Executing a Mortgage Satisfaction in NY

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The following blog is part of our New York team's "To the Point" title insurance news blog series. Learn more about the series via our New York Metro or Upstate New York markets.

A mortgage satisfaction is a document that certifies the full repayment of a mortgage loan and releases the lien on the real property. It is essential to ensure that the proper party executes this instrument to guarantee the validity and enforceability of the satisfaction.

In New York, the relevant statutes governing the execution of mortgage satisfactions are found in the New York Real Property Law (RPL) and the New York Real Property Actions and Proceedings Law (RPAPL).

Section 275 of the RPL provides for the discharge of a mortgage when it has been paid in full. Under section 275(1), when the debt secured by a mortgage is paid, the holder of the mortgage is required to give a certificate of discharge, also called a satisfaction, to the borrower, and arrange for it to be recorded. Except for certain persons and entities that make less than five mortgage loans in any calendar year, or certain agencies or instrumentalities of the state, 275(1) also requires the person executing the satisfaction to present same to the appropriate recording office within 30 days or be subject to monetary penalties.

As to who has authority to execute the satisfaction and what it should contain, see RPL Section 321 (to be discussed in more detail below).

Section 1921 of the RPAPL establishes an alternate remedy to the borrower for obtaining a satisfaction after full payment has been made, and requires a showing of willful, unjustifiable refusal on the part of the mortgagee to satisfy the mortgage.

RPL § 321 is a good read for real estate practitioners. At a minimum, the satisfaction must be signed, properly acknowledged, and state that the mortgage has been paid or otherwise satisfied and may be discharged of record. All instruments relating to the original mortgage must be recited within the satisfaction piece with full party names and recording details, and the satisfaction must state that the mortgage has not been [further] assigned of record.

Questions often arise when the mortgage is held by a non-institutional lender having multiple holders or trustees, and one party is deceased or incapacitated. RPL § 321 details how to proceed, but it is very much dependent on how the loan documents are drafted.

Of particular focus are subsections 1(c), 1(f), and 5 of RPL § 321:

The within is a general overview of the legal requirements in New York and should not be construed as legal advice. It is recommended to consult with a qualified attorney to address specific circumstances and to ensure compliance with statute, insurability, and recording.