Can’t Get No Satisfaction (Part One)

You’re headed toward the finish line.  The goal: closing.  You’ve taken all the precautions, done all the leg work.  Maybe it’s your first closing, so you’ve got your helmet on and your training wheels attached.  You’re moving right along.  Then it happens: there’s a missing mortgage satisfaction.  A Big Fat Title Defect.       

I confess that whenever I hear my staff say “we’re missing a satisfaction,” I just can’t help but think of Mick Jagger’s song “(Can’t Get No) Satisfaction.” 

When I’m drivin’ in my car
and a man comes on the radio
he’s tellin’ me more and more
about some useless information
supposed to fire my imagination.
I can’t get no, oh no no no.
Hey hey hey, that’s what I say.

I’m also reminded of my mother’s frequent rebuke to me for using double negatives.  “Can’t get no” is a double negative that my mother-a school teacher-hated.  Mom wouldn’t appreciate Mick Jagger’s poetic license with the English language.  

Why is a missing mortgage satisfaction a problem?  Because the mortgage is a lien on the property until it’s satisfied.  It follows the property.  This means that if Jones owes a mortgage on the property at the time he sells to Smith, Smith now owns property with that same mortgage on it.  And if the mortgage is not paid, the lender can foreclose on Smith’s property, even though Smith is not personally liable for the underlying debt.  Clearly, Smith did not acquire marketable title to the property.  (See my prior post on Insurable and Marketable Title.)  So if we find a mortgage on the seller’s property, we need to find a corresponding satisfaction to ensure that the buyer isn’t buying property with a huge title defect.  Just like biscuits and gravy, mortgages and satisfactions go together. 

Under South Carolina law, a mortgage continues to be a lien on real estate for 20 years beyond the maturity date stated in the mortgage.  For example, if a 30-year mortgage were granted in 1963, it would mature in 1993, and would continue to be a lien on the property until 2013 (unless it were satisfied or otherwise canceled before then).  If there is no maturity date stated, the mortgage only continues to be a lien for 20 years from the date the mortgage was granted.   

 In part two, we’ll examine some solutions resolving situations in which an unsatisfied mortgage remains a lien on the property. 

 –Russ DeMott

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