Satisfaction of Mortgage

What Is a Satisfaction of Mortgage?

A satisfaction of mortgage is a recorded document that confirms a mortgage has been paid in full and the lender's lien has been released. Until a satisfaction is recorded, the mortgage continues to appear as an open encumbrance on the property, even if the debt has been completely paid. This can prevent a future sale or refinance because the title search will show the lien as outstanding.

Florida Legal Requirements

Florida law imposes strict requirements on lenders to record satisfactions promptly:

• Section 701.04, Florida Statutes requires the lender (mortgagee) to execute and record a satisfaction of mortgage within 60 days of receiving full payment.
• If the lender fails to record the satisfaction within 60 days, the borrower can send a written demand. The lender then has 30 additional days to comply.
• A lender who fails to record a satisfaction after the demand is liable for $500 in damages plus the borrower's actual damages, court costs, and attorney fees.

The satisfaction must identify the original mortgage by recording information (book and page number or instrument number), the parties, and the property. It must be signed, notarized, and recorded with the clerk of the circuit court in the county where the property is located.

Why Unreleased Mortgages Are a Problem

An unreleased mortgage is one of the most common title defects in Florida real estate. It creates a cloud on title because anyone searching the records sees what appears to be an active lien. Common scenarios include:

• A mortgage was paid off during a refinance, but the old lender never recorded the satisfaction.
• A mortgage from a lender that has since been acquired, merged, or gone out of business, and the successor never recorded the release.
• A home equity line of credit (HELOC) was paid to a zero balance but never formally closed and released.

Resolving an unreleased mortgage can delay closing while the title company tracks down the current holder of the note and obtains the satisfaction.

Related Terms

• Mortgage — The lien that the satisfaction releases
• Cloud on Title — What an unreleased mortgage creates
• Clear Title — Requires all mortgage satisfactions to be recorded
• Title Search — Where unreleased mortgages are discovered
• Encumbrance — An open mortgage is a financial encumbrance

How Barnes Walker Handles Mortgage Satisfactions

Barnes Walker Title obtains mortgage payoff letters, coordinates payoff disbursement at closing, and monitors for the recording of satisfactions on every transaction. When an old mortgage satisfaction is missing, the firm's attorneys track down the current note holder and obtain the release. Submit a title inquiry for assistance.

Reviewed by the attorneys at Barnes Walker, Goethe, Shea & Robinson, PLLC