SB 290

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 actual damages plus

penalty damages of $100 for each day that the violation remains uncorrected, up to

$2,000 in penalty damages. This bill repeals those provisions and replaces them with

mortgage satisfaction provisions that are similar to the Uniform Residential

Mortgage Satisfaction Act (URMSA), except that, with the exception of affidavits of

satisfaction, the new provisions apply to all mortgages, not just mortgages on

residential property.

Under the bill, a creditor who has a security interest in real property must

record a satisfaction of the security instrument (mortgage) within 30 days after the

secured creditor receives full payment of the secured obligation or payment as

provided in a payoff statement provided by the creditor to the landowner or other

person authorized to request a payoff statement. If the creditor does not do so within

the required time, the creditor is liable to the landowner for $500, plus any actual

damages and reasonable attorney fees and court costs, but no punitive damages.

The bill provides another mortgage satisfaction option for mortgages on

residential real property: recording an affidavit of satisfaction of a security

instrument. Under this option, upon or at any time after full performance or

payment as provided in a payoff statement by the residential property owner, a

satisfaction agent authorized by the owner may give the secured creditor notice that

the satisfaction agent may record an affidavit of satisfaction of the security

instrument. Under the bill, only a title insurance company acting directly or through

an authorized agent may act as a satisfaction agent. The bill specifies the

information that must be contained in the notice that is sent to the secured creditor,

such as that the satisfaction agent has reasonable grounds to believe that the

property is residential real property and that the secured creditor has received full

payment or payment as provided in a payoff statement. After providing the notice,

the satisfaction agent may submit the affidavit of satisfaction to the register of deeds

for recording if the secured creditor authorizes the satisfaction agent to do so or if the

secured creditor does not, within 30 days after receiving the notice, record a

satisfaction. The satisfaction agent may not record the affidavit of satisfaction,

however, if the agent receives notice from the secured creditor that the security

instrument has been assigned, in which case the satisfaction agent must provide the

notice to record an affidavit of satisfaction to the assignee, or that the secured

obligation has not been satisfied, unless the satisfaction agent has reasonable

grounds to believe that a person paid an understated payoff amount on which the