2013 Maryland Code
REAL PROPERTY
§ 3-105 - Recording of releases of mortgages and deeds of trust

§3-105.

(a) A mortgage or deed of trust may be released validly by any procedure enumerated in this section or § 3-105.2 of this subtitle.

(b) A release may be endorsed on the original mortgage or deed of trust by the mortgagee or his assignee, the trustee or his successor under a deed of trust, or by the holder of the debt or obligation secured by the deed of trust. The mortgage or the deed of trust, with the endorsed release, then shall be filed in the office in which the mortgage or deed of trust is recorded. The clerk shall record the release photographically, with an attachment or rider affixed to it containing the names of the parties as they appear on the original mortgage or deed of trust, together with a reference to the book and page number where the mortgage or deed of trust is recorded.

(c) At the option of the clerk of the court in whose office the book form of recording is used, the release may be written by the mortgagee, or his assignee, or the trustee, or his successor under a deed of trust, on the record in the office where the mortgage or deed of trust is recorded and attested by the clerk of the court. At the time of recording any mortgage or deed of trust, the clerk of the court in whose office the book form of recording is used shall leave a blank space at the foot of the mortgage or deed of trust for the purpose of entering such release.

(d) (1) When the debt secured by a deed of trust is paid fully or satisfied, and any bond, note, or other evidence of the total indebtedness is marked “paid” or “canceled” by the holder or his agent, it may be received by the clerk and indexed and recorded as any other instrument in the nature of a release. The marked note has the same effect as a release of the property for which it is the security, as if a release were executed by the named trustees, if there is attached to or endorsed on the note an affidavit of the holder, the party making satisfaction, or an agent of either of them, that it has been paid or satisfied, and specifically setting forth the land record reference where the original deed of trust is recorded.

(2) When the debt secured by a mortgage is paid fully or satisfied, and the original mortgage is marked “paid” or “canceled” by the mortgagee or his agent, it may be received by the clerk and indexed and recorded as any other instrument in the nature of a release. The marked mortgage has the same effect as a release of the property for which it is the security, as if a release were executed by the mortgagee, if there is attached to or endorsed on the mortgage an affidavit of the mortgagee, the mortgagor, the party making satisfaction, or the agent of any of them, that it has been paid or satisfied, and specifically setting forth the land record reference where the mortgage is recorded.

(3) When the debt secured by a mortgage or deed of trust is paid fully or satisfied, and the canceled check evidencing final payment or, if the canceled check is unavailable, a copy of the canceled check accompanied by a certificate from the institution on which the check was drawn stating that the copy is a true and genuine image of the original check is presented, it may be received by the clerk and indexed and recorded as any other instrument in the nature of a release. The canceled check or copy accompanied by the certificate has the same effect as a release of the property for which the mortgage or deed of trust is the security, as if a release were executed by the mortgagee or named trustees, if:

(i) The party making satisfaction of the mortgage or deed of trust has:

1. Allowed at least a 60-day waiting period, from the date the mortgage or deed of trust is paid fully or is satisfied, for the party satisfied to provide a release suitable for recording;

2. Sent the party satisfied a copy of this section and a notice that, unless a release is provided within 30 days, the party making satisfaction will obtain a release by utilizing the provisions of this paragraph; and

3. Following the mailing of the notice required under item 2 of this item, allowed an additional waiting period of at least 30 days for the party satisfied to provide a release suitable for recording; and

(ii) The canceled check or copy accompanied by the certificate contains the name of the party whose debt is being satisfied, the debt account number, if any, and words indicating that the check is intended as payment in full of the debt being satisfied; and

(iii) There is attached to the canceled check or copy accompanied by the certificate an affidavit made by a member of the Maryland Bar that the mortgage or deed of trust has been satisfied, that the notice required under item (i) of this paragraph has been sent, and specifically setting forth the land record reference where the original mortgage or deed of trust is recorded.

(4) When the debt secured by a mortgage or deed of trust is fully paid or satisfied and the holder or the agent of the holder of the mortgage or deed of trust note or other obligation secured by the deed of trust, or the trustee or successor trustee under the deed of trust, executes and acknowledges a certificate of satisfaction substantially in the form specified under § 4-203(d) of this article, containing the name of the debtor, holder, the authorized agent of the holder, or the trustee or successor trustee under the deed of trust, the date, and the land record recording reference of the instrument to be released, it may be received by the clerk and indexed and recorded as any other instrument in the nature of a release. The certificate of satisfaction shall have the same effect as a release executed by the holder of a mortgage or the named trustee under a deed of trust.

(5) When the holder of a mortgage or deed of trust note or other obligation secured by the deed of trust has agreed to release certain property from the lien of the mortgage or deed of trust and the holder or the agent of the holder of the mortgage or deed of trust note or other obligation secured by the deed of trust, or the trustee or successor trustee under the deed of trust executes and acknowledges a certificate of partial satisfaction or partial release substantially in the form specified under § 4-203(e) of this article, containing the name of the debtor, holder, the authorized agent of the holder, or the trustee or successor trustee under the deed of trust, the date, the land record recording reference of the instrument to be partially released, and a description of the real property being released, it may be received by the clerk and indexed and recorded as any other instrument in the nature of a partial release. The certificate of partial satisfaction or partial release shall have the same effect as a partial release executed by the holder of a mortgage, the holder of the debt secured by a deed of trust, or the named trustee under a deed of trust.

(e) A release of a mortgage or deed of trust may be made on a separate instrument if it states that the mortgagee, holder of the debt or obligation secured by the deed of trust, trustee, or assignee releases the mortgage or deed of trust and states the names of the parties to the mortgage or deed of trust and the date and recording reference of the mortgage or deed of trust to be released. In addition, any form of release that satisfies the requirements of a deed and is recorded as required by this article is sufficient.

(f) (1) A holder of a debt secured by a mortgage or deed of trust, or a successor of a holder, may release part of the collateral securing the mortgage or deed of trust by executing and acknowledging a partial release on an instrument separate from the mortgage or deed of trust.

(2) A partial release shall:

(i) Be executed and acknowledged;

(ii) Contain the names of the parties to the mortgage or deed of trust, the date, and the land record recording reference of the instrument subject to the partial release; and

(iii) Otherwise satisfy the requirements of a valid deed.

(3) The clerk of the court shall accept, index, and record, as a partial release, an instrument that complies with and is filed under this section.

(4) Unless otherwise stated in an instrument recorded among the land records, a trustee under a deed of trust may execute, acknowledge, and deliver partial releases.

(g) If a full or partial release of a mortgage or deed of trust is recorded other than at the foot of the recorded mortgage or deed of trust, the clerk shall place a reference to the book and page number or other place where the release is recorded on the recorded mortgage or deed of trust.

(h) Unless otherwise expressly provided in the release, a full or partial release that is recorded for a mortgage or deed of trust that is re-recorded, amended, modified, or otherwise altered or affected by a supplemental instrument and which cites the released mortgage or deed of trust by reference to only the original recorded mortgage, deed of trust, or supplemental instrument to the original mortgage or deed of trust, shall be effective as a full or partial release of the original mortgage or deed of trust and all supplemental instruments to the original mortgage or deed of trust.

(i) Unless otherwise expressly provided in the release, a full or partial release that is recorded for a mortgage or deed of trust, or for any re-recording, amendment, modification, or supplemental instrument to the mortgage or deed of trust shall terminate or partially release any related financing statements, but only to the extent that the financing statements describe fixtures that are part of the collateral described in the full or partial release.

§ 3-105 - 1. Releases of mortgages and deeds of trust for certain loans

(a) Definitions. --

(1) In this section the following words have the meanings indicated.

(2) "Borrower" means an individual who is mortgagor or grantor on a mortgage or deed of trust and whose loan was for personal, household, or family purposes or for a commercial purpose not in excess of $ 75,000.

(3) (i) "Holder" means the person to whom a loan secured by a mortgage or deed of trust is owed or that person's designee.

(ii) "Holder" does not include a responsible person.

(4) "Loan" means all indebtedness and other obligations of a borrower secured by a mortgage or deed of trust.

(5) "Mortgage or deed of trust" means a mortgage, deed of trust, security agreement, or other lien secured by a borrower's principal dwelling.

(6) (i) "Responsible person" means a person other than the holder or the holder's designee who has undertaken responsibility for filing a release of a mortgage or deed of trust with the governmental agency charged with recording the release.

(ii) "Responsible person" includes:

1. The person responsible for the disbursement of funds in connection with the grant of title to the property; and

2. An attorney or other person responsible for preparing the HUD-1 settlement statement required under the federal Real Estate Settlement Procedures Act.

(b) Applicability. --

(1) Except as provided in paragraph (2) of this subsection, this section does not apply to a mortgage or deed of trust given to secure or guaranty a commercial loan as defined in § 12-101 of the Commercial Law Article.

(2) This section applies to a mortgage or deed of trust given by an individual to secure a commercial loan to that individual if the commercial loan was not in excess of $ 75,000 and was secured by the borrower's principal dwelling.

(c) Procedure for release. -- Within a reasonable time after a loan secured by an existing mortgage or deed of trust has been paid in full and there is no further commitment by the holder to make an advance or by the borrower to incur an obligation secured by that mortgage or deed of trust, the holder shall:

(1) (i) Indelibly mark with the word "paid" or "canceled" and return to the borrower each agreement, note, or other evidence of the loan secured by that mortgage or deed of trust; or

(ii) Furnish the borrower with a written statement that identifies the loan secured by that mortgage or deed of trust and states that the loan has been paid in full; and

(2) Release any recorded mortgage or deed of trust securing the loan.

(d) Form of release. -- The release shall be:

(1) In writing; and

(2) Prepared at the expense of the holder.

(e) Documents to be provided by holder. --

(1) If the holder does not record the release or provide the release to a responsible person for recording within 45 days after a loan secured by an existing mortgage or deed of trust has been paid in full and there has been no further commitment by the holder to make an advance or by the borrower to incur an obligation secured by the mortgage or deed of trust, the holder shall furnish the borrower with:

(i) The release in a recordable form; and

(ii) A notice disclosing the location where the release should be recorded and the estimated amount of any fee required to be paid to a governmental entity in order to record the release.

(2) If the holder records the release, the holder shall furnish the borrower with a copy of the release.

(f) Fees. --

(1) A fee for the recording of a release may be collected by the holder from the borrower subject to this subsection.

(2) If a fee is collected for the recording of a release:

(i) The release shall be recorded by the holder; and

(ii) Any portion of the fee not paid to a governmental entity for recording the release that exceeds $ 15 shall be refunded to the borrower.

(3) A fee authorized under this subsection is not interest with respect to any loan.

(4) If a fee is not collected for the recording of a release, the holder is not obligated to record the release.

(g) Exceptions. --

(1) This subsection does not apply to:

(i) A licensee under Title 11, Subtitle 5 of the Financial Institutions Article; or

(ii) An entity described in § 11-502(b)(1) or (10) of the Financial Institutions Article.

(2) Except as provided in paragraph (1) of this subsection, if the borrower is the prevailing party in an action to require the delivery of the release, the holder is liable for the delivery of a release and for all costs and expenses in connection with the bringing of the action, including reasonable attorney's fees.

§ 3-105 - 2. Release of mortgage, deed of trust, or lien instrument.

(a) "Lien instrument" defined. -- In this section, "lien instrument" means:

(1) A lien created under the Maryland Contract Lien Act;

(2) An instrument creating or authorizing the creation of a lien in favor of a homeowners' association, a condominium council of unit owners, a property owners association, or a community association;

(3) A security agreement; or

(4) A vendor's lien.

(b) In general. -- A mortgage, deed of trust, or lien instrument may be released validly in accordance with this section.

(c) Statutory release affidavit on failure of satisfied party to provide recordable release. -- When the debt secured by a mortgage, deed of trust, or lien instrument is paid fully or satisfied by a settlement agent licensed by the Maryland Insurance Administration as a title insurance producer under Title 10, Subtitle 1 of the Insurance Article, a title insurer, or a lawyer admitted to the Maryland Bar, and the party satisfied fails to provide a release suitable for recording, the settlement agent, title insurer, or lawyer may prepare and record a statutory release affidavit that:

(1) May be received by the clerk and indexed and recorded as any other instrument in the nature of a release or certificate of satisfaction; and

(2) Has the same effect as a release of the property for which the mortgage, deed of trust, or lien instrument is the security, as if a release were executed by the mortgagee, named trustees, or secured party.

(d) Notice of statutory release affidavit; waiting period. -- Before the settlement agent, title insurer, or lawyer may record a statutory release affidavit under this section, that person shall:

(1) Allow at least a 60-day waiting period from the date the mortgage, deed of trust, or lien instrument is paid fully or satisfied for the party satisfied to provide a release suitable for recording;

(2) Send by certified mail, with or without a return receipt, to the party satisfied:

(i) A copy of this section;

(ii) A copy of the proposed statutory release affidavit that the person intends to record; and

(iii) A notice that unless a release suitable for recording is provided within 30 days, the person will obtain a release in accordance with the provisions of this section;

(3) After the mailing of the notice under item (2) of this subsection, allow an additional waiting period of at least 30 days for the party satisfied to provide a release suitable for recording.

(e) Recordation of statutory release affidavit; form and contents. -- A statutory release affidavit recorded under this section shall:

(1) Be in substantially the following form:

"Statutory Release Affidavit

I hereby declare or affirm, under the penalties of perjury, that:

(1) On (insert date), I caused to be paid off the debt secured by the mortgage, deed of trust, or lien instrument, found in Liber/Book , at Folio/Page , in the land records of County/Baltimore City, Maryland.

(2) I obtained a written payoff statement from the person to whom the debt was owed or the person's agent, the funds paid to the person or the person's agent were sufficient to pay off the debt in full, and, as authorized by the obligor on the account, I instructed the person or the person's agent to close the account.

(3) On (insert date), I sent the notice required under § 3-105.2(d)(2) of the Real Property Article to the person satisfied by certified mail.

(4) The person satisfied has failed to provide a release suitable for recording.

(5) I am:

A settlement agent who holds a title insurance producer license in good standing from the Maryland Insurance Administration;

An officer of a title insurer; or

A member of the Maryland Bar.

(6) The payoff of the debt was accomplished by:

The original check, written on an escrow account controlled by the undersigned individual, which is attached to this affidavit and incorporated by reference;

A check, written on an escrow account controlled by the undersigned individual, a check facsimile of which is attached to this affidavit and incorporated by reference, and which has been certified as a true copy of the original check by the issuing bank; or

A wire transfer, the wire transfer remittance advice for which contains the information required under § 3-105.2(e)(2)(iii)2 of the Real Property Article and is attached to this affidavit and incorporated by reference.

(signature)

(printed or typed name)

(date)"

; and

(2) Be accompanied by:

(i) The canceled check evidencing final payment, which shall contain the name of the party whose debt is being satisfied, the debt account number, if any, and words indicating that the check is intended as payment in full of the debt being satisfied;

(ii) If the canceled check is unavailable, a check facsimile, as defined in § 5-513 of the Financial Institutions Article, that contains the information required under item (i) of this item, accompanied by a certification from an authorized agent of the institution on which the check was drawn stating the check facsimile is a true and genuine image of the original check; or

(iii) If the debt securing the mortgage, deed of trust, or lien instrument was paid off by a wire transfer, the wire transfer remittance advice, which shall:

1. Be accompanied by a certification from an authorized agent of the institution from which the wire transfer was initiated stating that the document is a true and genuine image of the original wire transfer confirmation order issued by the institution; and

2. Contain the name of the person for whom the payoff was made, the name of the institution that was paid the money, a truncated version of the number of the account from which the funds were transferred, a truncated version of the number of the account to which the funds were transferred, the Federal Reserve Bank's reference numbers for the wire transfer, the loan number for the note that was paid off, the amount of the payoff made by the wire transfer, and the date and time of the wire transfer.