Real Property – Mortgage Satisfaction – Massachusetts

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.

Massachusetts Law

Execution of Assignment or Satisfaction: Must be signed by the mortgagee.

Assignment: An assignment must be in writing and recorded.

Demand to Satisfy: None required. Mortgagee must record satisfaction within 45 days of payoff or suffer liability.

Recording Satisfaction: The recordation of a discharge duly executed and acknowledged by a mortgagee, mortgage holder, mortgage servicer or note holder shall constitute a discharge of the mortgage and a release of the lien created by such mortgage on the mortgaged premises (but see statutes below for details).

Penalty: If holder of satisfied mortgage does not record satisfaction of record within 45 days of final payoff, he shall be liable to borrower for actual damages caused by holder’s failure to so record.

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

Massachusetts Statutes

Chapter 183: Section 54. Method of discharge of mortgage.

Section 54. For the purposes of sections fifty-four to fifty-five, inclusive, the following words, unless the context otherwise requires, shall have the following meanings: “Discharge”, a deed of release or written acknowledgement of payment or satisfaction of the debt or obligation secured by a mortgage or the conditions therein contained, or, in the case of a partial release issued by a mortgage servicer or noteholder pursuant to this section or section fifty-four C, a partial release evidencing that a payment has been made pursuant to the debt or obligation secured by such mortgage or the conditions therein contained. “Federally related mortgage loan”, a federally related mortgage loan as defined in the Real Estate Settlement Procedures Act of 1974, 12 USC section 2602.”Mortgagee” or “mortgage holder”, the holder of record of a mortgage deed; provided, however, that if the mortgage deed has been assigned of record, mortgagee or mortgage holder shall mean the last person to whom such mortgage deed has been assigned of record. “Mortgage servicer”, the last person servicing a federally related mortgage loan who has provided a payoff statement with respect to said federally related mortgage loan, whether or not appearing of record as the mortgagee or the mortgage holder. “Note holder”, the holder of a note evidencing a debt or any other obligation secured by a mortgage; provided, however, that if the note holder is not the holder of record of the mortgage deed, said note shall contain the appropriate endorsements evidencing the transfer of ownership thereof to said holder. “Payoff statement”, a statement, oral or in writing, issued at the request of the mortgagor or an authorized person on his behalf by a mortgagee, mortgage holder, mortgage servicer or note holder indicating the amount of the unpaid balance of the mortgage loan, including principal, interest and other charges assessed pursuant to such mortgage loan which may include the interest on a per diem basis with respect to the unpaid principal balance of the mortgage. “Person”, an individual, corporation, business trust, testamentary trust, partnership, association, joint venture, government,governmental subdivision or agency or other legal or commercial entity. “Recordation” or “recorded”, a recording with the registry of deeds in accordance with chapter one hundred and eighty-three,or registration with the registry district of the land court in accordance with chapter one hundred and eighty-five. “Servicing”, the receipt by a mortgage servicer of scheduled periodic payments and payoff monies from a mortgagor on a federally related mortgage loan, and the allocation of such payments to principal, interest, municipal real estate taxes and other appropriate assessments and charges, all pursuant to the terms of the loan. One of two or more joint holders of a mortgage may discharge it by a deed of release duly acknowledged and recorded. A mortgage may also be discharged by a written acknowledgement of payment or satisfaction of the debt thereby secured, or of the conditions therein contained, signed and sealed by the mortgagee, mortgage holder, mortgage servicer or note holder, his executor, administrator, successor or assignee. Such instrument shall have the same effect as a deed of release, shall be valid if executed by one of two or more joint holders of a mortgage, and may be recorded when duly acknowledged or on proof of its execution in accordance with sections thirty-four to forty-one, inclusive. The recordation of a duly executed and acknowledged deed of release or written acknowledgement of payment or satisfaction as provided herein shall be conclusive evidence that the mortgage has been discharged notwithstanding the fact that the party signing such instrument may have assigned the note or other evidence of debt to another party, unless such assignment had been duly recorded prior to the instrument discharging the mortgage. Such deed of release or written acknowledgement of payment or satisfaction shall contain the street address of the mortgaged property, the volume and page number or document number of the mortgage and the name of the mortgagor; provided, however, that the failure to include such information shall not affect the validity of the instrument. The provisions of this section apply notwithstanding the provisions of section three-one hundred and sixteen of chapter one hundred and six.

Chapter 183: Section 54A. Defective discharges of mortgages held by entirety; effect.

Section 54A. After the expiration of a period of ten years from the recording of a discharge or release of a mortgage held by husband and wife as tenants by the entirety and signed by only the husband or the wife, no steps shall be taken by action, entry or otherwise to foreclose or enforce such mortgage or the note or notes secured thereby, unless within such period the spouse who did not sign such discharge or release has recorded in the registry of deeds for the county or district where the mortgage is recorded a notice identifying the mortgage and the book and page of its recording and stating that rights of a tenant by the entirety may be claimed in the mortgage or the note or notes secured thereby. A reference to such notice shall be noted on the margin of the record of the mortgage.

Chapter 183: Section 54B. Deed of release, written acknowledgement of payment or satisfaction, release or assignment of mortgage; execution before officer entitled to acknowledge instruments; effect.

Section 54B. A deed of release or written acknowledgment of payment or satisfaction of the debt thereby secured or a release, partial release or assignment of mortgage executed before a notary public, justice of the peace or other officer entitled by law to acknowledge instruments, whether executed within or without the commonwealth, by a person purporting to hold the position of president, vice president, treasurer, clerk, secretary, cashier, loan representative, principal, investment, mortgage or other officer, agent, asset manager, or other similar office or position, including assistant to any such office or position, of the entity holding record title thereto on behalf of such entity acting in its own capacity or as a general partner or co-venturer of the entity holding record title, shall be binding upon such entity and shall be entitled to be recorded or filed, and no vote of the entity affirming such authority shall be required to permit recording or filing.

Chapter 183: Section 54C. Discharge of mortgage and release of lien; conditions of discharge where discharge is not executed by holder of record.

Section 54C. The recordation of a discharge duly executed and acknowledged by a mortgagee, mortgage holder, mortgage servicer or note holder shall constitute a discharge of the mortgage and a release of the lien created by such mortgage on the mortgaged premises; provided, however, that a discharge executed by a mortgage servicer or note holder who is not the holder of record of such mortgage deed will operate as a discharge and release of lien as aforesaid only as to a federally related mortgage securing a one-to-four family residence and only where such a discharge is accompanied by the following:

(A) In the case of a mortgage servicer:

(1) an original or photostatic copy of the servicing agreement, power of attorney or other document evidencing the authority of the mortgage servicer to service the mortgage, which shall be duly recorded and referenced on said discharge. Such copy shall contain a certification by the mortgagee, mortgage holder or mortgage servicer that it is a true copy of the original document.

(2) In the absence of such documents, said discharge may be effected by the recording of:

(a) an affidavit executed under the pains and penalties of perjury by the mortgagor affirming the inability to obtain any of said documents, the payments made and the reasons why such payments were made to such mortgage servicer, and attaching thereto evidence of such payments in the form of cancelled checks or otherwise, or,

(b) in the event the mortgagor is no longer the record owner of the premises and cannot be located, an affidavit executed under the pains and penalties of perjury by an owner of record for more than three years other than the mortgagor, who purchased the premises subsequent to the recording of the mortgage, and whose recorded deed made no reference to the mortgage remaining outstanding, stating as follows:

(i)that said owner purchased the premises in good faith and for value in the belief that the premises were not encumbered by the mortgage; that said owner has not made any payments on account of the mortgage; and that no claims have been made under the mortgage subsequent to said purchase against said owner, and

(ii) an affidavit executed by the attorney who, pursuant to a payoff statement from said mortgage servicer, transmitted funds to said mortgage servicer sufficient to satisfy in full the outstanding balance of the loan secured by such mortgage, affirming the inability to obtain any of said documents despite sending a demand by registered or certified mail to the servicer and the holder of record at their last known addresses at least thirty days prior, the payment in full of said outstanding balance of the mortgage loan, and the acceptance thereof by said mortgage servicer. Evidence of such acceptance in the form of a cancelled check or otherwise shall be attached to said affidavit.

(B) In case of a note holder who is not the holder of record of the mortgage deed: an original or photostatic copy of the note, with the endorsements thereon evidencing the transfer of ownership of such note to said holder, shall be duly recorded with or referenced in such discharge. Such copy shall contain a certificate by the note holder that it is a true copy of the original document. The provisions of this section shall apply to discharges executed on and after the effective date of this act relative to mortgages recorded prior to, on and after said effective date.

Chapter 183: Section 55. Liability for neglect or refusal to discharge; affidavits.

Section 55. A mortgagee, mortgage holder, mortgage servicer, or note holder, who has accepted full payment and satisfaction of the conditions of a mortgage in accordance with a payoff statement issued by such mortgagee, mortgage holder, mortgage servicer or note holder, as the case may be, and who refuses or neglects to provide a duly executed deed of release or written acknowledgement of payment or satisfaction of the debt thereby secured, or of the conditions therein contained, or to provide such supporting documents as may be required by section fifty-four C, relative to such mortgage within forty-five days after such acceptance shall be liable in damages to the owner of the equity of redemption or his successors in an amount equal to the actual damages sustained by said owner or his successors as the result of such refusal or neglect in addition to all other remedies available at law. Notwithstanding the foregoing, if such mortgagee, mortgage holder, mortgage servicer, or note holder fails to provide a duly executed deed of release or written acknowledgement of payment or satisfaction of the debt secured by the mortgage, or of the conditions therein contained, within thirty days from receipt and acceptance of payment in accordance with a written payoff statement furnished to the mortgagor by such mortgagee, mortgage holder, mortgage servicer or note holder, as the case may be, an attorney-at-law licensed to practice in the commonwealth may, on behalf of the mortgagor, his executor, administrator, successor, assignee, transferee, or his transferee’s mortgagee, execute and cause to be recorded in the registry of deeds in which the mortgage is recorded, an affidavit which states that:

(1) the affiant is an attorney-at-law in good standing and licensed to practice in the commonwealth;

(2) the affidavit is made on behalf of and at the request of the mortgagor, his executor, administrator, successor, assignee or transferee, or his transferee’s mortgagee;

(3) the mortgagee, mortgage holder, mortgage servicer, or note holder, has provide a written payoff statement with respect to the loan secured by the mortgage;

(4) the affiant has ascertained that the mortgagee, mortgage holder, mortgage servicer, or note holder, has received payment of the loan secured by the mortgage in accordance with the payoff statement, as evidenced by a bank check, certified check or attorney’s clients’ funds account check which has been negotiated by the mortgagee, mortgage holder, mortgage servicer, or note holder, or by other documentary evidence of such receipt of payment;

(5) more than thirty days have lapsed since such payment was received by the mortgagee, mortgage holder, mortgage servicer, or note holder;

(6) the affiant has given the mortgagee, mortgage holder, mortgage servicer, or note holder at least fifteen days notice in writing by certified mail of his intention to execute and cause to be recorded an affidavit in accordance with this section, together with a copy of the proposed affidavit; and that the mortgagee, mortgage holder, mortgage servicer, or note holder has not delivered a discharge or deed of release in response to such notification and that the mortgagor has complied with any request made by the mortgagee, mortgage holder, mortgage servicer, or note holder for additional payment at least fifteen days prior to the date of the affidavit. If the payoff was made to a note holder who was not a mortgagee or mortgage holder, an original or photostatic copy of the note, with the endorsements thereon evidencing the transfer of ownership of such note to said holder, shall be duly recorded and referenced in such affidavit, and such affidavit will operate as a discharge and release of lien as aforesaid only as to a federally related mortgage. Such copy shall contain a certificate by the note holder that it is a true copy of the original document. If the payoff was made to a mortgage servicer who was not a mortgagee or mortgage holder, such affidavit shall operate as a discharge and release of lien as aforesaid only as to a federally related mortgage and only so long as, in addition to such affidavit, one or more of the following are also duly recorded and referenced in such affidavit: an original or photostatic copy of the servicing agreement, power of attorney or other document evidencing the authority of the mortgage servicer to service the mortgage, with said copy containing a certification by the mortgage servicer or the party giving servicing authority that it is a true copy of the original instrument; or an affidavit of the mortgagor or an owner of record pursuant to clause (i) of subparagraph (2) of paragraph (A) of section fifty-four C. The affidavit shall also include the names and addresses of both the mortgagor and the mortgagee, mortgage holder, mortgage servicer or note holder, as the case may be, the date of the mortgage and the title reference. Similar information shall be included with respect to any recorded assignment of the mortgage.

The affiant shall attach to the affidavit

(a) photostatic copies of the documentary evidence that payment has been received by the mortgagee, mortgage holder, mortgage servicer, or note holder, including endorsement of any bank check, certified check or attorney’s client funds account check, and

(b) a photostatic copy of the payoff statement, and shall certify on each that it is a true copy of the original document. The affidavit, when so recorded, shall constitute a discharge of the mortgage and a release of the lien created by such mortgage on the mortgaged premises. Any person who causes any such affidavit to be recorded in accordance with this section, knowing information and statements contained therein to be false, shall be punished by a fine of not more than five thousand dollars in addition to all other remedies at law.