The Illinois Mortgage Act establishes the requirements for mortgages that have been paid off, and the Mortgage Certificate of Release Act imposes additional requirements specific to mortgages on 1–4 family residential properties securing loans under $500,000.
The Illinois Mortgage Act requires that mortgagees take one of three alternative actions within thirty days after “full satisfaction and payment of all . . . sum or sums of money as are really due . . . from the mortgagor”:
- Deliver the release to the county recorder.
- 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
- 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 applies only to mortgages on 1–4 family residential properties securing loans under $500,000.
A lender that fails to complete one of these three alternatives “within 30 days after the payment of the debt secured by such mortgage” will “be liable for and pay to the party aggrieved the sum of $200 which may be recovered by the party aggrieved in a civil action, together with reasonable attorney's fees.”
For resources related to our guidance, please see:
- Illinois Mortgage Act, 765 ILCS 905/2 (“Except in the case of a mortgage that is required to be released under the Mortgage Certificate of Release Act, every mortgagee of real property . . . having received full satisfaction and payment of all such sum or sums of money as are really due to him or her from the mortgagor . . . shall make, execute and deliver to the mortgagor . . . an instrument in writing releasing such mortgage . . . or shall deliver that release to the recorder or registrar for recording or registering. If the release is delivered to the mortgagor . . . it must have imprinted on its face in bold letters at least 1/4 inch in height the following: ‘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’.”)
- Illinois Mortgage Act, 765 ILCS 905/2 (“The recorder, or registrar, upon receipt of such a release and the payment of the recording or registration fee, shall record or register the release. A certificate of release issued and recorded by a title insurance company or its duly appointed agent pursuant to the Mortgage Certificate of Release Act shall satisfy the requirements of this Section 2.”)
- Illinois Mortgage Act, 765 ILCS 905/4 (“If any mortgagee . . . of real property . . . shall not, within 30 days after the payment of the debt secured by such mortgage . . . comply with the requirements of Section 2 of this Act, he or she shall, for every such offense, be liable for and pay to the party aggrieved the sum of $200 which may be recovered by the party aggrieved in a civil action, together with reasonable attorney’s fees.”)
- Mortgage Certificate of Release Act, 765 ILCS 935/5 (“‘Mortgage’ means a mortgage or mortgage lien on an interest in one-to-four family residential real property in this State given to secure a loan in the original principal amount of less than $500,000. Trust deeds are not included.”)
- Mortgage Certificate of Release Act, 765 ILCS 935/10 (“Mortgage presently being paid off. Receipt of payment pursuant to the lender's written payoff statement shall constitute authority to record a certificate of release. A certificate of release shall be delivered for recording to the recorder of each county in which the mortgage is recorded, together with the other documents from the new transaction, including a deed or new mortgage, or both by the title insurance company or its duly appointed agent.”)