Tennessee Assignment and Satisfaction of Mortgage Law


Real Property – Mortgage Satisfaction – Tennessee

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.

Tennessee Law

Assignment: It is recommended that an assignment be in writing and recorded.

Demand to Satisfy: By written request. If holder of debt fails to enter release of record within 45 days after receipt of request, penalty is $100, and Mortgagor must request again by writing. If holder then fails to enter release of record within 30 days from receipt of 2nd request, penalty is $1000.

Recording Satisfaction: The Mortgagee or the legal holder of the debt secured by deed of trust or lien, who has received payment or satisfaction of the debt, must satisfy the record by a formal deed of release.

Marginal Satisfaction: Only in counties having specific population sizes. See statutes, below.

Penalty: If holder of debt fails to enter release of record within 45 days after receipt of request, penalty is $100, and Mortgagor must request again by writing. If holder then fails to enter release of record within 30 days from receipt of 2nd request, penalty is $1000.

Acknowledgment: An assignment or satisfaction must contain a proper Tennessee acknowledgment, or other acknowledgment approved by Statute.

Tennessee Statutes

66-25-101. Requirements for record of release.

(a)  When a debt secured by a mortgage, deed of trust, or by lien retained in a deed of conveyance of land or bill of sale, or other instrument, has been fully paid or satisfied, the mortgagee, transferee, or assignee of the mortgagee or the legal holder of the debt secured by deed of trust or lien, who has received payment or satisfaction of the debt, must satisfy the record by a formal deed of release.
(b)  In any county having a population of not less than thirty-two thousand six hundred (32,600) nor more than thirty-two thousand seven hundred (32,700) according to the 1980 federal census or any subsequent federal census the record may be satisfied by entry on the margin of the record of the mortgage, deed of trust, deed or other instrument.

66-25-102. Penalty for failure to release.

(a)  If the holder of any debt secured by real property situated in this state fails to enter a proper release of record after having been fully paid or satisfied within forty-five (45) days from the receipt of a written request from the party making such payment, including, but not limited to, the maker, the mortgagor, the purchaser of the property covered by such instrument or any closing agent or attorney who has collected and transmitted funds for such payment, the holder of the debt shall forfeit to the party making such request the sum of one hundred dollars ($100).
(b)  If the indebtedness is not released within the aforestated forty-five-day period, the party having requested the release shall again request the release, and, if after thirty (30) days from the second request, the indebtedness has not been released, the holder shall forfeit to the party making the request a sum not to exceed one thousand dollars ($1,000).
(c)  In the event suit is instituted to collect either or both of the forfeitures, the holder shall also be liable to the party instituting suit for all reasonable expenses, attorney fees, and the court costs incurred in the action.