The term acquittance refers to a document declaring that an obligation has been fully paid.
One example of this is the satisfaction of mortgage document. This is issued when all payments on a mortgage have been completed. The lender completes this document when all payments have been made, but there are very rare instances in which a lender may choose to accept partial payment and lift obligations from the borrower.
The filing of a satisfaction of mortgage must be done immediately after all obligations have been fulfilled, with a clerk in charge of documentation on deeds. This serves as a public record that serves as proof of a clear title. As such, accuracy of information contained is paramount. Concerned parties must be furnished with copies.
The term satisfaction of mortgage is also used to refer to the act of fulfilling all mortgage obligations.
On the other hand, the term termination statement refers to a document that drops claims on collaterals and security interests once a debt has been paid. This is accomplished by the lender and is considered a public record. When a borrower takes out a loan, it is common for lenders to place a legal claim over some form of collateral, which may be the asset produced by the loan.
This lien will no longer be in effect once the loan has been fully paid, as the termination of statement issued after the payment has been made serves to clear this from public records. If the records are not properly cleared, in spite of the fulfillment of all financial obligations, this could negatively impact the borrower’s credit records.
