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.
Texas Law
Recording Satisfaction:
There are no provisions requiring a Texas creditor to release a fully paid debt, but if a creditor
fails to do so within 60 days of full payoff, a representative of a title
insurance company may record an affidavit which releases the lien described
in the affidavit.
Acknowledgment:
An assignment or satisfaction must contain a proper Texas acknowledgment, or other acknowledgment approved
by Statute.
Texas Statutes
CHAPTER 12. RECORDING OF INSTRUMENTS
§ 12.001. Instruments Concerning Property
(a) An instrument concerning real or personal
property may be recorded if it has been acknowledged, sworn to with a proper
jurat, or proved according to law.
(b) An instrument conveying real property
may not be recorded unless it is signed and acknowledged or sworn to by
the grantor in the presence of two or more credible subscribing witnesses
or acknowledged or sworn to before and certified by an officer authorized
to take acknowledgements or oaths, as applicable.
(c) This section does not require the acknowledgement
or swearing or prohibit the recording of a financing statement, a security
agreement filed as a financing statement, or a continuation statement filed
for record under the Business & Commerce Code.
(d) The failure of a notary public to attach
an official seal to an acknowledgment, a jurat, or other proof taken outside
this state but inside the United States or its territories renders the
acknowledgment, jurat, or other proof invalid only if the jurisdiction
in which the acknowledgment, jurat, or other proof is taken requires the
notary public to attach the seal.
§ 12.009. Mortgage or Deed of Trust Master Form
(a) A master form of a mortgage or deed
of trust may be recorded in any county without acknowledgement or proof.
The master form must contain on its face the designation: "Master form
recorded by (name of person causing the recording)."
(b) The county clerk shall index a master
form under the name of the person causing the recording and indicate in
the index and records that the document is a master mortgage.
(c) The parties to an instrument may incorporate
by reference a provision of a recorded master form with the same effect
as if the provision were set out in full in the instrument. The reference
must state:
(2) the numbers of the book or volume and
first page of the records in which the master form is recorded; and
(d) If a mortgage or deed of trust incorporates
by reference a provision of a master form, the mortgagee shall give the
mortgagor a copy of the master form at the time the instrument is executed.
A statement in the mortgage or deed of trust or in a separate instrument
signed by the mortgagor that the mortgagor received a copy of the master
form is conclusive evidence of its receipt. On written request the mortgagee
shall give a copy of the master form without charge to the mortgagor, the
mortgagor's successors in interest, or the mortgagor's or a successor's
agent.
(e) The provisions of the Uniform Commercial
Code prevail over this section.
§ 12.017 PROP. Title Insurance Company Affidavit as Release
of Lien; Civil Penalty
(a) In this section:
(3) "Mortgage servicer" means the last person
to whom a mortgagor has been instructed by a mortgagee to send payments
for the loan secured by a mortgage. A person transmitting a payoff statement
is considered the mortgage servicer for the mortgage described in the payoff
statement.
(A) the unpaid balance of a loan
secured by a mortgage, including principal, interest, and other charges
properly assessed under the loan documentation of the mortgage; and
(6) "Title insurance company" means a corporation
or other business entity authorized and licensed to transact the business
of insuring titles to interests in real property in this state.
(b) This section applies only to a mortgage on property consisting
exclusively of a one-to-four-family residence, including a residential
unit in a condominium regime.
(c) If a mortgagee fails to execute and deliver a release
of mortgage to the mortgagor or the mortgagor's designated agent within
60 days after the date of receipt of payment of the mortgage by the mortgagee
in accordance with a payoff statement furnished by the mortgagee or its
mortgage servicer, an authorized officer of a title insurance company may,
on behalf of the mortgagor or a transferee of the mortgagor who acquired
title to the property described in the mortgage, execute an affidavit that
complies with the requirements of this section and record the affidavit
in the real property records of each county in which the mortgage was recorded.
(d) An affidavit executed under this section must state that:
(2) the affidavit is made on behalf of the mortgagor
or a transferee of the mortgagor who acquired title to the property described
in the mortgage;
(4) the affiant has ascertained that the mortgagee
has received payment of the loan secured by the mortgage in accordance
with the payoff statement, as evidenced by:
(A) a bank check, certified check,
escrow account check from the title company or title insurance agent, or
attorney trust account check that has been negotiated by the mortgagee;
or
(6) the title insurance company or its agent
has given the mortgagee at least 15 days' notice in writing of its intention
to execute and record an affidavit in accordance with this section, with
a copy of the proposed affidavit attached to the written notice; and
(7) the mortgagee has not responded in writing
to the notification, or a request for additional payment made by the mortgagee
has been complied with at least 15 days before the date of the affidavit.
(e) The affidavit must include the names of the mortgagor
and the mortgagee, the date of the mortgage, and the volume and page or
clerk's file number of the real property records where the mortgage is
recorded, together with similar information for a recorded assignment of
the mortgage.
(f) The affiant must attach to the affidavit a photostatic
copy, certified as a true copy of the original document, of:
(1) the documentary evidence that payment has
been received by the mortgagee, including the mortgagee's endorsement of
a negotiated check if paid by check; and
(g) An affidavit that is executed and recorded as provided
by this section operates as a release of the mortgage described in the
affidavit.
(h) The county clerk shall index the affidavit in the names
of the original mortgagee and the last assignee of the mortgage appearing
of record as the grantors and in the name of the mortgagor as grantee.
(i) A person who knowingly causes an affidavit with false
information to be executed and recorded under this section is liable for
the penalties for filing a false affidavit, including the penalties for
commission of offenses under Section 37.02 PROP. of the Penal Code, and
to a party injured by the affidavit for actual damages or $5,000, whichever
is greater. The attorney general may sue to collect the penalty. If the
attorney general or an injured party bringing suit substantially prevails
in an action under this subsection, the court may award reasonable attorney's
fees and court costs to the prevailing party.
