Failing to Record a Mortgage Discharge – An Expensive Mistake
What is a Mortgage Discharge in Massachusetts?
Upon paying off your mortgage (congratulations, by the way) your next step should be the recording of the mortgage discharge. A mortgage discharge is document received by a borrower or former borrower of a mortgage which indicates that the mortgage has been paid in full and discharged. Once received the mortgage discharge should be recorded with the proper registry of deeds in Massachusetts to demonstrate to anyone interested, that the title on the property is clear (has not outstanding encumbrances on it, e.g., a mortgage).
Who is Supposed to Record a Mortgage Discharge at the Registry of Deeds?
Under Massachusetts General Law, Chapter 183, section 55, the mortgagee (the bank or lender who holds the mortgage) must, within 45 days after receiving the payoff, either record the discharge itself or deliver a signed, recordable discharge to the closing attorney, settlement agent or other person who sent the payoff. This next part is very important….failure of a lender or bank to record a mortgage discharge or to cause a mortgage discharge to be recorded within the 45 days as proscribed under Massachusetts law can be very costly to a lender or bank.
Practically, recording a mortgage discharge is not always done in a timely manner, or at all. When a bank or lender fails to record a mortgage discharge this can result in serious problems for a lender or bank and they may owe the original mortgagor (you) money for the failure to record the discharge of the mortgage.
Why Would I Receive Money for a Bank Failing to Record a Mortgage?
The recording of a mortgage discharge in Massachusetts is the method of demonstrating to anyone else interested in the property, say for example, a prospective home buyer, that the title on the home is free of the encumbrance of a mortgage. Being free from a mortgage means that the new or prospective buyer can purchase the home with a new mortgage while not having to worry about paying off an old mortgage that is still due on the home. Moreover, if you are the homeowner and have just paid off your mortgage and the lender has failed to record the mortgage discharge this fact could hold up any ability you would normally have to obtain an equity line on the home for example.
If either of these problems occur to you because of the failure of a bank or lender to record the mortgage discharge of your mortgage held in Massachusetts, you may be able to receive money under Massachusetts law for this failure. At a minimum, the failure to record a discharge could cost the bank or lender $2500 (paid directly to you for their failure to record a mortgage discharge in Massachusetts), although if the lender fixes the problem within 30 days after receiving your written demand sent by certified mail, in-hand delivery or overnight delivery, its liability is limited to your actual damages. In the extreme, the failure of bank or lender to record a mortgage discharge could cost the bank or lender the amount of your actual damages, as well as any other damages available under Massachusetts law for failing to record the mortgage discharge.
Contact The Law Offices of Richard Alan Gaudet, LLC, to help you deal with a mortgage discharge that has not been recorded on property owned in Massachusetts where that failure to record the discharge has resulted in damages to you. We are equipped to handle such matters and would like to hear your case.
What if the lender sends the discharge to me?
If you paid off the loan yourself rather than through a closing, the lender may mail the discharge to you instead of recording it. It must come with a transmittal letter, in bold type, telling you that you must record the discharge at the registry of deeds where your deed is recorded, that the lender has included the recording fees it is required to pay, and that the fee for recording the discharge itself is your responsibility unless you paid it with the payoff.
Record it promptly. If the company that signed the discharge isn’t the lender shown in the registry records, the discharge must also show how that company became the holder of the mortgage, for example through recorded assignments, and the lender must provide that documentation in recordable form if it isn’t already on record. Until the discharge is recorded, the old mortgage remains a “cloud” on your title that can hold up a sale or refinance.
Where are Mortgage Discharges Recorded?
If you’ve read this far and are still wondering how to find out if your mortgage has been discharged once paid off, the next step is fairly easy. Simply go to the appropriate Registry of Deeds in Massachusetts (see below for a list of which registry handles your town or city) and find out if your mortgage discharge has been recorded there. You will want to look for a search option that allows you to look through land records and then search either by your first and last name, or by the property address itself. Next, look for an entry in the search results indicating “mortgage discharge” or similar entry. Once found (if it has actually been recorded) there will be another option to look at an image of the mortgage discharge. Confirm that the amount of the discharge is correct, the date, name of lender and your information is correct.
Remember that a failure to record a mortgage discharge in Massachusetts can result in money paid directly to you, even if you have not suffered any damages, unless the lender records the discharge within 30 days after receiving your written demand. However, if you have been harmed because of the failure to record a mortgage discharge the bank or lender may be responsible to pay you for those damages.
Below you will find a list of the appropriate Massachusetts Registry of Deeds that you can then look for a recorded (or not) mortgage discharge in:
Northern Essex Registry of Deeds – Massachusetts
Serves Andover, Lawrence, Methuen and North Andover
Southern Essex Registry of Deeds – Massachusetts
Serves Amesbury, Beverly, Boxford, Danvers, Essex, Georgetown, Gloucester, Groveland, Hamilton, Haverhill, Ipswich, Lynn, Lynnfield, Manchester, Marblehead, Merrimac, Middleton, Nahant, Newbury, Newburyport, Peabody, Rockport, Rowley, Salem, Salisbury, Saugus, Swampscott, Topsfield, Wenham, and West Newbury
Suffolk County Registry of Deeds – Massachusetts
Serves Boston, Chelsea, Revere, and Winthrop
Worcester Registry of Deeds – Massachusetts
Serves Athol, Auburn, Barre, Berlin, Blackstone, Bolton, Brookfield, Charlton, Clinton, Douglas, Dudley, East Brookfield, Gardner, Grafton, Hardwick, Harvard, Holden, Hopedale, Hubbardston, Lancaster, Leicester, Mendon, Milford, Millbury, Millville, New Braintree, North Brookfield, Northboro, Northbridge, Oakham, Oxford, Paxton, Petersham, Phillipston, Princeton, Royalston, Rutland, Shrewsbury, Southboro, Southbridge, Spencer, Sterling, Sturbridge, Sutton, Templeton, Upton, Uxbridge, Warren, Webster, Westboro, West Boylston, West Brookfield, Winchendon and Worcester.
Plymouth County Registry of Deeds – Massachusetts
Serves Wareham, West Bridgewater, Whitman, Scituate, Rockland, Rochester, Plympton, Plymouth, Pembroke, Norwell, Middleboro, Mattapoisett, Marshfield, Marion, Lakeville, Kingston, Hull, Hingham, Hanson, Hanover, Halifax, East Bridgewater, Duxbury, Carver, Brockton, Bridgewater, Abington
Norfolk County Registry of Deeds – Massachusetts
Serves Avon, Bellingham, Braintree, Brookline, Canton, Cohasset, Dedham, Dover, Foxborough, Franklin, Holbrook, Medfield, Medway, Millis, Milton, Needham, Norfolk, Norwood, Plainville, Quincy, Randolph, Sharon, Stoughton, Walpole, Wellesley, Westwood, Weymouth, Wrentham
Nantucket Registry of Deeds – Massachusetts
Serves Nantucket
Middlesex South Registry of Deeds – Massachusetts
Serves Acton, Arlington, Ashby, Ashland, Ayer, Bedford, Belmont, Boxborough, Burlington, Cambridge, Concord, Everett, Framingham, Groton, Holliston, Hopkinton, Hudson, Lexington, Lincoln, Littleton, Malden, Marlboro, Maynard, Medford, Melrose, Natick, Newton, North Reading, Pepperell, Reading, Sherborn, Shirley, Somerville, Stoneham, Stow, Sudbury, Townsend, Wakefield, Waltham, Watertown, Wayland, Weston, Winchester and Woburn.
Middlesex North Registry of Deeds – Massachusetts
Serves Billerica, Carlisle, Chelmsford, Dracut, Dunstable, Lowell, Tewksbury, Tyngsborough, Westford and Wilmington.
Hampden County Registry of Deeds – Massachusetts
Serves Agawam, Blandford, Brimfield, Chester, Chicopee, East Longmeadow, Granville, Hampden, Holland, Holyoke, Longmeadow, Ludlow, Monson, Montgomery, Palmer, Russell, Southwick, Springfield, Tolland, Wales, West Springfield, Westfield and Wilbraham.
Hampshire County Registry of Deeds – Massachusetts
Serves Amherst, Belchertown, Chesterfield, Cummington, Easthampton, Florence, Goshen, Granby, Hadley, Hampshire County, Hatfield, Haydenville, Huntington, Leeds, Middlefield, Northampton, Pelham, Plainfield, South Hadley, Southampton, Ware
Franklin County Registry of Deeds – Massachusetts
Serves Ashfield, Bernardston, Buckland, Charlemont, Colrain, Conway, Deerfield, Erving, Gill, Greenfield, Hawley, Heath, Leverett, Leyden, Monroe, Montague, Northfield, Orange, Rowe, Shelburne, Shutesbury, Sunderland, Warwick, Wendell, Whately
Dukes County Registry of Deeds – Massachusetts
Serves Aquinnah, Chilmark, Edgartown, Gay Head, Gosnold, Oak Bluffs, Tisbury, West Tisbury
Bristol Northern Registry of Deeds – Massachusetts
Serves Attleboro, Berkley, Dighton, Easton, Mansfield, North Attleboro, Norton, Raynham, Rehoboth, Seekonk and Taunton.
Bristol Southern Registry of Deeds – Massachusetts
Serves Acushnet, Dartmouth, Fairhaven, New Bedford and Westport.
Fall River Registry of Deeds – Massachusetts
Serves Fall River, Freetown, Somerset and Swansea.
Berkshire Registry of Deeds (Middle District) – Massachusetts
Serves Becket, Dalton, Hinsdale, Lee, Lenox, Otis, Peru, Pittsfield, Richmond, Stockbridge, Tyringham and Washington.
Berkshire Registry of Deeds (Southern District) – Massachusetts
Serves Alford, Egremont, Great Barrington, Monterey, Mount Washington, New Marlborough, Sandisfield, Sheffield and West Stockbridge.
Berkshire Registry of Deeds (Northern District) – Massachusetts
Serves Adams, Cheshire, Clarksburg, Florida, Hancock, Lanesboro, New Ashford, North Adams, Savoy, Williamstown and Windsor.
Barnstable County Registry of Deeds
Serves Barnstable, Bourne, Brewster, Chatham, Dennis, Eastham, Falmouth, Harwich, Mashpee, Orleans, Provincetown, Sandwich, Truro, Wellfleet, Yarmouth
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About the Author
Richard Alan Gaudet, Esq. is a Massachusetts attorney at the Law Offices of Richard Alan Gaudet, LLC in Middleton, Massachusetts, who advises homeowners on deeds, mortgages and title issues. His practice focuses on professional license defense, business law and litigation, family law, and landlord representation, serving clients across Northern, Eastern, and Central Massachusetts. Reach him at 978-273-8337 or rgaudet@gaudetlawoffice.com. Office: 35 Village Rd., Ste 100, Middleton, MA 01949.
ABOUT THIS ARTICLE
This article was prepared by a Massachusetts attorney and is provided solely for general informational and educational purposes directed to members of the general public. It does not constitute legal advice and does not create an attorney-client relationship. The law applicable to any particular situation depends on the specific facts and circumstances of that matter. Readers are encouraged to seek the advice of a licensed Massachusetts attorney before taking any action.
