Cancelling Deed of Trusts
Session Law 2005-123 can be viewed in its entirety on the North Carolina General Assembly website.
The provision of this new law makes some of the most fundamental changes to North Carolina law governing the Register of Deeds duties. It is apparent that it captures parts of the Uniform Residential Mortgage Satisfaction Act and is suppose to reduce some of the complex problems associated with deeds of trust/mortgage satisfactions.
Deeds of trust and mortgages can be satisfied with a simple instrument prepared and signed by the trustee or secured creditor and acknowledged; however, still allowing for satisfaction previously provided for in North Carolina Law, Register of Deeds no longer will have forms for satisfaction the provisions of the law says no particular phrasing is required for a satisfaction of a security instrument or trustee's satisfaction of a deed of trust; however minimum information is required (G.S 45-36.11,.21 (2005) also borrowers' attorneys can record affidavits of satisfaction when secured creditors fail to provide satisfactions.
There appears to be only two reasons for a Register of Deeds to refuse to record such:
- Document is submitted by a method or in a medium not allowed by applicable law.
- Document is not signed by the required party (secured creditor, trustee) and acknowledge as required for real estate conveyance.
The requirement under the provisions of G.S 45-37 remains as to names be printed, stamped, or typed beneath signatures on satisfactions.
The law makes clear that a Register of Deeds is not required to verify or make inquiry concerning the trust of the matters stated in any satisfaction or question the authority of the person executing the document.
Presentation Satisfaction Method
The satisfaction method know as "presentation" to the Register of Deeds is retained, presentation by the secured creditor or trustee of the original security instrument and note endorsed thereon by the creditor or trustee, or by grantor, mortgagor, or their attorney or agent of the original security instrument and the instrument it secures if the maturity date is more than ten years old, and by bearer or holder of the original negotiable instrument and instrument it secures, signed mark and paid, (providing no notice was given of a loss or theft of the instrument) upon presentation of such the Register of Deeds prepares and records a record of satisfaction or all of or a portion of the original instrument that identifies the original parties and original instrument recording data upon which must contain the creditor's endorsement of payment.
The provisions of the new law deletes the Notice of Satisfaction by a trustee or mortgagee, however, still allows a mortgagees or trustee to satisfy of record a mortgage of deed of trust by quitclaim, release, or conveyance instrument signed, acknowledge, and recorded as required for real estate conveyances.
Satisfaction Rescission & Self-Help Procedures
There is also a Satisfaction Rescission procedure for anyone who erroneously recorded a satisfaction instrument or a affidavit of satisfaction is allowed to record a document of rescission that identifies the erroneous satisfactions and states that an error has been made, also Self-Help Satisfaction procedures for a borrower to make a record of satisfaction if the lender fails to do so.