| 1 | A bill to be entitled |
| 2 | An act relating to certificates of release for mortgages; |
| 3 | creating s. 701.041, F.S.; providing definitions; |
| 4 | providing for the issuance of a certificate of release for |
| 5 | a mortgage by a title insurer or its authorized agent for |
| 6 | certain purposes; providing for recordation; specifying |
| 7 | contents of a certificate of release; requiring execution, |
| 8 | acknowledgment, and recordation of a certificate of |
| 9 | release by certain entities; providing requirements for |
| 10 | appointment of an agent for execution purposes; providing |
| 11 | for effect of a certificate of release; providing criteria |
| 12 | for recording multiple certificates of release; providing |
| 13 | application; providing an effective date. |
| 14 |
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| 15 | WHEREAS, the Legislature finds that modern trends in the |
| 16 | real estate market require that real estate closings must be |
| 17 | completed, funds disbursed, and title insurance policies issued |
| 18 | prior to the receipt by the title insurer or its authorized |
| 19 | agent, or the recording in the public records, of releases or |
| 20 | satisfactions of mortgages that have been paid, and |
| 21 | WHEREAS, in a significant number of circumstances such |
| 22 | releases or satisfactions are not presented in a timely fashion, |
| 23 | or are never presented, to the title insurer or its authorized |
| 24 | agent, and |
| 25 | WHEREAS, this situation is exacerbated by the proliferation |
| 26 | of servicing contracts and multiple assignments of mortgages, |
| 27 | and |
| 28 | WHEREAS, title insurers devote a significant amount of time |
| 29 | attempting to obtain and record releases and satisfactions of |
| 30 | mortgages that have been paid, and |
| 31 | WHEREAS, title insurers and their authorized agents |
| 32 | undertake a real and significant risk in the issuance of title |
| 33 | insurance policies without an exception for these paid mortgages |
| 34 | that have not been released or satisfied in the public records, |
| 35 | and |
| 36 | WHEREAS, it is in the public interest that an alternative |
| 37 | method be made available to title insurers and their authorized |
| 38 | agents to evidence in the public records the payment and release |
| 39 | of these mortgages, NOW, THEREFORE, |
| 40 |
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| 41 | Be It Enacted by the Legislature of the State of Florida: |
| 42 |
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| 43 | Section 1. Section 701.041, Florida Statutes, is created |
| 44 | to read: |
| 45 | 701.041 Title insurer; mortgage release certificate.-- |
| 46 | (1) DEFINITIONS.--For purposes of this section: |
| 47 | (a) "Mortgage" means a mortgage or mortgage lien on an |
| 48 | interest in real property in this state, including any |
| 49 | modifications thereof, given to secure a loan in the principal |
| 50 | amount of $500,000 or less. |
| 51 | (b) "Mortgagee" means: |
| 52 | 1. The grantee of a mortgage; or |
| 53 | 2. If a mortgage has been assigned of record, the last |
| 54 | person to whom the mortgage has been assigned of record. |
| 55 | (c) "Mortgage servicer" means the last person to whom a |
| 56 | mortgagor or the mortgagor's successor in interest has been |
| 57 | instructed by a mortgagee to send payments on a loan secured by |
| 58 | a mortgage. A person transmitting a payoff statement is the |
| 59 | mortgage servicer for the mortgage described in the payment |
| 60 | statement. |
| 61 | (d) "Mortgagor" means the grantor of a mortgage. |
| 62 | (e) "Payoff statement" means a statement of the amount of: |
| 63 | 1. The unpaid balance of a loan secured by a mortgage, |
| 64 | including principal, interest, and any other charges properly |
| 65 | due under or secured by the mortgage. |
| 66 | 2. Interest on a per-day basis for the unpaid balance. |
| 67 | (f) "Record" means to record with the clerk of the circuit |
| 68 | court or the comptroller in the county or counties in which the |
| 69 | real property securing the mortgage is located. |
| 70 | (g) "Title insurer" means a corporation or other business |
| 71 | entity authorized and licensed to transact the business of |
| 72 | insuring titles to interests in real property in this state |
| 73 | under chapter 624. |
| 74 | (2) CERTIFICATE OF RELEASE.--An officer or duly appointed |
| 75 | agent of a title insurer may, on behalf of a mortgagor or a |
| 76 | person who acquired from the mortgagor title to all or a part of |
| 77 | the property described in a mortgage, execute a certificate of |
| 78 | release that complies with the requirements of this section and |
| 79 | record the certificate of release in the real property records |
| 80 | of each county in which the mortgage is recorded if a |
| 81 | satisfaction or release of the mortgage has not been executed |
| 82 | and recorded after the date payment in full of the loan secured |
| 83 | by the mortgage was made in accordance with a payoff statement |
| 84 | furnished by the mortgagee or the mortgage servicer. |
| 85 | (3) CONTENTS.--A certificate of release executed under |
| 86 | this section must contain: |
| 87 | (a) The name of the mortgagor, the name of the original |
| 88 | mortgagee, and, if applicable, the mortgage servicer; the date |
| 89 | of the mortgage; the date of recording; and the volume and page |
| 90 | or document number in the real property records in which the |
| 91 | mortgage is recorded, together with similar information for the |
| 92 | last recorded assignment of the mortgage. |
| 93 | (b) A statement that the mortgage, including any |
| 94 | modifications thereof, was in the principal amount of $500,000 |
| 95 | or less. |
| 96 | (c) A statement that the person executing the certificate |
| 97 | of release is an officer or a duly appointed agent of a title |
| 98 | insurer authorized and licensed to transact the business of |
| 99 | insuring titles to interests in real property in this state |
| 100 | under chapter 624 or chapter 626, and, if a duly appointed |
| 101 | agent, shall further provide the recording information of the |
| 102 | appointment of such agent as required by subsection (4). |
| 103 | (d) A statement that the certificate of release is made on |
| 104 | behalf of the mortgagor or a person who acquired title from the |
| 105 | mortgagor to all or a part of the property described in the |
| 106 | mortgage. |
| 107 | (e) A statement that the mortgagee or mortgage servicer |
| 108 | provided a payoff statement which was used to make payment in |
| 109 | full of the unpaid balance of the loan secured by the mortgage. |
| 110 | (f) A statement that payment in full of the unpaid balance |
| 111 | of the loan secured by the mortgage was made in accordance with |
| 112 | the payoff statement. |
| 113 | (4) EXECUTION.-- |
| 114 | (a) A certificate of release authorized by subsection (2) |
| 115 | must be duly executed, acknowledged, and recorded and may be |
| 116 | executed by an officer of a title insurer or by a duly appointed |
| 117 | agent of a title insurer. Such delegation to an agent by a title |
| 118 | insurer shall not relieve the title insurer of any liability for |
| 119 | damages caused by its agent for the wrongful or erroneous |
| 120 | execution of a certificate of release. |
| 121 | (b) The appointment of an agent must be duly executed, |
| 122 | acknowledged, and recorded by an officer of a title insurer and |
| 123 | must state: |
| 124 | 1. The title insurer as the principal. |
| 125 | 2. The identity of the person, partnership, or corporation |
| 126 | authorized to act as agent to execute and record certificates of |
| 127 | release provided for in this section on behalf of the title |
| 128 | insurer. |
| 129 | 3. That the agent has the full authority to execute and |
| 130 | record certificates of release provided for in this section on |
| 131 | behalf of the title insurer. |
| 132 | (c) A separate appointment of agent shall not be necessary |
| 133 | for each certificate of release provided that at least one such |
| 134 | appointment is recorded in the county in which the mortgaged |
| 135 | property is located. The appointment of agent must be rerecorded |
| 136 | where necessary to establish authority of the agent, but such |
| 137 | authority shall continue until a revocation of appointment is |
| 138 | recorded in the office of the county recorder in which the |
| 139 | appointment of agent was recorded. |
| 140 | (5) EFFECT.--For purposes of releasing the mortgage, a |
| 141 | certificate of release containing the information and statements |
| 142 | provided for in subsection (3) and executed as provided in |
| 143 | subsection (4) is prima facie evidence of the facts contained in |
| 144 | the certificate, is entitled to be recorded with the county |
| 145 | recorder, and operates as a release of the mortgage described in |
| 146 | the certificate of release. The county recorder shall rely upon |
| 147 | the certificate to release the mortgage. Recording of a wrongful |
| 148 | or erroneous certificate of release by a title insurer or its |
| 149 | agent shall not relieve the mortgagor, or the mortgagor's |
| 150 | successors or assigns, from any personal liability on the loan |
| 151 | or other obligations secured by the mortgage. In addition to any |
| 152 | other remedy provided by law, a title insurer wrongfully or |
| 153 | erroneously recording a certificate of release under this |
| 154 | section shall be liable to the mortgagee for actual damage |
| 155 | sustained due to the recording of the certificate of release. |
| 156 | (6) RECORDING.--If a mortgage is recorded in more than one |
| 157 | county and a certificate of release is recorded in one of such |
| 158 | counties, a certified copy of the certificate of release may be |
| 159 | recorded in another of such counties with the same effect as the |
| 160 | original. In all cases, the certificate of release shall be |
| 161 | entered and indexed as satisfactions of mortgage are entered and |
| 162 | indexed. |
| 163 | (7) APPLICATION.--This section applies only to a mortgage, |
| 164 | including any modifications of such mortgage, in the principal |
| 165 | amount of $500,000 or less. |
| 166 | Section 2. This act shall take effect July 1, 2005. |