Vermont Attorneys Title Corporation

• Vermont Title Standards Index ›

  • 1.1 The Role of the Examining Attorney
  • 1.2 The Examining Attorney's Attitude
  • 1.3 Definition of Marketable Title
  • 1.4 Reference to Title Standards in Real Estate Sales Contract
  • 2.1 Period of Search
  • 2.2 The Concept of the Chain of Title and its Relationship of the Rule of Record Notice and the Scope of the Title Searcher's Obligation
  • 2.3 Effect of Recording Instruments Claiming an Interest in Real Estate
  • 2.4 Wild Instruments: Instruments by Strangers to the Record Chain of Title
  • 2.4A After Acquired Property
  • 2.5 Priority of Conveyances
  • 2.6 Time When a Conveyance is Considered as Properly "Recorded"
  • 2.7 Record of Expired Leases or Expired Interests
  • 4.1 Limitation on the Use by Grantor of Corrective Deeds
  • 6.1 Grantors
  • 6.2 Majority
  • 6.3 Mental Capacity
  • 6.4 Marital Interests
  • 6.5 Powers of Attorney
  • 7.1 Grantees
  • 8.1 Name Variances
  • 9.1 Execution, Witnessing and Acknowledgement
  • 11.1 Delivery
  • 13.1 Conveyance by Heirs' Deed
  • 13.2 Conveyance by Devisees in Lieu of Probate Administration
  • 13.3 Omitted Real Estate or Faulty Description of Closed Estate
  • 13.4 Conveyance by Trustee of a Non-Probate Trust
  • 14.1 Conveyance to Two or More Persons
  • 18.1 Federal Special Gift Tax Lien
  • 18.2 Irregularities and Discrepancies in Discharges of Mortgage and other Documents
  • 18.3 Discharges of Corrected, Re-Recorded, or Modified Mortgages
  • 18.4 Effect of Failure to Discharge Assignments of Leases and/or Rent, Riders or Financing Statements
  • 18.5 Discharges Involving Mortgage Electronic Registration System (MERS)
  • 20.1 Presumptions Applicable to Corporate Conveyances
  • 22.1 Limited Liability Companies
  • 23.1 Federal General Tax Lien
  • 24.1 Federal Special Estate Tax Lien
  • 25.1 Federal Gift Tax Lien
  • 27.1 Vermont Estate Tax Lien
  • 28.1 Establishing Marketable Title To Interests In Real Property Owned By Failed Financial Institutions
  • 28.2 Title of the Receiver of a Failed Financial Institution to the Assets of That Institution
  • 28.3 Title of the Immediate Transferee of the Receiver of a Failed Financial Institution
  • 28.4 Marketability of Title In a Real Estate Interest of a Failed Financial Institution for Which No Conveyance, Transfer or Assignment Appears of Record Prior to the Dissolution of the Bridge Institution Which Had Continued The Business of the Failed Institution
  • 28.5 Discharges, Partial Releases, Assignments and Foreclosure of Mortgages of a Failed Institution By a Transferee of the Receiver For Such Failed Institution

CHAPTER XVIII

 STANDARD 18.1

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DISCHARGES OF MORTGAGES

Mortgages may be discharged by any of the following methods:

1. By entry on the margin of the record of the mortgage executed by the mortgagee and witnessed by the town clerk;
2. By acknowledgement of payment by the mortgagee of record by entry on the mortgage deed and witnessed;
3. By separate instrument executed and acknowledged by the mortgagee of record;
4. By licensed attorney pursuant to affidavit per 27 VSA §464a;
5.  By deed of (re)conveyance by the mortgagee to the current record title holder; or
6. By deed executed or joined in by the mortgagee, provided the joinder is for the express purpose of discharging the mortgage.

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Comment 1: Vermont is a title theory state. The granting of a mortgage is a conveyance of legal title by the mortgagor to the mortgagee subject to the mortgagor’s right to redeem.

Comment 2: Normally, a discharge executed by a mortgagee merely evidences a record termination of  the security interest, which has already occurred by operation of law as a result of the payment of the debt.  Whatever  extinguishes the debt, discharges the mortgage. Island Pond Natl Bank v. Lacroix, 104 Vt. 282 (1932). Once the debt has been satisfied, there is no longer any outstanding mortgage which could be enforced, whether or not it has been formally discharged. Nash v. Kelley, 50 Vt. 425, 430. However, payment of the mortgage debt is a factual issue, and, absent a discharge of mortgage executed and delivered by the holder of the mortgage, the mortgage must be judicially terminated if the mortgage is to be discharged of record.  In order to make the title marketable, a discharge of the mortgage should be secured and recorded.

Comment 3. See 12 VSA §502 for the 15 year statute of limitations for the re-entry of land. See  also Huntington v. McCarty, 174 Vt. 69 (2000).

Comment 4. Where a Certificate of Redemption is filed in a foreclosure action, no discharge is required.  The Certificate of Redemption is conclusive evidence of satisfaction of the conditions of the mortgage.

Comment 5.  Where there is a Deed in Lieu of Foreclosure in the chain of title, there is no need to obtain a discharge of any mortgage(s) in which (1) the grantor of the deed in lieu of foreclosure is the then current owner of record title and (2) the grantee of the deed in lieu is the record holder of the mortgage at the time of the deed in lieu; and the deed in lieu of foreclosure does not preserve the separation of legal and equitable title.

Comment 6.  See title standard 18.2 regarding errors in the form of the discharge.

Comment 7. See 27 V.S.A. §470 for curative provisions for defective discharges.

History

September 26, 2008  This standard was added.

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