Senate Bill sb1258c1

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    Florida Senate - 2005                           CS for SB 1258

    By the Committee on Banking and Insurance; and Senator Atwater





    597-1837-05

  1                      A bill to be entitled

  2         An act relating to certificates of release for

  3         mortgages; creating s. 701.041, F.S.; providing

  4         definitions; providing for the issuance of a

  5         certificate of release for a mortgage by a

  6         title insurer or its authorized agent for

  7         certain purposes; providing for recordation;

  8         specifying contents of a certificate of

  9         release; requiring execution, acknowledgment,

10         and recordation of a certificate of release by

11         certain entities; providing requirements for

12         appointment of an agent for execution purposes;

13         providing for effect of a certificate of

14         release; providing for liability of title

15         insurers under certain circumstances; providing

16         criteria for recording multiple certificates of

17         release; providing application; requiring the

18         Financial Services Commission to adopt rules

19         establishing a minimum premium charge for

20         certificates of release; repealing s. 701.05,

21         F.S., relating to failing or refusing to

22         satisfy a lien and punishment therefor;

23         providing an effective date.

24  

25         WHEREAS, the Legislature finds that modern trends in

26  the real estate market require that real estate closings must

27  be completed, funds disbursed, and title insurance policies

28  issued prior to the receipt by the title insurer or its

29  authorized agent, or the recording in the public records, of

30  releases or satisfactions of mortgages that have been paid,

31  and

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    Florida Senate - 2005                           CS for SB 1258
    597-1837-05




 1         WHEREAS, in a significant number of circumstances such

 2  releases or satisfactions are not presented in a timely

 3  fashion, or are never presented, to the title insurer or its

 4  authorized agent, and

 5         WHEREAS, this situation is exacerbated by the

 6  proliferation of servicing contracts and multiple assignments

 7  of mortgages, and

 8         WHEREAS, title insurers devote a significant amount of

 9  time attempting to obtain and record releases and

10  satisfactions of mortgages that have been paid, and

11         WHEREAS, title insurers and their authorized agents

12  undertake a real and significant risk in the issuance of title

13  insurance policies without an exception for these paid

14  mortgages that have not been released or satisfied in the

15  public records, and

16         WHEREAS, it is in the public interest that an

17  alternative method be made available to title insurers and

18  their authorized agents to evidence in the public records the

19  payment and release of these mortgages, NOW, THEREFORE,

20  

21  Be It Enacted by the Legislature of the State of Florida:

22  

23         Section 1.  Section 701.041, Florida Statutes, is

24  created to read:

25         701.041  Title insurer; mortgage release certificate.--

26         (1)  DEFINITIONS.--For purposes of this section, the

27  term:

28         (a)  "Mortgage" means a mortgage or mortgage lien on an

29  interest in real property in this state, including any

30  modifications thereof, given to secure a loan in the principal

31  

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    Florida Senate - 2005                           CS for SB 1258
    597-1837-05




 1  amount of $500,000 or less, other than a mortgage securing an

 2  open-end or revolving credit agreement.

 3         (b)  "Mortgagee" means:

 4         1.  The grantee of a mortgage; or

 5         2.  If a mortgage has been assigned of record, the last

 6  person to whom the mortgage has been assigned of record.

 7         (c)  "Mortgage servicer" means the last person to whom

 8  a mortgagor or the mortgagor's successor in interest has been

 9  instructed by a mortgagee to send payments on a loan secured

10  by a mortgage. A person transmitting a payoff statement is the

11  mortgage servicer for the mortgage described in the payment

12  statement.

13         (d)  "Mortgagor" means the grantor of a mortgage.

14         (e)  "Payoff statement" means a statement of the amount

15  of:

16         1.  The unpaid balance of a loan secured by a mortgage,

17  including principal, interest, and any other charges properly

18  due under or secured by the mortgage.

19         2.  Interest on a per-day basis for the unpaid balance.

20         (f)  "Record" means to record with the clerk of the

21  circuit court or the comptroller in the county or counties in

22  which the real property securing the mortgage is located.

23         (g)  "Title insurer" means a corporation or other

24  business entity authorized and licensed to transact the

25  business of insuring titles to interests in real property in

26  this state under chapter 624.

27         (2)  CERTIFICATE OF RELEASE.--An officer or duly

28  appointed agent of a title insurer may, on behalf of a

29  mortgagor or a person who acquired from the mortgagor title to

30  all or a part of the property described in a mortgage, execute

31  a certificate of release that complies with the requirements

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    Florida Senate - 2005                           CS for SB 1258
    597-1837-05




 1  of this section and record the certificate of release in the

 2  real property records of each county in which the mortgage is

 3  recorded if a satisfaction or release of the mortgage has not

 4  been executed and recorded after the date payment in full of

 5  the loan secured by the mortgage was made in accordance with a

 6  payoff statement furnished by the mortgagee or the mortgage

 7  servicer.

 8         (3)  CONTENTS.--A certificate of release executed under

 9  this section must contain:

10         (a)  The name of the mortgagor, the name of the

11  original mortgagee, and, if applicable, the mortgage servicer;

12  the date of the mortgage; the date of recording; and the

13  volume and page or document number in the real property

14  records in which the mortgage is recorded, together with

15  similar information for the last recorded assignment of the

16  mortgage.

17         (b)  A statement that the mortgage, including any

18  modifications thereof, was in the principal amount of $500,000

19  or less.

20         (c)  The name of the title insurer filing the

21  certificate of release, a statement that the person executing

22  the certificate of release is an officer or a duly appointed

23  agent of the title insurer, a statement that the title insurer

24  is authorized and licensed to transact the business of

25  insuring titles to interests in real property in this state

26  under chapter 624 or chapter 626, and, if executed by a duly

27  appointed agent, shall further provide the recording

28  information of the appointment of the agent as required by

29  subsection (4).

30         (d)  A statement that the certificate of release is

31  made on behalf of the mortgagor or a person who acquired title

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    Florida Senate - 2005                           CS for SB 1258
    597-1837-05




 1  from the mortgagor to all or a part of the property described

 2  in the mortgage.

 3         (e)  A statement that the mortgagee or mortgage

 4  servicer provided a payoff statement which was used to make

 5  payment in full of the unpaid balance of the loan secured by

 6  the mortgage.

 7         (f)  A statement that payment in full of the unpaid

 8  balance of the loan secured by the mortgage was made in

 9  accordance with the payoff statement and that a copy of the

10  certificate of release was sent to the mortgagee or mortgage

11  servicer that provided the payoff statement.

12         (4)  EXECUTION.--

13         (a)  A certificate of release authorized by subsection

14  (2) must be duly executed, sworn to or affirmed under penalty

15  of perjury before a notary public, and recorded and may be

16  executed by an officer of a title insurer or by a duly

17  appointed agent of a title insurer. Delegation to an agent by

18  a title insurer does not relieve the title insurer of any

19  liability for damages caused by the agent for the execution or

20  recordation of a certificate of release.

21         (b)  The appointment of an agent must be duly executed,

22  acknowledged, and recorded by an officer of a title insurer

23  and must state:

24         1.  The title insurer as the principal.

25         2.  The identity of the person, partnership, or

26  corporation authorized to act as agent to execute and record

27  certificates of release provided for in this section on behalf

28  of the title insurer.

29         3.  That the agent has the full authority to execute

30  and record certificates of release provided for in this

31  section on behalf of the title insurer.

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    Florida Senate - 2005                           CS for SB 1258
    597-1837-05




 1         (c)  A separate appointment of agent is not necessary

 2  for each certificate of release provided that at least one

 3  appointment is recorded in the county in which the mortgaged

 4  property is located. The appointment of agent must be

 5  rerecorded where necessary to establish authority of the

 6  agent, but the authority continues until a revocation of

 7  appointment is recorded in the office of the county recorder

 8  in which the appointment of agent was recorded.

 9         (d)  After recordation of a title insurer's revocation

10  of appointment in the office of the county recorder in which

11  the appointment was recorded, the agent whose appointment is

12  revoked in that county shall have no further authority to

13  execute or record certificates of release as provided in this

14  section on behalf of that title insurer with respect to any

15  mortgages recorded in that county, and no certificate of

16  release thereafter executed or recorded by that agent on

17  behalf of that title insurer shall be effective to release any

18  mortgage recorded in that county.

19         (5)  EFFECT.--For purposes of releasing the mortgage, a

20  certificate of release containing the information and

21  statements provided for in subsection (3) and executed as

22  provided in subsection (4) is entitled to be recorded with the

23  county recorder and operates as a release of the mortgage

24  described in the certificate of release. The county recorder

25  shall rely upon the certificate to release the mortgage.

26  Recording of a certificate of release by a title insurer or

27  its agent does not relieve the mortgagor, or the mortgagor's

28  successors or assigns, from any personal liability on the loan

29  or other obligations secured by the mortgage. A certificate of

30  release recorded under this section fulfills any other

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    Florida Senate - 2005                           CS for SB 1258
    597-1837-05




 1  obligation of the mortgagee or mortgage servicer to file a

 2  satisfaction or release of the mortgage.

 3         (6)  LIABILITY OF TITLE INSURER.--

 4         (a)  In addition to any other remedy provided by law, a

 5  title insurer recording a certificate of release under this

 6  section is liable to the holder of the obligation secured by

 7  the mortgage for actual damage sustained due to the recording

 8  of the certificate of release. Reasonable costs and attorneys'

 9  fees shall be awarded to the prevailing party.

10         (b)  The title insurer named in a certificate of

11  release filed by a duly appointed agent is liable under this

12  subsection without regard to whether the title insurer

13  authorized the specific certificate of release recorded by the

14  agent.

15         (c)  The title insurer has no liability under this

16  subsection if the title insurer shows that payment in full of

17  the unpaid balance of the loan secured by the mortgage was

18  made in accordance with the payoff statement furnished by the

19  mortgagee or the mortgage servicer.

20         (d)  Liability of a title insurer under this section

21  shall be considered to be a title insurance claim on real

22  property in this state under s. 627.7865.

23         (7)  RECORDING.--If a mortgage is recorded in more than

24  one county and a certificate of release is recorded in one of

25  the counties, a certified copy of the certificate of release

26  may be recorded in another of the counties with the same

27  effect as the original. In all cases, the certificate of

28  release shall be entered and indexed as satisfactions of

29  mortgage are entered and indexed.

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    Florida Senate - 2005                           CS for SB 1258
    597-1837-05




 1         (8)  APPLICATION.--This section applies only to a

 2  mortgage, including any modifications of the mortgage, in the

 3  principal amount of $500,000 or less.

 4         (9)  PREMIUM.--The Financial Services Commission shall

 5  adopt rules establishing a minimum premium charge to be made

 6  for each certificate of release recorded under this section.

 7         Section 2.  Section 701.05, Florida Statutes, is

 8  repealed.

 9         Section 3.  This act shall take effect July 1, 2005.

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    Florida Senate - 2005                           CS for SB 1258
    597-1837-05




 1          STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
                       COMMITTEE SUBSTITUTE FOR
 2                         Senate Bill 1258

 3                                 

 4  The committee substitute revises requirements regarding the
    content and filing of a certificate of release. Open-end or
 5  revolving credit agreements are exempt from the requirement
    that a certificate of release cannot be executed for mortgage
 6  that has a principal amount over $500,000. The certificate
    must include specified information. A copy of the certificate
 7  of release must be sent to the mortgagee or mortgage services
    company that provided the payoff statement. A certificate of
 8  release must be sworn to or affirmed under penalty of perjury
    before a notary public.
 9  
    The CS specifies that a certificate of release fulfills any
10  other obligation of the mortgagee or mortgage servicer to file
    a satisfaction or release of mortgage.
11  
    The CS repeals s. 701.05, F.S., which states that any person
12  entitled to and receiving payment for money due upon a
    mortgage, lien, or judgement who fails for 30 days after
13  written demand was made to cancel and satisfy of record the
    mortgage is guilty of a second degree misdemeanor.
14  
    A title insurer is liable to the holder of the obligation
15  secured by the mortgage for actual damage sustained due to the
    recording of a certificate of release. However, a title
16  insurer has no liability under this section if the title
    insurer shows that payment in full of the unpaid balance of
17  the loan secured by the mortgage was made in accordance with
    payoff statement furnished by the mortgagee or mortgage
18  servicer.

19  The committee substitute specifies that once a title insurer
    has recorded a revocation of appointment (of an authorized
20  agent) with the office of the county recorder in which the
    appointment was recorded, the agent has no further authority
21  to execute or record a certificate of release in that county.
    The title insurer named in a certificate of release filed by a
22  duly appointed agent is liable for damages regardless of
    whether the title insurer authorized the specific certificate
23  of release recorded by the agent.

24  The CS requires the Financial Services Commission to adopt
    rules establishing a minimum premium charge to be made for a
25  certificate of release.

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