How Long to Satisfy a Paid Off Mortgage?
We have helped 3 different clients over the last week to eliminate mortgages and other liens from the public records. In each of the these situations, the loans were satisfied, but the lien holders (lenders / banks) failed to record a satisfaction or release. Of course, we didn’t know this until after we filed suit, which is unfortunate and would have saved our client, and the lender unnecessary time and expense.
The basis of our argument can be found in Florida Statute 701.04 which provides:
(1) Within 14 days after receipt of the written request of a mortgagor, a record title owner of the property … the holder of the mortgage shall delivery or shall cause the servicer of the mortgage to deliver … an estoppel letter setting forth the unpaid balance of the loan secured by the mortgage.
(1)(b)3. The mortgagee or servicer of the mortgagee acting in accordance with a request in substantial compliance with this paragraph is expressly discharged from any obligation or liability to any person on account of the release of the requested information, other than the obligation to comply with the terms of the estoppel letter.
(2) … Within 60 days after the date of receipt of the full payment of the mortgage, lien, or judgment, the person required to acknowledge satisfaction of the mortgage, lien or judgment shall send or cause to be sent the recorded satisfaction to the person who has made the full payment.
In the first case that we handled, our client bought property at the foreclosure auction conducted by the homeowner’s association. When she acquired the property, she found an unsatisfied line of credit recorded against the property. She requested a pay off statement and never received one. We then sent a letter citing 701.04(1) and (1)(b)3. We received no response. We then filed a lawsuit, which got the bank’s attention, who let me know the loan was satisfied years earlier. Based on the bank’s non-compliance with Section 701.04, we requested the immediate satisfaction and the payment of attorney fees and costs. The bank agreed and our client now owns the property free and clear of any liens!
In the second case, our client had to re-foreclose because of the foreclosing attorney’s accidental omission of a UCC lien (Uniform Commercial Code Lien, for personal property as opposed to a mortgage, which is a lien on real estate) from the foreclosure lawsuit. Upon receipt of our re-foreclosure lawsuit, the UCC company informed us that the lien was paid years earlier and they filed the UCC-3 Termination in the public records.
The last of our examples is also a re-foreclosure situation, this time the omitted lien holder was a restitution lien filed by the State of Florida against someone convicted of a DUI. When the State of Florida received our re-foreclosure case, they issued a satisfaction of the restitution lien.
In the first case, our client decided to pursue attorney fees and costs because of our unsuccessful efforts to have the bank voluntarily provide a pay off or status of the lien. Our results in this case may not be indicative of the results we can get in other cases, but at a minimum, we got all of these wayward liens released or satisfied so they don’t affect our clients’ properties.
If you have questions about re-foreclosure or the satisfaction of liens, please contact us to schedule a free initial consultation to discuss your options at 813-774-5737 or email me directly at firstname.lastname@example.org. Please also subscribe to the Crushing Debt Podcast, on Apple Podcasts, Spotify, and other podcast players, including Amazon Echo (“Alexa”) for more free information about these topics.
Shawn M. Yesner, Esq., is the host of the Crushing Debt Podcast and founder of Yesner Law, P.L., a Clearwater-based boutique real estate and consumer law firm that helps clients eliminate the financial bullies in their lives. We assist clients with asset protection, the sale and purchase of real property, Chapter 7 liquidation, Chapter 13 reorganization, bankruptcy, foreclosure defense, debt settlement, landlord/tenant issues, short sales, and loan modifications in Clearwater, Tampa, Westchase, Odessa, Oldsmar, Palm Harbor, Pinellas Park, Largo, St. Petersburg, and throughout the greater Tampa Bay area.