2011 - 2012 LEGISLATURE
November 23, 2011 - Introduced by Representative D. Cullen, cosponsored by
Senator Risser. Referred to Committee on Financial Institutions.
AB390,1,2
1An Act to repeal 706.05 (9) and (10); and
to create 708.15 of the statutes;
2relating to: mortgage satisfaction.
Analysis by the Legislative Reference Bureau
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
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
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.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB390, s. 1
1Section
1. 706.05 (9) and (10) of the statutes are repealed.
AB390, s. 2
2Section
2. 708.15 of the statutes is created to read:
AB390,3,3
3708.15 Mortgage satisfaction. (1) Definitions. In this section:
AB390,3,84
(a) "Address for giving a notification" means, for the purpose of a particular
5type of notification, the most recent address provided in a document by the intended
6recipient of the notification to the person giving the notification, unless the person
7giving the notification knows of a more accurate address, in which case the term
8means that address.
AB390,3,99
(b) "Day" means calendar day.
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(c) "Document" means information that is inscribed on a tangible medium or
11that is stored in an electronic or other medium and is retrievable in perceivable form.
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(d) "Electronic" means relating to technology having electrical, digital,
13magnetic, wireless, optical, electromagnetic, or similar capabilities.
AB390,3,1614
(e) "Entitled person" means a person liable for payment or performance of the
15obligation secured by the real property described in a security instrument, or the
16landowner.
AB390,3,1817
(f) "Good faith" means honesty in fact and the observance of reasonable
18commercial standards of fair dealing.
AB390,4,3
1(g) "Landowner" or "owner" means a person that, before foreclosure, has the
2right of redemption in the real property described in a security instrument. The term
3does not include a person that holds only a lien on the real property.
AB390,4,54
(h) "Notification" means a document containing information required under
5this section and signed by the person required to provide the information.
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(i) "Payoff amount" means the sum necessary to satisfy a secured obligation.
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(j) "Payoff statement" means a document containing the information specified
8in sub. (3) (d).
AB390,4,129
(k) "Person" means an individual, corporation, business trust, estate, trust,
10partnership, limited liability company, association, joint venture, public corporation,
11government, or governmental subdivision, agency, or instrumentality, or any other
12legal or commercial entity.
AB390,4,1513
(L) "Recording data" means the date, document number, volume and page
14number, if any, that indicate where a document is recorded in the office of the register
15of deeds under s. 59.43.
AB390,4,1816
(m) "Residential real property" means real property located in this state that
17is used primarily for personal, family, or household purposes and is improved by one
18to 4 dwelling units.
AB390,4,2319
(n) "Secured creditor" means a person that holds or is the beneficiary of a
20security interest or that is authorized both to receive payments on behalf of a person
21that holds a security interest and to record a satisfaction of the security instrument
22upon receiving full performance of the secured obligation. The term does not include
23a trustee under a security instrument.
AB390,4,2524
(o) "Secured obligation" means an obligation the payment or performance of
25which is secured by a security interest.
AB390,5,4
1(p) "Security instrument" means an agreement, however denominated, that
2creates or provides for an interest in real property to secure payment or performance
3of an obligation, whether or not it also creates or provides for a lien on personal
4property.
AB390,5,65
(q) "Security interest" means an interest in real property created by a security
6instrument.
AB390,5,87
(r) "Sign" means, with present intent to authenticate or adopt a document, any
8of the following:
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1. To execute or adopt a tangible symbol.
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2. To attach to or logically associate with the document an electronic sound,
11symbol, or process.
AB390,5,1412
(s) "State" means a state of the United States, the District of Columbia, Puerto
13Rico, the United States Virgin Islands, or any territory or insular possession subject
14to the jurisdiction of the United States.
AB390,5,1715
(t) "Submit for recording" means to deliver, with required fees and taxes, a
16document sufficient to be recorded under this section, to the office of the register of
17deeds under s. 59.43.
AB390,5,1918
(u) "Title insurance company" means an organization authorized to conduct the
19business of insuring titles to real property in this state.
AB390,5,21
20(2) Notification: manner of giving and effective date. (a) A person gives a
21notification by doing any of the following:
AB390,5,2422
1. Depositing it with the U.S. Postal Service with 1st class postage paid or with
23a commercially reasonable delivery service with cost of delivery provided, properly
24addressed to the recipient's address for giving a notification.
AB390,6,3
12. Sending it by facsimile transmission, electronic mail, or other electronic
2transmission to the recipient's address for giving a notification, but only if the
3recipient agreed to receive notification in that manner.
AB390,6,54
3. Causing it to be received at the address for giving a notification within the
5time that it would have been received if given in the manner provided in subd. 1.
AB390,6,66
(b) A notification is effective at any of the following times:
AB390,6,87
1. The day after it is deposited with a commercially reasonable delivery service
8for overnight delivery.
AB390,6,119
2. Three days after it is deposited with the U.S. Postal Service, with 1st class
10mail with postage prepaid, or with a commercially reasonable delivery service for
11delivery other than by overnight delivery.
AB390,6,1212
3. The day it is given, if given as provided in par. (a) 2.
AB390,6,1413
4. The day it is received, if given by a method other than as provided in par. (a)
141. or 2.
AB390,6,1815
(c) If this section or a notification given under this section requires performance
16on or by a certain day and that day is a Saturday, Sunday, or legal holiday under the
17laws of this state or the United States, the performance is sufficient if performed on
18the next day that is not a Saturday, Sunday, or legal holiday.
AB390,6,23
19(3) Payoff statement: request and content. (a) An entitled person, or an agent
20authorized by an entitled person to request a payoff statement, may give to the
21secured creditor a notification requesting a payoff statement for a specified payoff
22date not more than 30 days after the notification is given. The notification must
23contain all of the following:
AB390,6,2424
1. The entitled person's name.
AB390,7,3
12. If given by a person other than an entitled person, the name of the person
2giving the notification and a statement that the person is an authorized agent of the
3entitled person.
AB390,7,54
3. A direction whether the statement is to be sent to the entitled person or that
5person's authorized agent.
AB390,7,86
4. The address, facsimile transmission number, or electronic mail or other
7electronic transmission address to which the secured creditor must send the
8statement.
AB390,7,109
5. Sufficient information to enable the secured creditor to identify the secured
10obligation and the real property encumbered by the security interest.
AB390,7,1411
(b) If a notification under par. (a) directs the secured creditor to send the payoff
12statement to a person identified as an authorized agent of the entitled person, the
13secured creditor must send the statement to the agent, unless the secured creditor
14knows that the entitled person has not authorized the request.
AB390,7,1815
(c) 1. Except as provided in subd. 2., within 4 days after the effective date of a
16notification that complies with par. (a), the secured creditor shall issue a payoff
17statement and send it as directed under par. (a) 3. in the manner prescribed in sub.
18(2) for giving a notification.
AB390,7,2319
2. If the person to whom the notification is given once held an interest in the
20secured obligation but has since assigned that interest, the person need not send a
21payoff statement but shall, within 4 days after the effective date of the notification,
22give a notification of the assignment to the person to whom the payoff statement
23otherwise would have been sent, providing the name and address of the assignee.
AB390,7,2524
3. A secured creditor that sends a payoff statement to the entitled person or the
25authorized agent may not claim that the notification did not satisfy par. (a).
AB390,8,1
1(d) A payoff statement must contain all of the following:
AB390,8,42
1. The date on which it was prepared and the payoff amount as of that date,
3including the amount by type of each fee, charge, or other sum included within the
4payoff amount.
AB390,8,65
2. The information reasonably necessary to calculate the payoff amount as of
6the requested payoff date, including the per diem interest amount.
AB390,8,97
3. The payment cutoff time, if any, the address or place where payment,
8including payment by electronic transmission, if available, must be made, and any
9limitation as to the authorized method of payment.
AB390,8,1110
(e) A payoff statement may contain the amount of any fees authorized under
11this subsection not included in the payoff amount.
AB390,8,1712
(f) A secured creditor may not qualify a payoff amount or state that it is subject
13to change before the payoff date unless the payoff statement provides information
14sufficient to permit the entitled person or the person's authorized agent to request
15an updated payoff amount at no charge and to obtain that updated payoff amount
16during the secured creditor's normal business hours on the payoff date or the
17immediately preceding business day.
AB390,8,2218
(g) A secured creditor must provide upon request one payoff statement without
19charge during any 2-month period. A secured creditor may charge a fee of $25 for
20each additional payoff statement requested during that 2-month period. However,
21a secured creditor may not charge a fee for providing an updated payoff amount
22under par. (f) or a corrected payoff statement under sub. (4) (a).
AB390,9,423
(h) Except as otherwise provided in sub. (7), if a secured creditor to which a
24notification has been given under par. (a) does not send a timely payoff statement
25that substantially complies with par. (d), the secured creditor is liable to the entitled
1person for any actual damages caused by the failure plus $500, but not punitive
2damages. A secured creditor that does not pay the damages provided in this
3paragraph within 30 days after receipt of a notification demanding payment may
4also be liable for reasonable attorney fees and costs.
AB390,9,10
5(4) Understated payoff statement: correction; effect. (a) If a secured
6creditor determines that the payoff amount it provided in a payoff statement was
7understated, the secured creditor may send a corrected payoff statement. If the
8entitled person or the person's authorized agent receives and has a reasonable
9opportunity to act upon a corrected payoff statement before making payment, the
10corrected statement supersedes an earlier statement.
AB390,9,1411
(b) Subject to par. (c) 1., a secured creditor that sends a payoff statement
12containing an understated payoff amount may not deny the accuracy of the payoff
13amount as against any person that reasonably and detrimentally relies upon the
14understated payoff amount.
AB390,9,1515
(c) This section does not do any of the following:
AB390,9,1716
1. Affect the right of a secured creditor to recover any sum that it did not include
17in a payoff amount from any person liable for payment of the secured obligation.
AB390,9,1918
2. Limit any claim or defense that a person liable for payment of a secured
19obligation may have under law other than this section.
AB390,9,25
20(5) Secured creditor to submit satisfaction for recording; liability for
21failure. (a) A secured creditor shall submit for recording a satisfaction of a security
22instrument within 30 days after the secured creditor receives full payment or
23performance of the secured obligation or payment as provided in a payoff statement
24under sub. (3) or a corrected payoff statement under sub. (4), whichever is applicable.
25If a security instrument secures a line of credit or future advances, the secured
1obligation is fully performed only if, in addition to full payment or performance of the
2secured obligation or payment as provided in a payoff statement under sub. (3) or a
3corrected payoff statement under sub. (4), the secured creditor has received a
4notification requesting the secured creditor to terminate the line of credit or
5containing a statement sufficient to terminate the effectiveness of the provision for
6future advances in the security instrument.
AB390,10,117
(b) Except as otherwise provided in sub. (7), a secured creditor that is required
8to submit a satisfaction of a security instrument for recording and that does not do
9so by the end of the period specified in par. (a) is liable to the landowner for $500, plus
10any actual damages caused by the failure, but not punitive damages, and any
11reasonable attorney fees and court costs incurred.
AB390,10,1812
(c) Paragraph (b) applies to a secured creditor that receives full payment or
13performance of the secured obligation or payment as provided in a payoff statement
14under sub. (3) or a corrected payoff statement under sub. (4) on or after the effective
15date of this paragraph .... [LRB inserts date]. Section 706.05 (9) and (10), 2009 stats.,
16applies to a secured creditor that received partial or full payment or performance of
17the secured obligation before the effective date of this paragraph .... [LRB insert
18date].
AB390,10,20
19(6) Form and effect of satisfaction. A document is a satisfaction of a security
20instrument if it satisfies s. 706.05 (8).
AB390,10,22
21(7) Limitation of secured creditor's liability. A secured creditor is not liable
22under this section if all of the following apply:
AB390,10,2423
(a) The secured creditor established a reasonable procedure to achieve
24compliance with its obligations under this section.
AB390,10,2525
(b) The secured creditor complied with that procedure in good faith.
AB390,11,2
1(c) The secured creditor was unable to comply with its obligations because of
2circumstances beyond its control.
