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OTS 4.11

4.11 ENCUMBRANCES – RELEASE OF RE-RECORDED MORTGAGES

Problem A:

When a mortgage has been re-recorded and there is a valid release by separate instrument of record making reference to the volume and page of either of the original recording or of the re-recording of the mortgage, but not both, should the mortgage be treated as having been properly released?

Standard A:

Yes, but only if such release was recorded after the re-recording of the mortgage.

Comment A:

Mortgages are re-recorded to correct clerical or scrivener’s errors, and re-recording does not alter, amend or otherwise change the obligations of the mortgagors under the mortgage. Historically, mortgages were often released by marginal notation, which clearly indicated the mortgagee’s intention to release the mortgage as recorded, and as re-recorded, since the notation of release was on the original instrument. Now, pursuant to R.C. 5301.28, county recorders may, and frequently do, require that all releases of mortgages be made by separate instrument. Those separate instruments may, in error, fail to reference the original volume and page of recording of the mortgage and/or the volumes and pages of any re-recordings thereof. Such defects in releases of mortgages being made by separate instruments do not cause the subject real estate to be considered unmarketable and an examiner may omit from his opinion reference to any such re-recorded mortgage if: (a) a release of mortgage by separate instrument correctly references either the volume and page of the recording or of any re-recording thereof, and (2) such release was recorded after all re-recordings of the mortgage. If the release was recorded before the mortgage was re-recorded, the re-recording of the mortgage may constitute an attempt by the mortgagee to assert a mortgage canceled in error, and in such an instance the re-recorded mortgage should still be identified as an encumbrance against the real property.

(Effective November 7, 2003.)

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