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. 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

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instrument. Under this option, if a secured creditor has not recorded a mortgage
satisfaction within 30 days 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 secured obligation has not been satisfied or 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. An affidavit
of satisfaction that complies with the requirements in the bill is entitled to be
recorded in the office of the register of deeds, and a recorded affidavit of satisfaction
constitutes a satisfaction of the security instrument described in the affidavit. The
bill contains penalties against a satisfaction agent who records an affidavit of
satisfaction erroneously or with knowledge that the statements in the affidavit are
false, and authorizes a satisfaction agent to charge fees for providing the notice and
preparing and executing the affidavit.

The bill sets out the right of a person who is obligated under a security
instrument to request a payoff statement from the secured creditor. The person or
his or her authorized agent may 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 must issue a payoff statement within
four days after the effective date of a notice that contains the information specified
in the bill and may not charge the person for one payoff statement in any two-month
period. The bill specifies the information that the payoff statement must contain,
and provides penalties against a secured creditor for not sending a timely payoff
statement that substantially complies with the content requirements in the bill. If
the payoff amount in a payoff statement is understated, the secured creditor may
send a corrected payoff statement, but the secured creditor is prohibited from
denying the accuracy of the payoff amount as against any person who reasonably and
detrimentally relies on the understated amount. If the secured creditor receives
payment as provided in an understated payoff statement, the secured creditor must
still record a satisfaction of the mortgage within 30 days but may recover from the
obligated party any amount that was incorrectly not included in the payoff
statement.

In addition to the security instrument satisfaction provisions, the bill specifies
acceptable methods for and the effective dates of providing notice under the bill. The

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bill also provides for the recording of a document of rescission, which rescinds an
erroneously recorded satisfaction or affidavit of satisfaction, keeping the security
instrument in force.