Monkey Off Your Back

Banks today are facing a determined opposition, there are countless loans that have turned sour and the collateral offered for them is either completely useless or lies unsold  for want of buyers. But let us shift our focus for a second and take a look at those that stayed true to their word and have paid of their dues on time. What would happen to the properties mortgaged by them? Can they directly claim ownership or do they have to abide by some legal procedures?

In order to claim ownership of a mortgaged property post repayment of the loan, you would have to execute a deed known as the ‘release deed’. A release deed is a deed that states that the property mortgaged is no longer under the ownership of the lender as the charge created against it has been settled in a full and final settlement . Investopedia defines a release deed as,

“A legal document that removes a previous claim or lien on an asset. A deed of release is usually issued once a mortgage or other type of debt, previously secured against the asset, has been paid in full. After the deed of release is written, the asset is owned free and clear by the owner, and any previous claims against the asset that the lender may have had are dissolved”.

Some of the salient points of a release deed are as follows:

• Name and address of the mortgagor and mortgagee.
• Date on which the agreement is entered into.
• The fact that a charge was created on the property in question in favour of the mortgagee in order to procure a loan.
• The fact that the loan has since been settled including interest, if any.
• The mortgagee has now agreed to release the property from its charge and transfer its ownership back to the mortgagor.

So, the next time you clear off you home loan or car loan, remember to obtain the ‘release deed’ from  the lender.