Because your institution has taken responsibility for recording mortgage releases, we believe that you should record the releases within one month after a mortgage loan has been paid off. Other options are to deliver mortgage releases to your customers or, for certain mortgages, to permit title insurance companies to record the releases.

The Illinois Mortgage Act requires that mortgagees take one of three alternative actions after a mortgage loan is paid off. 765 ILCS 905/2. Within one month after the mortgage is paid off, the mortgagee must take one of the following actions:

1. Deliver the release to the county recorder.

2. Deliver the release to the mortgagor, with the following statutory notice, on its face in bold letters at least 1/4 inch in height:

FOR THE PROTECTION OF THE OWNER, THIS RELEASE SHALL BE FILED WITH THE RECORDER OR THE REGISTRAR OF TITLES IN WHOSE OFFICE THE MORTGAGE OR DEED OF TRUST WAS FILED

3. Or, permit the title insurance company to file a “certificate of release” with the county recorder under the Mortgage Certificate of Release Act — but this option is applicable only to mortgages on 1–4 family residential properties securing loans under $500,000.

Failure to complete one of the three alternatives “within one month after the payment of the debt secured by such mortgage” will result in liability for $200 and attorney’s fees.  765 ILCS 905/4. To avoid that liability, your institution should be recording mortgage releases or deliver mortgage releases to your customers within one month after a mortgage loan is paid off. When permitted, you may also permit title insurance companies to record the release, but that option applies only to mortgages on 1–4 family residential properties securing loans under $500,000.