Can’t Get No Satisfaction (Part Two)
Photo by Michael Mulligan
In my last post, “Can’t Get No Satisfaction (Part One),” we examined the legal effect of an unsatisfied mortgage. This post will address one commonly used solution to an unsatisfied mortgage, as well as the penalties a lender faces under South Carolina law for failure to satisfy a mortgage once full payment has been made.
First, if there’s no satisfaction recorded, you should contact the prior closing attorney. If the attorney paid off the mortgage at closing, the attorney may issue an “Attorney Satisfaction.” See S.C. Code Ann. §29-30-330. When the Attorney Satisfaction is recorded, it has the same legal effect as if the lender recorded the satisfaction; that is, title is rendered marketable.
Second, South Carolina law has a stiff penalty for lenders who fail to issue a satisfaction once the mortgage note is paid in full and the borrower has made a valid request for the satisfaction. If the lender fails to satisfy the mortgage within three months of a valid request, the lender must pay the borrower either $25,000 or one-half of the mortgage note amount, whichever is less, along with any other damages, costs, and attorney’s fees. See S.C. Code Ann. §29-3-320.
The South Carolina Supreme Court recently outlined the process of triggering the lender’s liability in Dykeman v. Wells Fargo Home Mortg., Inc. (S.C. 2009) 2009 WL 294745. The Court held that for the penalty to apply, a borrower must show: “(1) that he has made full payment of his debts, including any applicable damages, costs, and charges, (2) that he has made a ‘request by certified mail or other form of delivery’ that the mortgage be satisfied of record, (3) that he has made a ‘tender of fees of office for entering satisfaction,’ and (4) that the mortgagee has failed to ‘enter satisfaction in the proper office on the mortgage’ within three months of the request.” The request for satisfaction has no standard format, and need only convey an “affirmative desire” on the part of the borrower to have the mortgage satisfied. The fee required to record a mortgage satisfaction in South Carolina is $5.
–Russ DeMott
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