Assignment of Deed of Trust by Individual Mortgage Holder
Assignment and Satisfaction of Mortgages
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.
Virginia Law
Assignment:
It is recommended that an assignment be in writing and recorded.
Demand to Satisfy:
Upon full payoff, borrower must provide written demand for satisfaction to lender, whereupon lender
is obligated to record satisfaction of the deed of trust within 90 days
or face liability.
Recording Satisfaction:
Certificate of satisfaction shall be signed by the lender along with an affidavit of full
payment and these filed with the clerk of the recording office.
Penalty:
Any lien creditor who fails to record satisfaction within the ninety-day period shall forfeit $500 to
the lien obligor. Following the ninety-day period, if the amount forfeited
is not paid within ten business days after demand for payment, the lien
creditor shall pay any court costs and reasonable attorney's fees incurred
by the obligor in collecting the forfeiture.
Acknowledgment:
An assignment or satisfaction must contain a proper Virginia acknowledgment, or other acknowledgment
approved by Statute.
Virginia Statutes
§ 55-66.3. Release of deed of trust or other lien.
A. 1. When payment or satisfaction is made of a debt secured by
mortgage, deed of trust, vendor's lien, or other lien, or when any one
or more of the obligations representing at least twenty-five percent of
the whole amount secured by any such lien, but less than the whole number
of the obligations so secured, when the debt secured thereby is evidenced
by two or more separate written obligations sufficiently described in the
instrument creating the lien, have been fully paid, the lien creditor,
unless he has delivered a proper release deed, shall, within ninety
days after notice that the full or partial payment or satisfaction has
been made, cause such payment to be recorded on a certificate of satisfaction
or certificate of partial satisfaction in the clerk's office. A lien
creditor may satisfy this requirement by mailing such certificate by certified
mail, return receipt requested, or by hand-delivery, when there is written
proof of receipt from the clerk's office. Any lien creditor who fails to
satisfy this requirement as set forth above or to cause such recordation
as set forth in § 17.1-223 or to mail or deliver to the obligor or
the obligor's designee an executed certificate of satisfaction within the
ninety-day period shall forfeit $500 to the lien obligor. Following
the ninety-day period, if the amount forfeited is not paid within ten business
days after demand for payment, the lien creditor shall pay any court costs
and reasonable attorney's fees incurred by the obligor in collecting
the forfeiture.
2. If the note, bond or other evidence of debt secured by such mortgage,
deed of trust, vendor's lien or other lien referred to in subdivision 1
of this subsection or any interest therein, has been assigned or transferred
to a party other than the original lien creditor, and such subsequent holder
is responsible for a failure to record a certificate of satisfaction or
certificate of partial satisfaction or for a failure to mail or deliver
to the appropriate clerk's office, the obligor or the obligor's designee
an executed certificate of satisfaction, the subsequent holder shall be
liable to the lien obligor for the $500 penalty, court costs and attorney's
fees specified in subdivision 1 of this subsection. It shall be the responsibility
of the obligor or owner to provide the note holder with a current name
and address of the person to whom the certificate of satisfaction or certificate
of partial satisfaction should be sent.
B. The certificate of satisfaction shall be signed by the creditor
or his duly authorized agent, attorney or attorney-in-fact, or any person
to whom the instrument evidencing the indebtedness has been endorsed or
assigned for the purpose of effecting such release. An affidavit shall
be filed or recorded with the certificate of satisfaction, by the creditor,
or his duly authorized agent, attorney or attorney-in-fact, with such clerk,
stating that the debt therein secured and intended to be released or discharged
has been paid to such creditor, his agent, attorney or attorney-in-fact,
who was, when the debt was satisfied, entitled and authorized to receive
the same.
C. And when so signed and the affidavit hereinbefore required
has been duly filed or recorded with the certificate of satisfaction with
such clerk, the certificate of satisfaction shall operate as a release
of the encumbrance as to which such payment or satisfaction is entered
and, if the encumbrance be by deed of trust or mortgage, as a reconveyance
of the legal title as fully and effectually as if such certificate of satisfaction
were a formal deed of release duly executed and recorded.
D. As used in this section, the terms "lien creditor" and "creditor"
shall be construed as synonymous and shall embrace the lien creditor or
his successor in interest as evidenced by proper endorsement or assignment,
general or restrictive, upon the note, bond or other evidence of debt.
As used in this section, the term "obligor's designee" shall include an
attorney or other settlement agent closing a transaction which results
in the obligor's loan being paid off.
§ 55-66.4. Partial satisfaction or release.
It shall be lawful for any such lienor to make a marginal release
or record a certificate of partial satisfaction of any one or more of the
separate pieces or parcels of property covered by such lien. It shall also
be lawful for any such lienor to make a marginal release or record a certificate
of partial satisfaction of any part of the real estate covered by such
lien if a plat of such part or a deed of such part is recorded in the clerk's
office and a cross reference is made in the marginal release or certificate
of partial satisfaction to the book and page where the plat or deed of
such part is recorded. Such marginal partial release or satisfaction or
certificate of partial satisfaction may be accomplished in manner and form
hereinbefore in this chapter provided for making marginal releases or certificates
of satisfaction, except that the creditor, or his duly authorized agent,
shall make an affidavit to the clerk or in such certificate that such creditor
is at the time of making such release the legal holder of the obligation,
note, bond or other evidence of debt, secured by such lien, and when made
in conformity therewith and as provided herein such partial satisfaction
or release shall be as valid and binding as a proper release deed duly
executed for the same purpose.
Any and all partial marginal releases made prior to July 1, 1966,
in any county or city of this Commonwealth, in conformity with the provisions
of this chapter, either of one or more separate pieces or parcels of real
estate or any part of the real estate covered by such lien, or as to one
or more of the obligations secured by any such lien, or as to all of the
real estate covered by such lien instrument, are hereby validated and declared
to be binding upon all parties in interest; but this provision shall not
be construed as intended to disturb or impair any vested right.
