Releasing a mortgage lien

A lien is a legal claim against property that must be satisfied when the property is sold. The lien provides notice that the bank has a secured interest in the property and guarantees the bank that the property cannot be sold or transferred without either the loan being repaid or assumed.

Here are some commonly asked questions about mortgage lien releases.

How does a lien get released?

When a bank loan is paid off, a Release of Lien or Certificate of Satisfaction is provided by the bank and is recorded in the Land Records office to provide notice that the prior lien has now been paid in full and released from the property.

When I refinance, what is the lien release process?

In a refinance, the title company handles paying off the bank and is responsible for following up to make sure that the lien has been released.  Most title companies charge either a lien release fee, or include the fee as part of the settlement fee.

What about when I sell my house?

The same thing is true when a property is being sold.  The title company is responsible for handling the release since it has provided a commitment to the bank that the prior loan will be paid and released.

I just paid off my loan by writing a check; do I need to do anything else?

Yes, you need to make sure that the lien has been released.  Either the lender will send the release to the county or city Land Records office on your behalf and forward you the recorded release, or they will send you the recorded release, which you will then have to record.

I have an equity line with a zero balance.  Does that need to be released?

Just because your equity line has a zero balance does not mean that it has been released from the property.  You need to request for the account to be closed and for a release to be sent to you.

Comments (16)

  • webmaster

    webmaster

    20 February 2014 at 17:15 | #

    Hi Melissa: To answer your question properly, we would need to review the title to the property and speak to the lender. I would suggest that you speak to an attorney about the matter.

    reply

  • Mark

    Mark

    13 March 2015 at 09:15 | #

    Local DA's won't prosecute banks for filing of false documents. So...we are filing our own lien releases into the county records just like the banks file false assignments of mortgages. If the banks complain of our filings then we can point out their filings also.

    reply

  • David

    David

    18 May 2015 at 10:38 | #

    Original leinholder sold its rights to debt on my property to a third party.
    They then resold the note to another party. When the original lender sold the note, they failed to file a release of lien. They no longer have a financial interest in the property. Is there a standard way to force them to release the lien, and can I handle this through small claims court if they do not respond? Note value is about 3k. This is a Texas property.

    reply

  • Saj

    Saj

    29 May 2015 at 08:34 | #

    The title company wants in addition to lien release that work performed was paid and no liens , they also want all the invoices that were paid

    reply

  • Janet

    Janet

    05 December 2015 at 10:38 | #

    IF I refinance my 30 yr loan into a 15 yr loan with the same finance company -

    would they file a release of lien to the County Clerk's Office?

    Or does this mean the home was paid off and a new second mortgage established?

    reply

    • webmaster

      webmaster

      10 December 2015 at 11:16 | #

      Hi Janet, Yes and yes. It means that the current loan would be paid off, the payoff lender would need to file a release and a new second mortgage would be established. Thanks for your question!

      reply

  • Shannon rogers

    Shannon rogers

    22 December 2015 at 23:11 | #

    When we refinanced our home for the second time, the new mortgage company that we have been paying did not have the lien on our home. Now we are stuck with a home we cannot refinance or sell. We have not made a payment since 2012. Is there anything that can be done?

    reply

    • webmaster

      webmaster

      29 December 2015 at 10:55 | #

      Shannon, thanks for your question. The title company handling the sale or refinance of your property should be able to help in obtaining a release or offering a solution to the problem. I would suggest you contact a local title company to see if they are able to assist.

      reply

  • Greg

    Greg

    12 February 2016 at 09:02 | #

    Received a notice from bank that a Satisfaction of Mortgage has been submitted for a HELOC that was paid in full 7 years ago. Do we have any recourse under Georgia Code Section 44-14-3 for liquidated damages because it wasn't filed 7 years ago?

    reply

  • Mary Harmon

    Mary Harmon

    22 March 2016 at 20:50 | #

    My mortgage was paid off in 2000 but the mortgage company never sent the release of my lein. The company is now out of business. How can I get the lein released?

    reply

    • webmaster

      webmaster

      23 March 2016 at 12:32 | #

      Hi Mary, believe it or not this kind of thing happens from time to time. Joe, who authored this article, answered your question in an piece written for Washington Post last year:

      Obtain proof that the loan was paid off, then call the last known servicer of the loan in order to request a release. This can become tricky if the loan was paid off a long time ago, since the loan servicer at the time of payoff might have been merged into several other banks, but eventually, you should be able to determine who took over the records and can provide a release.

      Click over to the Post's website for more information about unreleased liens, and contact us if we can be of more help. https://www.washingtonpost.com/news/where-we-live/wp/2015/01/26/title-problems-can-snag-your-closing/

      reply

  • Grace Rusli

    Grace Rusli

    26 April 2016 at 10:56 | #

    We are the 4th lien holder in a property and trying to foreclose on the property. The first lien and the second lien is exactly the same amount so we believe the first lien should have been released. The mortgage company went out of business so it looks like the loan was sold to another mortgage company which also went out of business. When I called the number of the last mortgage company I got connected to a different mortgage company or more of a collector. I am not sure where to go to find out about the first lien especially because we are not the owner of the property. Fyi, the property is in CA. Thanks.

    reply

  • Wendy

    Wendy

    02 June 2016 at 15:07 | #

    About a year ago I contacted my mortgage company about my foreclosure. The foreclosure started in 2008. I was told that they were writing it off as an unsecured debt and releasing the lien. What does this really mean? I am still the owner of record and responsible for all the back taxes. I abandoned the property when they told me it was going to sheriff sale. Am I still responsible for the mortgage if they released the lien?

    reply

  • Cynthia

    Cynthia

    22 June 2016 at 16:44 | #

    Hello, I wish you can help me. I made two refinance loans with Lend America, who is now defunct, not in business, and I need Certificate of Satisfaction for both loans. Where do I go to get that information?
    Thank you,
    Cynthia

    reply

    • webmaster

      webmaster

      27 June 2016 at 12:13 | #

      Cynthia, thanks for your question. Obtaining your Certificate of Satisfaction may require a bit of legwork. It sounds like your defunct loan-servicer was probably absorbed by another loan-servicer. If you know who that servicer is, contact them. You may have to make a few calls because if the loan was paid off a long time ago, the loan-servicer at the time of payoff might have been merged into several other banks by now. But eventually, you should be able to determine who took over the records and can provide a release. You may also want to reach out to the title company that assisted with your closing to see if they can provide more clues.

      reply

  • Patrick Mulligan

    Patrick Mulligan

    06 October 2016 at 12:38 | #

    I am currently in the process of refinancing my home. My current mortgage company added a refinance fee and a mortgage release fee into the payoff quote. This just doesn't sound right to me. Isn't charging a fee to payoff a loan early illegal?

    reply

Leave a comment

You are commenting as guest.
  • Ways to save at closing

    Title charges are the largest chunk of closing costs and can vary by hundreds of dollars.

    Learn more

  • What are closing costs?

    The real estate closing process involves loan steps, legal steps and title steps.

    Learn more

  • What's title insurance?

    Insure your legal ownership just like you'd insure the building, but for lots cheaper.

    Learn more

Connect with us


Our blog contains general information only, not intended to be relied upon as, nor a substitute for, specific professional advice. Rate tables and figures that appear on our blog are deemed reliable but not guaranteed. For current rates & policies, refer to our Quick Quote and Consumer Guide. We accept no responsibility for loss occasioned to any purpose acting on or refraining from action as a result of any material on our blog.