Real Property – Mortgage Satisfaction – Texas
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.
Recording Satisfaction: There are no provisions requiring a Texas creditor to release a fully paid debt, but if 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.
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:
(1) that the master form is recorded in the county in which the instrument is offered for record;
(2) the numbers of the book or volume and first page of the records in which the master form is recorded; and
(3) a definite identification of each provision being incorporated.
(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:
(1) “Mortgage” means a deed of trust or other contract lien on an interest in real property.
(2) “Mortgagee” means:
(A) the grantee of a mortgage;
(B) if a mortgage has been assigned of record, the last person to whom the mortgage has been assigned of record; or
(C) if a mortgage is serviced by a mortgage servicer, the mortgage servicer.
(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.
(4) “Mortgagor” means the grantor of a mortgage.
(5) “Payoff statement” means a statement of the amount of:
(A) the unpaid balance of a loan secured by a mortgage, including principal, interest, and other charges properlyassessed under the loan documentation of the mortgage; and
(B) interest on a per diem basis for the unpaid balance.
(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:
(1) the affiant is an authorized officer of a title insurance company;
(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;
(3) the mortgagee provided a payoff statement with respect to the loan secured by 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
(B) another documentary evidence of the receipt of payment by the mortgagee;
(5) more than 60 days have elapsed since the date payment was received by the mortgagee;
(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
(2) the payoff statement.
(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.