Security Instruments in Pennsylvania

Overview

Mortgages are the only type of Security Instrument for real property recognized in Pennsylvania. They are recorded in the Recorder of Deeds Office in most counties. Mortgages in Pennsylvania are similar to Mortgages in most other states where they are commonly used.

Sources

21 P.S. § 621 et seq.

Compliance

While not strictly prohibited, agents in Pennsylvania should avoid drafting mortgages in connection with any transaction they are insuring due to the complex nature of such documents. Drafting mortgages outside of insured transactions is considered the unauthorized practice of law.

It should be noted that it is common practice for lenders to require agents to attach legal descriptions to the already prepared mortgages sent as part of closing packages. This is not prohibited.

Forms

There is no statutory form of Mortgage proscribed for use in Pennsylvania. The language used in forms is based primarily on the Common Law with additional language based on statutory requirements.

Like many other states, Pennsylvania allows lenders and others to record a "short form" mortgage by referring to a recorded template containing all of the standard mortgage provisions. 21 P.S. § 630. This was intended to reduce the amount of paperwork for new mortgages based on the same form, but is seldom used.

Search

Mortgage are recorded in the Public Land Records Office in Pennsylvania at the county level. In most counties this office is called the Recorder of Deeds.

Examination

Any mortgage that is still open of record in any search should be listed on any Title Report or Commitment. There are no other methods for clearing older mortgages except any rules adopted by Underwriting.

Underwriting

Many underwriters have adopted a rule that a mortgage can be cleared in Pennsylvania 21 years after the maturity date of the mortgage. This is based on rule of evidence regarding the presumption of payment and is not statutorily based. It has been adopted as a guideline based on the reduced risk.

Recording

Mortgages are recorded in the Public Land Records Office in Pennsylvania at the county level. In most counties this office is called the Recorder of Deeds. Mortgages should be recorded as quickly as possible after closing. For purchases or any changes in how a property is titled using a Deed, the Mortgage should be recorded immediately after the Deed.

There are no taxes associated with recording Mortgages in Pennsylvania.

Pricing

Agents are not permitted to charge any fees for preparing mortgages. The only fees permitted are pass-through fees for recording the Mortgage itself based on the cost charged by the Record of Deeds.

Types

Common Law
Short Form

Content

Common Law
Statutory

Duration

Pennsylvania does not have a statutory expiration period for Mortgages.
- Note: See Underwriting above.

Execution Requirements

Like Security Instruments in other states, Mortgages in Pennsylvania must be executed and acknowledged by every party that is in title to the property at the time it is executed. There are no witnesses required although many mortgages contain signature lines for witnesses. Witnesses can be used to "Probate" a mortgage in the absence of a valid acknowledgement.

Satisfaction

Security Instruments in Pennsylvania are satisfied by recording a document which typically titled as a Satisfaction or Satisfaction Piece. In prior decades, security instruments were satisfied by a stamp and signature from a representative of the lender coming into the land records office and physically stamping and signing that a security instrument was paid in full in the margin of the first page of the recorded mortgage. Many lenders will accidentally recorded a Release of Mortgage instead of a Satisfaction when a mortgage has been paid in full.

Settlement Officer who is a licensed title agent, employee of an underwriter or Pennsylvania licensed attorney who conducted closing or directly supervised closing through which Mortgage was paid off may satisfy. "Mortgage Satisfaction Act" (Act 197 of 2002 - effective 2/7/03)

Trustees

Pennsylvania only uses Mortgages and not Deeds of Trust, so no Trustee is required on any Security Instruments.

Vendor Liens

Seller Take-Back Mortgages.