Josephine Norton
A satisfaction of mortgage is a document signed by your lender confirming that you have fully paid off your mortgage and that the mortgage is no longer a lien on the property. In Florida, the lender must comply with the law within 60 days from the date of the final payment. The lender must prepare the mortgage satisfaction document, which identifies the property, the owners, the lenders, and the original amount of the mortgage. It must then be recorded with the proper county records department. If the lender fails to record a satisfaction within the set time limits, the lender may be responsible for damages set out by statute for failure to timely cancel the lien.
| Characteristics | Values |
|---|---|
| What is a satisfaction of mortgage? | A document signed by the lender stating that the borrower has fully paid off their mortgage and that the mortgage is no longer a lien on the property. |
| Who files it? | The lender must prepare and file the mortgage satisfaction. |
| When is it filed? | Within 60 days from the date of the last or full payment. |
| Where is it filed? | With the county records department where the property is located. |
| What happens if the lender fails to file? | The borrower may file a lawsuit against the lender to force the filing of a proper mortgage satisfaction. The lender may also be responsible for damages set out by statute for failure to timely cancel the lien. |
| What happens if there is still a balance due on the home loan after the satisfaction of mortgage is filed? | The bank can fix this mistake in the public records. |
| What happens if the lender forecloses on the property? | The lender does not have to file a satisfaction after the sale of the mortgaged property. |
What You'll Learn
What is a satisfaction of mortgage?
A satisfaction of mortgage is a document confirming that a borrower has paid off their mortgage in full. It also confirms that the mortgage is no longer a lien on the property. The document will include the names of all parties associated with the mortgage, the property address or a formal location, the original amount of the mortgage, and a statement that the debt has been satisfied.
The satisfaction of mortgage is prepared and filed by the lending institution, mortgage servicer, bank, or credit union. It must be signed by all parties to be valid. Once signed, it must be filed according to the procedures mandated by the state. In most cases, this will be filed with the county recorder, land registry office, city registrar, or recorder of deeds.
The lender must also notify the borrower that the satisfaction of mortgage has been recorded. This gives the borrower the opportunity to check that the satisfaction has been recorded correctly. The borrower should now have a clear title to the property, and the lender no longer has a lien against it.
In some cases, a lender may refuse to issue a satisfaction of mortgage. If this happens, the borrower may need to file a lawsuit against the lender to force the filing of a proper mortgage satisfaction.
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The bank's responsibilities
When a homeowner in Florida finishes paying off their mortgage, the bank has a set of responsibilities to fulfil. Firstly, the bank must prepare a 'Satisfaction of Mortgage' document, which must be in writing and signed by the lender. This document should include details such as the property address, the names of the owners and lenders, and the original mortgage amount, as well as a statement declaring that the debt has been satisfied, or paid in full.
The bank then has to file this documentation with the clerk responsible for real estate records in the county where the property is located. This is usually done by paying a small fee. The bank must act within a reasonable timeframe, typically defined as 60 days from the date of the final payment.
After filing the documentation, the bank must notify the borrower. This notice confirms that the lien on the property has been removed and that the borrower now has full legal title to the property, without any lien against it. The notice also gives the borrower the opportunity to check that the satisfaction has been recorded correctly.
In some cases, the bank may fail to fulfil its responsibilities regarding the 'Satisfaction of Mortgage'. For instance, the bank may not prepare and record the satisfaction, or there may be errors in the documentation. In these instances, the homeowner may need to take legal action. Florida law provides for the payment of the homeowner's legal fees by the bank if the bank is at fault. However, it is recommended that homeowners seek advice from a real estate lawyer to understand their rights and options.
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The borrower's rights
When it comes to paying off your mortgage, you have rights regarding how your servicer manages your account. It is important to review all letters, emails, and statements from your mortgage servicer and keep records of your payments and correspondence.
In the state of Florida, the borrower has rights in the event that the bank fails to record a satisfaction of mortgage. The borrower has the right to file a lawsuit against the lender to force the filing of a proper mortgage satisfaction. The law provides for the payment of attorney fees if the lender fails to issue and record a satisfaction, and the homeowner will not have to pay the lawyer unless the case is won.
The mortgage satisfaction document must be prepared by the lender and identify the property, the owners, the lenders, and the original mortgage amount. It must also state that the debt has been paid in full and be recorded with the county records department. The lender must then notify the borrower that the mortgage satisfaction has been recorded, confirming that the borrower now has full legal title to the property without any lien against it. This must be done within sixty days of the full payoff of the mortgage.
If a borrower receives notice that a mortgage has been satisfied, but there is still a balance due, then an error has been made. In this case, the bank can fix the mistake in the public records, and the borrower will not get a windfall.
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Lender fails to record satisfaction
If your lender fails to record a satisfaction of mortgage, you may need to take legal action. Under Florida Statute 701.04, lenders are required to file a written and notarized satisfaction of mortgage document with the clerk in the county where the property is located. They must do this within 60 days of the final loan payment being made.
If your lender fails to do this, you may need to file a lawsuit to force the filing of a proper mortgage satisfaction. You will need to speak with an experienced Florida real estate lawyer to learn your rights. The law provides for the payment of attorney fees if the lender fails to issue and record a satisfaction, so in many instances, you will not have to pay any money to the lawyer unless they win the case.
If you have made the final payment on your loan but your lender does not record your mortgage satisfaction and still has a lien against your property, you could encounter serious problems. You may, for example, be threatened with foreclosure. You could also encounter problems selling your home if there is still a lien against the title.
If you are facing either of these complex situations because of an error by your lender, consider getting the help of an experienced mortgage satisfaction lawyer.
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What to do if the lender refuses to issue a satisfaction of mortgage
If your lender refuses to issue a satisfaction of mortgage within the timeframe prescribed by Florida real estate law, it is recommended that you speak with a real estate lawyer to learn about your rights and the next steps you can take. Here are some important things to know and consider:
Understanding Your Rights:
- Under Florida law, once you have paid off your mortgage, the lender must provide documentation showing that the lien on your property has been removed. This is called a "satisfaction of mortgage" and it needs to be recorded in the public records.
- Florida Statute 701.04 outlines the steps a lender must take to cancel mortgages, liens, and judgments. The lender has to act within a reasonable time, typically defined as 60 days from the date of the final payment.
- The lender must prepare the mortgage satisfaction document, which includes property details, owner and lender information, and the original mortgage amount. It should also state that the debt has been paid in full.
- The lender is responsible for recording this satisfaction of mortgage with the proper county records department, paying any associated fees, and notifying you, the borrower, that the mortgage satisfaction has been recorded.
Taking Action:
- Consult a real estate lawyer: Speak with an experienced Florida real estate lawyer who can advise you of your rights and guide you through the legal process. In many cases, the lender may be responsible for covering your attorney fees if they are found to be at fault.
- File a lawsuit: If your lender fails to execute and record a satisfaction of mortgage within the mandated timeframe, you may need to file a lawsuit. This can involve seeking a court order directing the lender to execute a satisfaction of mortgage and extinguish the lien against your property.
- Pursue a quiet title action: This type of lawsuit is specifically designed to clear any encumbrances or "clouds" from your property's title, ensuring that you have clear and marketable title to your property.
- Follow up and confirm: While it is the lender's responsibility to prepare and file the satisfaction of mortgage, it is in your best interest to follow up and confirm that it has been recorded promptly. This can help avoid potential costs and delays in the future, especially if you plan to refinance or sell your property.
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Frequently asked questions
A satisfaction of mortgage is a document signed by your lender that states you have fully paid off your mortgage and that the mortgage is no longer a lien on the property.
The lender must prepare the mortgage satisfaction document that identifies the property, its owners, lenders, and the original amount of the mortgage. It must also state that the debt has been paid in full. The lender must then record the mortgage satisfaction with the proper county records department and pay a small fee.
The lender must comply with Florida Statute 701.04 within 60 days from the date of the last or full payment.
If the lender fails to record a satisfaction within the set time limit, the lender may be responsible for damages set out by statute for failure to timely cancel the lien. The borrower has the right to file a lawsuit against the lender to force the filing of a proper mortgage satisfaction.
Under Florida law, the lender does not have to file a Satisfaction after the sale of mortgaged property pursuant to a final judgment of foreclosure. The third-party buyer at the foreclosure sale gets a clear title, but the defaulting homeowner does not get documentation to suggest that the debt has been paid.
