CERTIFICATES OF PAYMENT AND MORTGAGE CERTIFICATES OF RELEASE

Two types of documents you may find in your title search are Certificates of Payment and Mortgage Certificates of Release. The following is an explanation of each.

Certificates of Payment: A Certificate of Payment is an affidavit, signed by a title company or closer, stating that a particular mortgage or lien was paid off at a closing conducted by the title company or closer. Because certificates of payment are mere affidavits, if you find one in your title search, you may not rely upon it to determine that the mortgage is released. Although a Certificate of Payment provides some evidence that the underlying debt was paid, it cannot release a mortgage. In the event that the payoff was insufficient or rejected by the lender, the lender will not release the mortgage and the mortgage will continue to be valid.

Mortgage Certificates of Release: A Mortgage Certificate of Release is a document recorded by a title insurance company that has the effect of releasing a mortgage. This is true although the lender does not sign the document. This document was created by Illinois statute, which provides the authority, procedure, and forms necessary for a title insurance company to release a mortgage using the mortgage Certificate of Release. See 765 ILCS 935/1, et seq. When you find a Mortgage Certificate of Release in a title search, you may rely upon it to determine that the mortgage affected has been released. Further, if your transaction requires it, title companies will issue hold harmless letters in reliance on Mortgage Certificates of Release, pursuant to Section 10.1 of the statute.

If you have any questions about how to interpret a document that purports to say a mortgage is either paid or released, please contact the Underwriting Department, legal@atgf.com, 312.752.1990, or 217.403.0101, to discuss it.

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