The Wisconsin legislature has introduced a bill that would wipe out its current mortgage satisfaction act in favor of legislation similar to the Uniform Residential Mortgage Satisfaction Act (URMSA), written by the Uniform Law Commission.
The bill, AB 390, was introduced by Rep. David Cullen, D-Milwaukee.
Under current law, the holder of any type of mortgage is required to record a satisfaction of mortgage within 30 days after the mortgagor completes full performance of the conditions of the mortgage. However, if the mortgage is fully performed and the mortgage holder receives by certified mail a written request from the mortgagor for a full satisfaction, the mortgage holder must record a satisfaction of mortgage within seven days or is liable to the mortgagor for the actual damages plus penalty damages of $100 for each day that the violation remains uncorrected, up to $2,000 in penalty damages.
AB 390 would repeal these provisions and replaces them with mortgage satisfaction provisions that are similar to URMSA, except that, with the exception of affidavits of satisfaction, the new provisions would apply to all mortgages, not just mortgages on residential property.
Under the bill, a creditor who has a security interest in real property would have to record a satisfaction of the security instrument within 30 days after the secured creditor received full payment of the secured obligation or payment as provided in a payoff statement provided by the creditor to the landowner. If the creditor did not do so within the required time, the creditor would be liable to the landowner for $500, plus any actual damages and reasonable attorney fees and court costs, but no punitive damages.
It also provided for the satisfaction of a residential mortgage by recording an affidavit of satisfaction of a security instrument. According to the bill, if a secured creditor did not record a mortgage satisfaction within 30 days after full performance or payment as provided in a payoff statement by the residential property owner, a title agent could act as satisfaction agent and record an affidavit of satisfaction of the security instrument.
The bill provides that the agent must notify the creditor of the affidavit of satisfaction. The notice must include:
- The identity and mailing address of the agent;
- Identification of the security instrument for which a recorded satisfaction is sought, including the names of the original parties to the security instrument;
- A statement that the agent has reasonable grounds to believe: that the real property described in the security instrument in residential real property; that the person to which the notification is being given is the secured creditor; and that the secured creditor has received full payment or performance of the secured obligation as provided in a payoff statement;
- A statement that the agent may sign and submit for recording an affidavit of satisfaction of the security instrument unless, within 30 days after the effective date of the notification: the creditor submits a satisfaction of the security instrument for recording; the agent receives a notification stating that the secured creditor has assigned the security instrument and identifying the name and address of the assignee; or the agent receives notification stating that the obligation remains unsatisfied.
After providing the notice, the title agent could submit the affidavit of satisfaction to the register of deeds for recording if the secured creditor authorizes the agent to do so or if the secured creditor does not, within 30 days after receiving the notice, record a satisfaction. The agent would be prohibited from recording the affidavit if the agent received notice that the mortgage had not been satisfied or that the security instrument had been assigned, in which case the agent would have to provide the notice to record an affidavit of satisfaction to the assignee. A properly executed affidavit of satisfaction would constitute a satisfaction of the security instrument.
Title agents who record an affidavit of satisfaction erroneously or with knowledge that the statements in the affidavit are false would be liable to the secured creditor for any actual damages caused by the recording and reasonable attorney fees and costs. The agent would not be liable if the agent properly complied with the provisions of the act.
A person obligated under a mortgage would be permitted to request a payoff statement from the secured creditor. They would be allowed to give notice to the secured creditor requesting a payoff statement for a specified payoff date that is not more than 30 days from the date the notice is given. The secured creditor would be required to issue a payoff statement within four days after the effective date of a notice that contains the information specified in the bill and could not charge the person for one payoff statement in any two-month period. The payoff statement would have to contain the following:
- The entitled person’s name;
- The name of the person giving the notification and a statement that the person is an authorized agent of the entitled person;
- A direction whether the statement is to be sent to the entitled person or that person’s authorized agent;
- The address, fax number, or email address to which the secured creditor must send the statement;
- Sufficient information to enable the creditor to identify the secured obligation and the real property encumbered by the security interest.
If the payoff amount in the payoff statement is understated, the secured creditor could send a corrected payoff statement, but the secured creditor would be prohibited from denying the accuracy of the payoff amount as against any person who reasonably and detrimentally relied on the understated amount. If the secured creditor received payment as provided in an understated payoff statement, the secured creditor would still be required to record a satisfaction of the mortgage within 30 days but could recover from the obligated party any amount that was incorrectly not included in the payoff statement.