When an Agent Handles the Release
The lender does not always handle a mortgage payoff directly. Sometimes an attorney in fact receives the payment and signs the release. This person acts on the lender's behalf through a power of attorney.
An attorney in fact to whom the money due on a mortgage or deed of trust is paid may execute the release provided for in this article. Such acknowledgment of satisfaction or deed of release, duly acknowledged and recorded, showing the docket and page or recording number, releases the mortgage or deed of trust and revests in the mortgagor or person who executed the deed of trust, or his legal representatives, all title to the property affected by the mortgage or deed of trust.
A.R.S. § 33-708The release must reference the recording information for the original mortgage or deed of trust. A notary typically acknowledges the document before the county recorder records it.
Once recorded, the release has the same legal effect as if the lender signed it directly. Recording a sufficient release clears the lien from public records.
How This Works in Practice
The release process follows the same steps whether the lender or an agent signs. The attorney in fact records a notice of satisfaction or a reconveyance of the deed.
Under Arizona law, the release returns all title to the original borrower or their legal representatives. The lender's interest ends, and the property is free from the lien.
Relevance to Estate Settlement
This statute comes up during trust administration and probate more often than people expect. For example, a successor trustee may pay off a deceased person's mortgage. The lending institution's agent may then sign the release under a power of attorney.
These releases carry full legal authority. The key is to make sure someone properly acknowledges and records the document, just like any other mortgage release.