The Definition of Release of Mortgage
A release of mortgage is a document issued by a mortgage lender once a borrower has repaid a loan. It indicates that the borrower now owns the home without any further obligation to the lender.
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Features
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A typical release identifies the property in question, along with the lender and the borrower. It tells when the mortgage agreement was executed and where it is officially recorded--at a certain county recorder's office, for example. It is usually notarized, and it concludes by stating that the mortgage has been fully paid and that the mortgagor is giving up any right to make a claim on the property.
Consideration
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It's not enough simply for the lender to send the release to the borrower. When a mortgage is recorded with the county, the loan is listed as a lien against the property; a lien is a claim that must be paid before the property can be sold. Someone must notify the county that the lien has been lifted.
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Laws
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Laws vary by state as to how much time the lender has to send a release after the borrower pays off the loan, how soon the release must be recorded with the county and whose responsibility it is to notify the county. In some cases, the responsible party may be liable for damages if the release isn't officially recorded in a timely manner.
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