Posted by Art_MD on 9/21/06 9:03pm
Msg #147635

a new form - Affidavit as to unsatisfied mortgage ??

Although we like closings to go smoothly, if is a change when you come across a new and unique( to me) situation.

I've never run into an "affidavit as to unsatisfied mortgage".
Anyone experienced with this form and what it means?


Borrower is doing a refi.
The form says that there is an unsatisfied mortgage encumbering the title.
The borrower is to state if the mortgage was paid and when.
The borrower is to state that he has made a diligent search to find the satisfaction and cannot.
The borrower is to acknowledge that the title company is omitting the mortgeage as an exception to title under the policy being issued solely "for mortgage purposes only"
Also, the borrower agrees he has no recourse against the title company in any way regarding clearing title or anything in any way regarding this unsatisfied mortgage.

Briefly, what I found out..

Mr & Mrs Jones owned the property (3 lots) in 1970.
Mr Brown bought in 1973.
Mr White bought in 1983. He had an owners title policy.
Mr White combined the 3 lots into 2 lots in 1990.
One of the combined lots sold to Mr. Green (son of Mr White) in 2003.
He got a mortgage with no problems. Same title company as his father.

The mortgage shown on latest title search is in the name of MR & Mrs Jones. It didn't show up as outstanding on 2 title seaches, then shows up.

Going to be interesting how this is going to resolve.

Any thoughts, anyone ever run into a similar situation?

Reply by MelissaM_FL on 9/21/06 9:08pm
Msg #147637

I've run into this Affidavit quite a few times while working for a real estate attorney. Basically, the affidavit protects the title company if someone comes back later and tries to enforce the original Note. We also often used it when a bank would claim they had recorded a satisfaction of mortgage, yet there was no public record of the satisfaction. It was often in lieu of making the transaction wait for the bank to research the original satisfaction, which might take forever.

Reply by Becca_FL on 9/21/06 11:55pm
Msg #147670

Yep Art, just like Melissa said this is not a new doc just a "not widely used" doc. when title comes across a lien that they can not show to be “satisfied" through the public record, they will make certain exceptions. The doc you describe is used to cover the TC against clams that the "now" owner might bring due to the possible encumbrance of the property by the open mtg. in the public records.

BTW, did you know that Abraham Lincoln's parents lost their homestead twice due to unsatisfied encumbrances?

Reply by BobbiCT on 9/22/06 10:33am
Msg #147755

Affidavit re unRELEASED Mortgage -around a long time

In CT for at least 15 years I have seen these, both working for attorneys to obtain the necessary documentation, certification and drafting required and when I perform title abstracts for attorneys.

In CT these Affidavits are prepared by a CT attorney following statutory law. They are done by an attorney because If It is Done Wrong it is Worth Less than the sheets of paper it is prepared on. An unreleased mortgage, even if paid, is a "cloud" on title. In other words, prepare the Affidavit wrong the first time and the owners will be paying for an attorney to fix it a second time ... or a third time - which can take weeks or months, cost more than you want to pay, and Not what you want to find out you must have a few business days before you refinance or sell your house.

Go with the flow - perform the jurat. This is legal territory and we, as notaries public and non-attorneys, do not need the liability or want to make any comment on this form.

I am not an attorney; this is not a legal opinion or advice; each state is different, so this FYI may not apply in your state.

Reply by Arthur Walsh on 9/22/06 5:01pm
Msg #147876

Re: Affidavit re unRELEASED Mortgage -...

I worried a bit because in MD, we are the title insurance producer at the closing representing the title insurance underwriter. I don't like not knowing what I'm getting signed when I may have some legal responsibility.

Reply by sue_pa on 9/22/06 11:40am
Msg #147794

back 'in the day' lenders mailed the Satisfaction Piece to the mortgagor when the loan was paid off. They were to take it to the court house themselves for filing. Naturally, this didn't happen every time. That is one reason for an unsatisfied mortgage. Another is that the lender for some reason just didn't get a satisfaction filed. Now, the lender has disappeared (bought up by another entity, gone out of business, etc), loan was sold, etc., and no one can find anyone to release the lien.