Mortgage Lien Release: What is it and how does it work?

Mortgage Lien Release: What is it and how does it work?

What is a mortgage lien?

A mortgage lien is a legal contract between you and your mortgage lender; it’s one of the many documents you signed when you closed on your mortgage loan. Your local county recorder’s office keeps it on file, and it confirms that your lender is the true owner of your property until you pay off your loan. The lien gives your lender the right to take your property if you don’t pay back your mortgage loan. The lien also prevents you from selling or transferring your property to someone else until you repay your loan in full—or someone else legally assumes the responsibility to pay your mortgage.

If you have a mortgage loan, your lender has a lien on your property.

What is a lien release?

A lien release takes place when your lender (the “lienholder”) releases their claim to your property (also called “lifting” or “waiving” the lien). Depending on where you live, the document that proves your lender has released their claim is called a “release of lien” or a “certificate of satisfaction.” By signing the lien release, your lender is confirming that they no longer have any legal claim to your property.

If you sell your property or legally transfer it to someone else, your loan servicer must be involved in the selling process to make sure the lien is properly released or transferred before you can complete the transaction.

How does the lien-release process work?

When you pay off your loan while we’re servicing it, we’ll pay off your lender and make sure they sign a release of lien/certificate of satisfaction. On your lender’s behalf, we’ll send that document to your local county recorder or land records office. After your local office records it and returns it to us, we’ll send the document to you.

What happens if I sell my house?

If you sell your property before you pay off your mortgage loan, your title company pays off your lender and follows up to make sure they release their lien.

What happens if I refinance my loan?

As with selling your house, when you refinance, your title company pays off your lender and makes sure the lender releases their lien on your property.

If you refinance your loan through New York state’s CEMA program, we send all of your loan documents to the owner of your new loan.

I’ve sent you a check to pay off my mortgage loan in full. Do I need to do anything else?

No; there’s nothing more you need to do.

When we receive your payoff check, on behalf of your lender we’ll mail a lien release document (which verifies your payoff) to your local county recorder or land records office within 30 business days after your payoff date (sooner in some states). But depending on where you live, it may take more than 30 days for your local office to record the document and return it to us. Regardless of how long the recording process takes, we’ll send you the recorded document after we receive it.

I’ve paid off my home-equity line of credit; it now has a zero balance. What do I need to do?

Your account may have a zero balance, but that doesn’t mean your lender has released their lien on your property. You need to send us a request in writing. When we receive your request, we’ll close your account. After your account is closed, we’ll prepare and send a lien release to your county recorder’s office.

Submit your request by logging into your account on our website and visiting the “Contact Us” section. Or you can mail your request to:    

Shellpoint Mortgage Servicing
75 Beattie Place, Ste 300
Attention: Lien Release Department
Greenville, SC 29601

To what address do you mail lien-release documents?

We send documents only to the mailing address we have on file for you. So if you recently moved, log on to your account on our website right away and update your mailing address.

I paid off my loan while it was managed by my previous servicer. Can you help me get a lien release?

If you paid off your loan through another loan servicer—such as Ditech, GreenTree, GMAC, or any other mortgage servicer—we can’t help you obtain a lien release because we didn’t service your loan.

I need a lien release on a manufactured home. How does that work?

If you’ve paid off a mortgage on a manufactured home, we first need to obtain your mortgage document file (or “collateral” file) from our document custodian (the company we use to store and safeguard the physical mortgage files for the loans we service). That process alone can take up to 30 days, and you’ll need to allow a total of 90 days after payoff for us to send you your released title.

But if you need us to issue a lien release before we obtain your collateral file, that is possible. You’ll need to send us a DMV or county title search that lists the following information in detail:

  • Home information (including the home’s address)
  • Homeowner information (including the full names, current addresses, and current phone numbers of all parties listed on the documents) as shown on the title
  • Lienholder (lender) information (including full legal name, address, and phone number) as shown on the title
  • Manufactured home or vehicle VIN/serial number, year, make, and model number.

We’ll use the information you send us to prepare an accurate lien release. Send your title-search document with your request to ROLInqueries@shellpointmtg.com.

I’ve paid off the loan on my co-op apartment. How do I get a lien release?

A UCC-1 (Uniform Commercial Code) statement filing is required when you buy shares of stock to own a co-op apartment in some cities (such as New York City). The UCC-1 statement serves as a lien on the apartment, so you can’t sell your shares without first paying off your loan.

When you sell your co-op unit or pay off the loan that financed your purchase, your loan servicer or lender will sign a UCC-3 termination statement and file it with the county clerk in the county where your unit is located (in New York City, it’s filed with the City Register). When it’s filed, the UCC-3 statement releases your lender’s lien on your co-op.

As with a manufactured home, to complete your lien release, we need to obtain your document (or “collateral”) file from our document custodian (the company we use to store and safeguard the paper files for the loans we service). That process alone can take up to 30 days, and you’ll need to allow a total of 90 days after payoff for us to process your stock and lien-release documents. We use a lien-release vendor to terminate UCC filings in compliance with state-required timelines.

I’ve been waiting to receive my lien-release documents. How can I check on their status?

You can sign in to our website to see if your lien release is available. Select Online Services and chose Available Documents. Both the unrecorded and recorded lien release (or “satisfaction” document) are available after we receive them from your county recorder’s office.

After 90 days, you can request a lien-release update from us by emailing ROLInqueries@shellpointmtg.com.