Real Property – Mortgage Satisfaction – Iowa
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.
Assignment: It is recommended that an assignment be in writing and recorded immediately.
Demand to Satisfy: Upon full payoff, mortgagor may request recordation of satisfaction by mortgagee, who must comply within 30 days or face liablity.
Recording Satisfaction: When the amount due on a mortgage is paid off, the mortgagee must acknowledge satisfaction thereof by execution of an instrument in writing, referring to the mortgage, and duly acknowledged and recorded.
Marginal Satisfaction: Not allowed. Separate instrument required.
Penalty: If mortgagee fails to discharge a satisfied mortgage within thirty days after a request for discharge, the mortgagee is liable to the mortgagor and the mortgagor’s heirs or assigns, for all actual damages caused by such failure, including reasonable attorney fees.
Acknowledgment: An assignment or satisfaction must contain a proper Iowa acknowledgment, or other acknowledgment approved by Statute.
655.1 Written instrument acknowledging satisfaction.
When the amount due on a mortgage is paid off, the mortgagee, the mortgagee’s personal representative or assignee, or those legally acting for the mortgagee, and in case of payment of a school fund mortgage the county auditor, must acknowledge satisfaction thereof by execution of an instrument in writing, referring to the mortgage, and duly acknowledged and recorded.
655.3 Penalty for failure to discharge.
If a mortgagee, or a mortgagee’s personal representative or assignee, upon full performance of the conditions of the mortgage, fails to discharge such mortgage within thirty days after a request for discharge, the mortgagee is liable to the mortgagor and the mortgagor’s heirs or assigns, for all actual damages caused by such failure, including reasonable attorney fees. A claim for such damages may be asserted in an action for discharge of the mortgage. If the defendant is not a resident of this state, such action may be maintained upon the expiration of thirty days after the conditions of the mortgage have been performed, without such previous request or tender.
655.5 Instrument of satisfaction.
When the judgment is paid in full, the mortgagee shall file with the clerk a satisfaction of judgment which shall release the mortgage underlying the action. A mortgagee who fails to file a satisfaction within thirty days of receiving a written request shall be subject to reasonable damages and a penalty of one hundred dollars plus reasonable attorney fees incurred by the aggrieved party, to be recovered in an action for the satisfaction by the party aggrieved.