of mortgage or release and reconveyance of deed of trust if, prior to the
expiration of the thirty day period specified in subsection E of this section,
the title insurer receives a notice from the mortgagee, trustee, beneficiary,
holder or servicing agent which states that the mortgage or deed of trust
continues to secure an obligation, or in the case of a partial release
or satisfaction of mortgage or deed of partial release and reconveyance
of deed of trust, a notice that states that the partial payment required
to release the parcel described in the partial release or satisfaction
has not been paid.
L. The title insurer may charge a reasonable fee to the owner of
the land or other person requesting a release and satisfaction of mortgage
or release and reconveyance of deed of trust, including but not limited
to search of title, document preparation and mailing services rendered
and may in addition collect official fees.
33-708. Release by attorney in fact
An attorney in fact to whom the money due on a mortgage or deed
of trust is paid may execute the release provided for in this article.
Such acknowledgment of satisfaction or deed of release, duly acknowledged
and recorded, showing the docket and page or recording number, releases
the mortgage or deed of trust and revests in the mortgagor or person who
executed the deed of trust, or his legal representatives, all title to
the property affected by the mortgage or deed of trust.
33-709. Acknowledgment of satisfaction by personal representative
of mortgagee to whom indebtedness was paid before death
The executor or administrator of a mortgagee or of the holder or
owner of an indebtedness secured by a mortgage or deed of trust shall,
if the indebtedness was paid to the decedent in his lifetime, acknowledge
satisfaction thereof by delivering to such person a sufficient release,
satisfaction of mortgage or deed of release of the mortgage or deed of
trust or acknowledge satisfaction as provided in subsection C of section
33-707. If the executor or administrator, upon proof to him of the payment
of the indebtedness to his decedent, does not, within thirty days, acknowledge
satisfaction by delivering to the person owning the property a sufficient
release, satisfaction of mortgage or deed of release, or acknowledge satisfaction
as provided in subsection C of section 33-707, he shall personally forfeit
to the party aggrieved one hundred dollars and be personally liable for
the damages thereby sustained. The executor or administrator shall not
be liable to the estate of which he is executor or administrator for any
indebtedness by mortgage or deed of trust released by him in accordance
with this section.
33-712. Liability for failure to acknowledge satisfaction
A. If any person receiving satisfaction of a mortgage or deed of
trust shall, within thirty days, fail to record or cause to be recorded,
with the recorder of the county in which the mortgage or deed of trust
was recorded, a sufficient release, satisfaction of mortgage or deed of
release or acknowledge satisfaction as provided in section 33-707, subsection
C, he shall be liable to the mortgagor, trustor or current property owner
for actual damages occasioned by the neglect or refusal.
B. If, after the expiration of the time provided in subsection A
of this section, the person fails to record or cause to be recorded a sufficient
release and continues to do so for more than thirty days after receiving
a written request which identifies a certain mortgage or deed of
trust by certified mail from the mortgagor, trustor, current property
owner or his agent, he shall be liable to the mortgagor, trustor or current
property owner for one thousand dollars, in addition to any actual damage
occasioned
by the neglect or refusal.
C. Any action to enforce the provisions of this section, including
any action to recover amounts due under this section, shall be brought
and maintained in the individual names of, and shall be prosecuted by,
persons entitled to recover under the terms thereof, and not in a representative
capacity or otherwise. This subsection shall apply to all actions under
this section, whether brought before or after July 13, 1988.
