(a) Title to real property described in a mortgage held by a financial institution at the time it was declared or adjudicated to be insolvent, which mortgage was foreclosed by a party claiming to be the owner of that mortgage through or under the receiver of the failed institution, shall not be deemed to be marketable unless such mortgage was assigned of record by the receiver and by every subsequent assignee of the mortgage down to the foreclosing party. As an alternative to an assignment by the receiver to a foreclosing party, a finding by the court in the foreclosure action that the plaintiff has good title to the mortgage will suffice to establish such title, providing the receiver was named a defendant in that action.
(b) A discharge or partial release of a mortgage owned by a financial institution at the time it was declared or adjudicated to be insolvent, which discharge or partial release is given by a party claiming to be the owner of that mortgage by assignment or transfer from the receiver of the failed institution, shall be considered sufficient to discharge or partially release the mortgage referred to therein even though there is no assignment or transfer of record from the receiver to the releasor provided the recorded discharge or partial release contains a recital of the manner in which the releasor acquired ownership of such mortgage.
Comment 1. The recital set forth in a discharge or partial release executed by a party purporting to be the owner of said mortgage by an assignment or transfer from the receiver of a failed institution shall include at least the following particulars: (a) dated of execution of assignment or transfer from the receiver; (b) statement that the mortgage was not subsequently re-assigned or re¬transferred prior to date of execution of discharge or partial release.
Comment 2. Any discharge or partial release purporting to satisfy the requirements of section (b) of this title standard must should be indexed in the grantor index in the names of the failed institution, the receiver, and the releasor, respectively, and in the grantee index in the names of the releasor and the releasee (mortgagor).
History
This standard was added in 2003.