What is a Mortgage Affidavit?

A mortgage affidavit is a written statement signed by a party in a real estate transaction under penalties of perjury that attests to certain conditions of the property. The person signing the document is presenting information that the person knows to be true and that he would be willing to testify to if required by a court of law. Title companies often require these documents from purchasers and sellers of property supporting the legal status of the property as the parties have represented it in order to underwrite a title insurance policy.

There are few legal requirements for an effective mortgage affidavit. Most jurisdictions require all affidavits to be signed and witnessed by a third party or sworn under oath in front of a notary public. The statements made in the affidavit must be made voluntarily and are restricted to what a person knows to be true by direct knowledge or observation. A person who lies on an affidavit can be convicted of perjury in the same way as a person who lies on a witness stand can be sued by a private party that relied on the misrepresentations.

There are various types of mortgage affidavits. Since the document is basically just a statement of facts, it can be used under any circumstance involving a mortgage, whenever a party is required to provide proof of the status of the property. For example, a homeowners insurance company can require an owner to submit a mortgage affidavit attesting to the completion of construction work on the property in order to release insurance proceeds to a contractor. In certain jurisdictions, the owner of property with a reverse mortgage can submit a mortgage affidavit to the recorder of deeds to attest to the status of the mortgage, and that it is held by a person over a certain age in order to exempt the property from taxation.

One of the more common uses of a mortgage affidavit in the context of title policies is the “ancient mortgage affidavit". A title company will ask a seller to prepare this type of affidavit if there was a past mortgage on the property with no record of a satisfaction of the mortgage. Before the title company will issue an insurance policy, it requires the seller to swear that the past mortgage has been paid off and a satisfaction of mortgage was never issued. In this way, the title company is able to issue the policy while indemnifying itself against an unexpected claim.

Another common type of mortgage affidavit used by title companies is the composite mortgage affidavit. This type of affidavit is signed by both the buyer and seller. It recites a laundry list of basic representations made by the parties about the property that the title company will rely upon to issue the policy, including that there are no outstanding contracts, easements, or leases that affect the property, and that the parties are aware of any existing covenants, conditions, or restrictions.