NY Real Prop Actions L § 1921 (2021)
2021 New York Laws RPA - Real Property Actions and Proceedings Article 19 - Discharge or Extinguishment of Encumbrances, Claims and Interests 1921 - Discharge of Mortgage.

§  1921.  Discharge  of  mortgage.  1.  After  payment  of  authorized principal, interest and any other amounts due  thereunder  or  otherwise owed  by  law  has  actually been made, and in the case of a credit line mortgage as defined in  section  two  hundred  eighty-one  of  the  real property law on written request, a mortgagee of real property situate in this  state,  unless  otherwise requested in writing by the mortgagor or the assignee of such mortgage, must execute  and  acknowledge  before  a proper  officer,  in  like  manner  as  to  entitle  a  conveyance to be recorded, a satisfaction of mortgage, and thereupon within  thirty  days arrange  to  have  the  satisfaction  of  mortgage:  (a)  presented  for recording to the recording officer of the county where the  mortgage  is recorded,  or  (b)  if  so requested by the mortgagor or the mortgagor's designee, to the mortgagor or the mortgagor's  designee.  Failure  by  a mortgagee  to  present  a  certificate  of discharge for recording shall result in the mortgagee being liable to the mortgagor in the  amount  of five  hundred  dollars  if  he  or she fails to present such certificate within thirty days, shall result in the mortgagee being  liable  to  the mortgagor  in  the  amount of one thousand dollars if he or she fails to present a certificate of discharge for recording within  sixty  days  or shall  result  in  the  mortgagee  being  liable to the mortgagor in the amount of one thousand five hundred  dollars  if  he  or  she  fails  to present a certificate of discharge for recording within ninety days. For the  purposes  of  such  liability  under  this  subdivision,  the  term "mortgagee"  shall  not  include  a  person,  partnership,  association, corporation or other entity which makes less than five mortgage loans in any  calendar  year.  The mortgagee shall within forty-five days deliver the note and the mortgage and where a title is registered under  article twelve  of  the real property law, the registration copy of the mortgage and any registration certificates in the mortgagee's possession  to  the mortgagor or the mortgagor's designee making such payment and request if required  as  aforesaid.  Delivery  of  a  satisfaction  of  mortgage in accordance with the terms of section two  hundred  seventy-five  of  the real  property  law  shall be deemed to satisfy the requirements of this section regarding the satisfaction of mortgage.   2. Upon the failure or refusal of any such mortgagee  to  comply  with the  foregoing  provisions of this section any person having an interest in the mortgage or the debt or obligation  secured  thereby  or  in  the mortgaged  premises may apply to the supreme court or a justice thereof, or to the county court or a judge thereof, in or of any county in  which the  mortgaged  premises or any part thereof are situated in whole or in part, upon a petition, for an order to show cause why  an  order  should not  be  made  by  such  court canceling and discharging the mortgage of record, and directing the register or  clerk  of  any  county  in  whose office the same may have been recorded to mark the same upon his records as  canceled and discharged, and further ordering and directing that the debt or other obligation secured  by  the  mortgage  be  canceled,  upon condition that in the event such mortgage is not paid, the sums tendered pursuant  to  the  foregoing  provisions  of this section be paid to the officer specified by law to hold court funds  and  moneys  deposited  in court in the county wherein the mortgaged premises are situated in whole or  in part. Said petition must be verified in like manner as a verified pleading in an action in the supreme court and it  must  set  forth  the grounds of the application.   3.  In any case where an actual tender, as provided in subdivision one of this section, cannot with due diligence be made  within  this  state, any  person having an interest in the mortgage or the debt or obligation secured thereby, or in the mortgaged premises, may apply to the  supreme court  or  a justice thereof, or to the county court or a judge thereof,  in or of any county in which the mortgaged premises, or any part thereof are situated in whole or  in  part,  upon  petition  setting  forth  the grounds  of  the  application and verified as aforesaid, for an order to show  cause  why an order should not be made by said court canceling and discharging the mortgage of record, and directing the register or  clerk of  any  county  in whose office the same may have been recorded to mark the same upon  his  records  as  canceled  and  discharged  and  further ordering  and directing that the debt or other obligation secured by the mortgage be canceled, upon condition  that  the  principal  sum  of  the mortgage  or  any  unpaid  balance thereof, with interest up to the date when said order shall be entered and the aforesaid fees allowed by  law, be  paid  to the officer specified by law to hold court funds and moneys deposited in court in the county  wherein  the  mortgaged  premises  are situated in whole or in part.   4.  In  the  case  of  a  mortgage  secured  by property improved by a one-to-six family, owner occupied, residential structure or  residential condominium  unit,  if the mortgagee fails within ninety days to deliver the satisfaction of mortgage and/or fails within ninety days to  deliver the  note  and  the  mortgage  and  any  other  documents as required by subdivision one of this section and if the  mortgage  is  not  otherwise satisfied  the mortgagee shall be liable to such person in the amount of five hundred dollars or the economic loss to such person,  whichever  is greater. If the mortgagee has delivered such satisfaction of mortgage in a  timely manner and has certified that the note and/or mortgage are not in its possession as of such date, the mortgagee  shall  not  be  liable under  this  section if the mortgagee agrees to defend and hold harmless the mortgagor by reason of the inability or failure of the mortgagee  to furnish  the  note or mortgage within the time period prescribed in this subdivision; provided that in connection with mortgage  loans  purchased prior  to July twenty-seven, nineteen hundred ninety-one by the state of New York mortgage agency pursuant to section two thousand  four  hundred five  or two thousand four hundred-five-b of the public authorities law, the state of New York mortgage agency, its successors or  assigns  shall not be liable under this section if it does not defend and hold harmless the  mortgagor by reason of the inability or failure of the state of New York mortgage agency, its successors or assigns to furnish the  note  or mortgage  within the time period prescribed in this subdivision. Damages imposed by this subdivision shall be in addition to the other costs  and fees allowed in this section.   5.  (a)  In  the  case of a mortgage secured by property improved by a one-to-six family, owner occupied, residential structure or  residential condominium  unit,  if  within  ninety  days  of receipt of payment, and request if required, the mortgagee fails to deliver to the mortgagor  or the  mortgagor's designee the satisfaction of mortgage, the note and the mortgage and any other documents as required by subdivision one of  this section,  any  attorney-at-law may execute, acknowledge and upon payment of an additional filing fee of fifty dollars cause to be filed with  the recording  officer  of  the  county  where  the mortgage is recorded, an affidavit which complies with this section. Unless the  mortgagee  shall file  a  verified objection to such affidavit within thirty-five days of being filed, as of the date thirty-five days subsequent to  its  filing, such  affidavit  shall be recorded and satisfy the lien of such mortgage on the mortgaged premises.  (b) The affidavit shall state that:  (i) The affiant is an attorney-at-law and that the affidavit  is  made on  behalf  of and at the request of the mortgagor or any person who has acquired title to the mortgaged premises;  (ii) The mortgagor made a proper request  of  the  mortgagee  for  the execution of the satisfaction of mortgage pursuant to subdivision one of this section;  (iii)  The  mortgagor  has  received  a  payoff statement for the loan secured by the mortgage, and shall annex  as  evidence  a  copy  of  the payoff statement;  (iv)  The  affiant has ascertained that the mortgagee received payment of the loan in accordance with the payoff statement, and shall annex  as evidence, copies of the check negotiated by the mortgagee or documentary evidence of such payment;  (v)  The  affiant,  at  least thirty days after the mortgagee received payment, has given the mortgagee written notice together with a copy  of the  proposed  affidavit,  delivered  by  certified  or registered mail, return receipt requested, to the attention of the person  or  department set forth in the payoff statement, of the affiant's intention to execute and record an affidavit in accordance with this section; and  (vi)  The  mortgagee has not responded in writing to such notification or all requests by the mortgagee for payment have been complied with  at least fifteen days prior to the date of the affidavit.  (c)  Such  affidavit  shall  identify the mortgagor and the mortgagee, state the date of the mortgage, the liber and page of the  land  records where the mortgage is recorded and give similar information with respect to any recorded assignment of the mortgage.  (d)  The  affiant  shall attach to the affidavit photostatic copies of the  documentary  evidence  that  payment  has  been  received  by   the mortgagee,  including  mortgagee's  endorsement  of  any  check,  and  a photostatic copy of the payoff statement and certify each to be  a  copy of the original document.  (e)  Within  five days of the filing of such affidavit the register or clerk of every county in whose office said mortgage  has  been  recorded shall  give  the  mortgagee  written  notice,  delivered by certified or registered mail, return receipt  requested,  to  the  attention  of  the person  or  department  set forth in the payoff statement, as annexed to the affidavit filed hereunder, of the filing of  such  affidavit,  which notice shall include the following notice in capital letters:    "THIS  NOTICE  IS MADE UNDER SECTION 1921 OF THE REAL PROPERTY ACTIONS AND PROCEEDINGS LAW. FAILURE TO FILE WITH THIS OFFICE WITHIN THIRTY DAYS OF THIS NOTICE A VERIFIED OBJECTION TO THE  DISCHARGE  OF  THE  MORTGAGE DESCRIBED IN THIS NOTICE WILL RESULT IN SUCH MORTGAGE BEING CANCELED AND DISCHARGED OF RECORD."  Unless  the  register  or  clerk  of  such county shall receive from the mortgagee, within thirty-five  days  of  the  date  of  filing  of  such affidavit,  a  verified  objection  by the mortgagee to the discharge of said mortgage, the register or clerk  shall  record  the  affidavit  and supporting  documents  and  mark the mortgage described in the affidavit canceled and discharged of record and such recorded affidavit shall have the same force and effect as a duly executed  satisfaction  of  mortgage recorded in accordance with section three hundred twenty-one of the real property law. If the register or clerk of such county shall receive from the  mortgagee,  within  thirty-five  days of the date of filing of such affidavit, a verified objection by the mortgagee  to  the  discharge  of said mortgage, the register or clerk shall return the original affidavit and the verified objection to the attorney filing such affidavit without marking  the  mortgage described in the affidavit canceled or discharged of record. The clerk or  register  of  such  county  shall  additionally transmit  a  copy  of  the  affidavit  and the verified objection to its  applicable  appellate  division  of  the  supreme  court,  committee  on professional  standards,  for  such  further  proceedings  as determined appropriate by such committee.  (f) The county clerk or register shall index the affidavit in the same manner  as  a  satisfaction of mortgage and shall record such instrument upon payment of the same fees as for a satisfaction of mortgage.  (g) (i) Any attorney who prepares an affidavit and negligently  causes the  affidavit  to  contain  false  information  shall  be liable to the mortgagee for any monetary  damages  and  subject  to  other  applicable sanctions under law.  (ii) Any person who supplies false information for the affidavit shall be liable to the mortgagee for any monetary damages and subject to other applicable sanctions under law.  (h)  A  banking  or  other  organization having the original or copies thereof, shall  furnish,  within  sixty  days  of  receiving  a  written request,  a  copy  of  the  front and reverse sides of a check issued to satisfy the mortgage obligation by such banking or  other  organization, needed  for  completion of an affidavit in accordance with this subdivi- sion.   6. Eight days' notice of the application  for  either  of  the  orders provided  for  in  subdivisions  two  and three of this section shall be given to the then mortgagee of record and also,  if  the  petition  show that  there  is a mortgage not of record, to such mortgagee. Such notice shall be given in such manner as the  court  or  the  judge  or  justice thereof  to whom the petition is presented may direct, and said court or judge or justice may require such longer notice to be given as may  seem proper.  If  sufficient  cause  be  shown  the court or judge or justice thereof may issue such order to show cause returnable in less than eight days.   7. Upon the return day of such order to show cause,  the  court,  upon proof  of  due  service  thereof  and  on  proof  of the identity of the mortgagee and of the person presenting the petition,  shall  inquire  in such  manner  as  it may deem advisable, into the truth of the facts set forth in the petition, and in case it shall appear that  said  principal sum or any unpaid balance thereof and interest and the said fees allowed by  law  have  been  duly  paid  or  tendered  but not accepted and said satisfaction of mortgage has been duly presented for execution, or  that such  tender and presentation could not have been made within this state with due diligence, then, in the event such mortgage is  not  paid,  the court  shall  make an order directing the sums so tendered, or in a case where such tender could not have been made as aforesaid,  directing  the principal  sum  or  any unpaid balance thereof, with interest thereon to the date of entry of said order together  with  all  other  amounts  due thereunder  pursuant  to  subdivision  three  of  this  section  and the aforesaid fees allowed by law, to be paid to the  officer  specified  by law  to  hold  court  funds  and moneys deposited in court in the county wherein the application herein is made, and directing and ordering  that upon  such  payment the debt or other obligation secured by the mortgage be canceled and further directing the register or clerk of any and every county in whose office said mortgage shall have been  recorded  to  mark said  mortgage canceled and discharged of record upon the production and delivery to such register or clerk of a certified copy of the order  and the  receipt  of  such officer, showing that the amount required by said order has been deposited with him, which certified copy  of  said  order and  which  receipt  shall  be  recorded,  filed and indexed by any such register or clerk in the same manner as a certificate of discharge of  a mortgage.  Said  receipt  need  not  be acknowledged to entitle it to be recorded. The court in its discretion,  when  granting  any  such  order  after  application therefor pursuant to subdivision two of this section, may award costs and reasonable attorney's fees to the person making  the application,  in  the  absence  of the showing of a valid reason for the failure  or  refusal to execute the satisfaction of mortgage and deliver the same, the note and mortgage and any other documents  required  under subdivision one of this section. The money deposited shall be payable to the  mortgagee, his personal representative or assigns, upon an order of the supreme court or county court, directing the payment thereof to  him upon  such  evidence  as  to  his  right to receive the same as shall be satisfactory to the court.   8. Wherever any register or clerk shall record any order  and  receipt as  hereinbefore specified, he shall mark the record of said mortgage as follows:   "Canceled and discharged by order  of  the  .......................... Court,  County  of ......................., dated .................. and filed .......................," and thereupon the lien of such  mortgage shall  be  deemed to be discharged and the debt secured thereby shall be deemed to be canceled. Said register or  clerk  shall  be  permitted  to charge for recording and filing said order and receipt, the same fees to which  he  is  now  entitled  for  recording and filing a certificate of satisfaction of a mortgage.   9. When used in this section:  (a) "Mortgagee" means (i) the current holder of the mortgage of record or the current holder of the  mortgage,  or  (ii)  any  person  to  whom payments   are   required   to   be   made   or   (iii)  their  personal representatives, agents, successors, or assigns.  (b) "Attorney-at-law" means any person admitted  to  practice  law  in this state and in good standing.  (c) "Payoff  statement"  means  a  statement  setting forth the unpaid balance of the mortgage, including principal, interest and other charges pursuant to the loan documents,  together  with  a  per  diem  rate  for interest  accruing  after  the date to which the unpaid balance has been calculated. The payoff statement furnished by a banking organization  or corporate  mortgagee  shall  include a name of an individual employed by such banking organization or corporate mortgagee or department  of  such banking  organization  or corporate mortgagee to whom inquiry concerning the payoff statements are to be addressed in addition to the address  of the  banking  organization or corporation for use in connection with the affidavit under subdivision five of this section.  (d) "Banking organization" shall have the same meaning as provided  in subdivision  eleven  of section two of the banking law and shall include any institution chartered or licensed by the United States or any state.  (e) "Note" shall include any written evidence of indebtedness.