Bulletin: VA000017

Dear Associates:

Effective July 1, 2002, a settlement agent who pays off a deed of trust or mortgage on Virginia property may release the lien of the deed of trust or mortgage by following the specific procedures enacted as a change to Virginia Code §55-66.3. To do so, the settlement agent must:

1. Send to the lien creditor, by certified mail or guaranteed overnight delivery, a notice of intent to release the lien. The notice may be sent with payment in full, or subsequently, and must be accompanied by a copy of the payoff statement and a copy of the release or certificate of satisfaction.

2. Include in the Notice of Intent to Release the name of the lien creditor of record, the name of the servicer (if any), date of the notice, the name, address, telephone number, and CRESPA registration number of the settlement agent. The Notice should be in substantially the form prescribed by the statute, a copy of which is available through the references section at the end of this bulletin.

After ninety days, the settlement agent may then proceed to file the certificate of satisfaction or release unless the lien creditor has, by certified mail or guaranteed overnight delivery, either:

1. Notified the settlement agent that the release has been recorded in the clerk's office of the circuit court in the county or city in which the property is located;

2. Notified the settlement agent that the debt, note, or obligation has not been paid in full; or,

3. Notified the settlement agent that the creditor otherwise objects to the release of the lien by the settlement agent.

If none of the aforesaid notices are received, the settlement agent may record the certificate of satisfaction together with a copy of the notice sent to the creditor, AND an affidavit which must be in substantially the form, a copy of which is available through the references section at the end of this bulletin. (NOTE: "Satisfactory evidence of payment," as referenced in the Affidavit available through the forms references at the end of this bulletin, is defined as either: (1) the canceled check, payable to the lien creditor or servicer, with all endorsements shown thereon; (2) written or electronic confirmation of a wire transfer to the bank account of the lien creditor; or, (3) a bank statement showing a debit for the check or wire transfer; AND, in addition to one of the preceding, a payoff statement or other evidence that the payment was in satisfaction of the mortgage or deed of trust being released by the settlement agent.)

Upon recordation, the lien should be considered as released as though the certificate of satisfaction had been signed by the noteholder, and subsequent transactions may be insured without exception.

IMPORTANT: The Settlement Agent Release is valid only for full releases of mortgages and/or deeds of trust on one-to-four family residential property. It is not valid for releases on commercial property or construction loans, and may not be used for any partial release of mortgages/deeds of trust.

The Act applies to any qualifying mortgage or deed of trust, whether created and recorded before or after the effective date of July 1, 2002.

A settlement agent releasing a lien under the Act may not take an assignment from a borrower of the right to collect the $500.00 penalty prescribed in §55-66.3(A), assessed against a lien creditor who fails to provide a release of lien within ninety days of payment in full.

This is an optional procedure, and a settlement agent who chooses not to release a lien in accordance with the Act incurs no liability to the borrower, the creditor, or any successor in interest to either.