District of Columbia Assignment and Satisfaction of Mortgage Law

Real Property – Mortgage Satisfaction – District of Columbia

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.

District of Columbia Law

Assignment: An assignment must be in writing and recorded.

Demand to Satisfy: Following full payoff, the borrower may demand satisfaction by written request to the lender, who then has 30 days to record satisfaction of the deed of trust.

Recording Satisfaction: A deed of trust may be released as a lien on the real property described therein by recording a certificate of satisfaction executed by the beneficiary- mortgagee, or by satisfaction on the face of the mortgage document combined with an affidavit.

Marginal Satisfaction: Allowed as means of satisfaction, provided that an affidavit is included therewith.

Penalty: If holder’s failure to record satisfaction continues for more than 30 days after the holder receives a written request from the person entitled to the release, then holder shall pay to the person a penalty in the amount of $50 per day, shall be liable to such person for all actual and consequential damages, and shall pay all costs and expenses, including reasonable attorneys fees and disbursements, relating to or arising out of the enforcement of such person’s rights.

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

District of Columbia Statutes

District of Columbia Code § 45-718.2. Procedures for release of deed of trust.

(a) For purposes of this section, the term:

(1) “Ancillary security instrument” means an assignment of leases with respect to the real property described in a deed of trust, an assignment of rents from or arising out of the real property described in a deed of trust, a financing statement filed in the financing statement records in the Office of the Recorder of Deeds of the District of Columbia with respect to fixtures on real property described in a deed of trust, and any other document or instrument that assigns, or creates a lien on, an interest in the real property described in a deed of trust as security for a promissory note.

(2) “Deed of trust” means a mortgage or a deed of trust encumbering real property located in the District of Columbia as the same may be modified, amended, supplemented, or restated.

(3) “Land records” means the land records in the Office of the Recorder of Deeds of the District of Columbia.

(4) “Promissory note” means a promissory note or other written evidence of indebtedness or obligation secured by a deed of trust.

(b)(1) Except as otherwise provided in paragraph (2) of this subsection, if (i) a deed of trust is not released as a lien on the real property described therein within a period of 12 years after the maturity date of the obligation secured by the deed of trust, or (ii) no determinable maturity date is recited in the deed of trust and 35 years have elapsed since the date of recordation of the deed of trust among the land records (or, if the deed of trust has been modified or extended, the last recorded modification or extension), then the promissory note secured by the deed of trust shall be deemed conclusively to have been paid and satisfied. The deed of trust shall, without any action on the part of the owner or other person having an interest in the real property described in the deed of trust, be deemed to have been automatically released as of the last day of the period referred to in clause (i) or (ii) of this paragraph, as the case may be, and the deed of trust shall no longer constitute a lien on, or be enforceable against, the real property described therein.

(2) Paragraph (1) of this subsection shall not apply if:

(A) A Notice of Foreclosure with respect to a deed of trust has been recorded among the land records within 60 days before the expiration of the applicable time period referred to in (i) or (ii) of paragraph (1) of this subsection, or (ii) as of the last day of the applicable time period referred to in clause (i) or (ii) of paragraph (1) of this subsection, a proceeding to enforce the lien of a deed of trust is pending in a court of competent jurisdiction.

(c) A deed of trust may be validly released as a lien on real property in the District of Columbia by any one of the following means:

(1)(A) A deed of trust securing a lost, misplaced or destroyed promissory note which has been fully paid and satisfied may be released as a lien on the real property described therein by recording an affidavit among the Land Records. The affidavit, which shall be executed by the holder of the lost, misplaced or destroyed promissory note, or by the trustee or trustees named in the original deed of trust or subsequently appointed by a recorded instrument of substitution, shall state that (i) the promissory note has been fully paid and satisfied, (ii) the original promissory note has been lost, misplaced, or destroyed and, if the affiant is the holder of the promissory note, neither the promissory note nor any interest therein has been transferred, assigned, or negotiated to any other person, (iii) the affiant has been unable to locate the promissory note despite a diligent search, and (iv) the affiant release the deed of trust identified by recording reference, as a lien on the real property described in the deed of trust.

(B) The affidavit shall fully identify the real property encumbered by, the parties to, the date of, and the recording reference for, the deed of trust being released. The recordation of the affidavit shall be effective to release the deed of trust as a lien on the real property described therein with the same effect as a release recorded pursuant to paragraph (3) of this subsection.

(2)(A) A deed of trust may be released as a lien on the real property described therein by recording the original promissory note, marked “paid” or “canceled” on its face by the holder, among the land records with an attached affidavit executed by the holder, or by an officer of the title insurance company or validly licensed title insurance agent which disbursed funds in payment of the promissory note, stating that the promissory note has been fully paid or satisfied and releasing the deed of trust as a lien on the real property described in the deed of trust.

(B) The affidavit shall fully identify the real property encumbered by, the parties to, the date of, and the recording reference for, the deed of trust being released. The recordation of the original promissory note with the required affidavit attached shall be effective to release the deed of trust as a lien on the real property with the same effect as a release recorded pursuant to paragraph (3) of this subsection.

(3) A deed of trust may be released as a lien on the real property described therein by recording a certificate of satisfaction executed by the beneficiary, mortgagee, assignee, or trustee fully identifying the real property encumbered by, the parties to, the date of, and the recording reference for, the deed of trust being released, and stating that the deed of trust is released as a lien on the real property described therein, or, if the deed of trust is being released as a lien on less than all of the real property described therein, describing the part of the real property then being released.

(d) A certificate of satisfaction shall comply with the requirements of subsection (c)(3) of this section, shall be acknowledged in the manner required for the acknowledgment of a deed, and shall be in the following form:

CERTIFICATION OF SATISFACTION
KNOW ALL BY THESE PRESENTS: That (name, title)
, representing (beneficiary)
, does hereby certify and acknowledge, under penalties of perjury, that the promissory note or other evidence of indebtedness secured by that certain mortgage/deed of trust made by ________________________________________ to ________________________________________, mortgage/trustee(s), dated __________________ and recorded __________________ as Instrument No. ____________ among the Land Records of the District of Columbia, which encumbers the real property described in Exhibit A attached hereto, has been fully paid and satisfied and that ________________________________________ was, at the time of satisfaction, the holder of the promissory note or other evidence of indebtedness and that the lien of the said mortgage/deed of trust is hereby released. The property encumbered by said mortgage/deed of trust is described as follows: WITNESS the hand and seal of the party making this certification this ____________ day of __________________, ____________. ________________________________________ (ACKNOWLEDGMENT) (e) (1) If a promissory note is paid or satisfied in full, the holder shall, within 30 days after receipt of such payment or within 30 days after such satisfaction, execute, acknowledge, and deliver, or cause to be executed, acknowledged and delivered, to the person making such payment or causing such promissory note to be satisfied, one or more of the documents, instruments and affidavits, in one of the forms permitted by subsection (c) of this section, sufficient to release the deed of trust securing such promissory note as a lien against the real property described in the deed of trust. (2) If a promissory note is paid or satisfied in part, and if by the terms of the promissory note, the deed of trust securing the promissory note or a separate agreement between the parties, the person making such partial payment or causing such partial satisfaction to be made is entitled to a release of a part of the real property encumbered by the lien of the deed of trust, the holder of the promissory note shall comply with the provisions of subsection (c)(3) of this section in the same manner as if the promissory note were paid or satisfied in full, except that the release shall apply only to the part of the real property encumbered by the lien of the deed of trust which the holder is obligated, by the terms of the promissory note, the deed of trust or the separate agreement, to release on account of such partial payment or satisfaction. (3) If a holder of a promissory note secured by a deed of trust fails to execute, acknowledge, and deliver, or cause to be executed, acknowledged, and delivered, the documents, instruments, or affidavits required to release the deed of trust, in whole or in part, within the time, and in the manner, required by paragraph (1) or (2) of this subsection, and if the holder’s failure continues for more than 30 days after the holder receives a written request therefor from the person entitled to the release or such person’s agent, then holder shall pay to the person entitled to the release a penalty in the amount of $50 per day, shall be liable to such person for all actual and consequential damages caused by the holder’s failure timely to deliver or record the full or partial release, and shall pay or reimburse such person for all costs and expenses, including reasonable attorneys fees and disbursements, relating to or arising out of the enforcement of such person’s rights under this section. The penalty of $50 per day shall be payable for the period beginning on and including the 31st day after the holder receives a written request for the release to, but not including, the day on which the holder delivers the executed and acknowledged documents, instruments or affidavits required to release the deed of trust. (4) For purposes of this subsection, (i) a payment in the form of an electronic transfer of immediately available funds to an account in a commercial bank, a savings bank, a savings and loan association, a credit union or a similar financial institution shall be deemed to be made when the financial institution confirms receipt of the funds to the owners of the account, (ii) a payment in the form of a check issued or certified by a national or state bank shall be deemed to be made upon receipt of the check, and (iii) payment in the form of a check that is not issued or certified by a national or state bank shall be deemed to be made on the first day on which the holder receives the proceeds of collection of such check in immediately available funds. (f) If a deed of trust is released, or deemed released, as a lien on all of the real property described therein, the release of the deed of trust shall be deemed automatically to release any ancillary security instrument that secures the same promissory note secured by the deed of trust. This provision shall not apply if the document recorded among the land records expressly states that the release of the deed of trust shall not release the ancillary security instrument.
FORM OF RELEASE AFFIDAVIT
FOR LOST, MISPLACED, OR DESTROYED PROMISSORY NOTE PER § 45-721(C)(1) [see now § 42-1101(3)(A)]:
KNOW ALL MEN BY THESE PRESENTS:
THAT I, the undersigned, hereby certify under penalties of perjury that: 1. I was the last known holder of a certain promissory note (or the trustees named in the original deed of trust or substitute trustees appointed by an instrument of substitution recorded in the land records); 2. Despite diligent search, I have been unable to locate the original promissory note which has been lost, misplaced or destroyed, (if the holder add: and neither the promissory note nor any interest therein has been transferred, assigned or negotiated to any other person); 3. The promissory note has been fully paid and satisfied; and 4. The deed of trust dated (date)
securing said promissory note granted by (grantor)
in favor of (trustee(s))
securing (grantee)
and recorded in the land records on (date)
in Liber ____________ , at Folio ____________ , as instrument no. ____________ and constituting a lien upon that piece or parcel of land located in the District of Columbia and known as: LOT ____________ in SQUARE ____________ , (additional legal description, ex. subdivision) as per plat recorded in Liber ____________ at Folio ____________ among the land records is hereby RELEASED. WITNESS the hand and seal of the undersigned [noteholder/trustee/substitute trustee]
this ____________ day of __________________, ____________ .
________________________________________ STATE/DISTRICT of ______________________________ ) ) ss: COUNTY of ________________________________________ ) I, the undersigned, a Notary Public in and for the aforesaid do hereby certify that __________________ party to and who is personally well known to me as the person who executed the foregoing Release Affidavit dated the ____________ day of __________________ , ____________ , personally appeared before me in said jurisdiction and acknowledged the same to be his/her/its act and deed. Given under my hand and seal, this ________ day of ____________ , and: My commission expires:
________________________________________ Notary Public
FORM OF RELEASE AFFIDAVIT
TO ACCOMPANY PROMISSORY NOTE § 45-721(2) [see now § 42-1101(3)(B)]:
KNOW ALL MEN BY THESE PRESENTS: THAT I, the undersigned, hereby certify under penalties of perjury that: 1. I am [the last known holder of the attached promissory note marked [“Paid” or “canceled”] or [an officer of the undersigned title insurance company] or [a validly licensed title insurance agent] which disbursed funds in payment of the promissory note; 2. the attached promissory note has been fully paid, canceled or satisfied; and 3. the deed of trust dated (date)
securing said promissory note granted by (grantor)
in favor of (trustees)
securing (grantee)
and recorded in the Land Records on (date)
in Liber ____________ , at Folio ____________ , as instrument no. ____________ and constituting a lien upon that piece or parcel of land located in the District of Columbia and known as: LOT ____________ in SQUARE ____________ , (additional legal description, ex. subdivision) as per plat recorded in Liber ____________ at Folio ____________ among the Land Records is hereby RELEASED. WITNESS the hand and seal of the undersigned [noteholder/trustee/substitute trustee]
this ____________ day of __________________, ____________. STATE/DISTRICT of ______________________________ ) ) ss: COUNTY of ________________________________________ ) I, the undersigned, a Notary Public in and for the aforesaid do hereby certify that ________________________________________ party to and who is personally well known to me as the person who executed the foregoing Release Affidavit dated the ____________ day of __________________ , ____________ , personally appeared before me in said jurisdiction and acknowledged the same to be his/her/its act and deed. Given under my hand and seal, this ____________ day of __________________, and: My commission expires:
________________________________________ Notary Public.


Inside District of Columbia Assignment and Satisfaction of Mortgage Law