Satisfaction of mortgage is a document or a release letter stating that a certain mortgage loan has already been fully paid. It is confirmed and signed by the lender or the mortgagor signifying that such transaction has been settled. This document is then recorded by the Country Recorder to ensure the title of the property involved is clear and also for future reference. It therefore refers to the fulfillment of duties and obligations on agreements done related to mortgage.
Usually, satisfaction of mortgage is required in loans, bonds and other financial transactions. It should be understood, however, that although the mortgage of a loan has been fully paid, the borrower can already continue living peacefully. A formal and legal document needs to be issued by the lender to guarantee that the borrower is free from liens.
This document contains a full description of the mortgage and states that it has been paid in full. It should also bear the signature of the mortgagee to confirm that such payment was indeed made. It would serve as the main proof before another transaction could be done. Additionally, it is the duty of the public office to record such acknowledgment made by the lender and mortgagee.
A satisfaction of mortgage is essential to every transaction and its steps should really be carefully followed, from the paying to the recording. Once this is not filed, problems could possibly arise especially in the absence of a record which would then be hard to prove that such satisfaction occurred. In the future, that specific property can be questioned.