| 1 | The Justice Council recommends the following: |
| 2 |
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| 3 | Council/Committee Substitute |
| 4 | Remove the entire bill and insert: |
| 5 | A bill to be entitled |
| 6 | An act relating to certificates of release for mortgages; |
| 7 | creating s. 701.041, F.S.; providing definitions; |
| 8 | providing for the issuance of a certificate of release for |
| 9 | a mortgage by a title insurer or its authorized agent for |
| 10 | certain purposes; providing for recordation; specifying |
| 11 | contents of a certificate of release; requiring execution, |
| 12 | acknowledgment, and recordation of a certificate of |
| 13 | release by certain entities; providing requirements for |
| 14 | appointment of an agent for execution purposes; providing |
| 15 | for effect of a certificate of release; providing for |
| 16 | liability of title insurers under certain circumstances; |
| 17 | providing criteria for recording multiple certificates of |
| 18 | release; providing application; requiring the Financial |
| 19 | Services Commission to adopt rules establishing an |
| 20 | actuarially sound premium charge for certificates of |
| 21 | release; repealing s. 701.05, F.S., relating to failing or |
| 22 | refusing to satisfy a lien and punishment therefor; |
| 23 | providing an effective date. |
| 24 |
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| 25 | WHEREAS, the Legislature finds that modern trends in the |
| 26 | real estate market require that real estate closings must be |
| 27 | completed, funds disbursed, and title insurance policies issued |
| 28 | prior to the receipt by the title insurer or its authorized |
| 29 | agent, or the recording in the public records, of releases or |
| 30 | satisfactions of mortgages that have been paid, and |
| 31 | WHEREAS, in a significant number of circumstances such |
| 32 | releases or satisfactions are not presented in a timely fashion, |
| 33 | or are never presented, to the title insurer or its authorized |
| 34 | agent, and |
| 35 | WHEREAS, this situation is exacerbated by the proliferation |
| 36 | of servicing contracts and multiple assignments of mortgages, |
| 37 | and |
| 38 | WHEREAS, title insurers devote a significant amount of time |
| 39 | attempting to obtain and record releases and satisfactions of |
| 40 | mortgages that have been paid, and |
| 41 | WHEREAS, title insurers and their authorized agents |
| 42 | undertake a real and significant risk in the issuance of title |
| 43 | insurance policies without an exception for these paid mortgages |
| 44 | that have not been released or satisfied in the public records, |
| 45 | and |
| 46 | WHEREAS, it is in the public interest that an alternative |
| 47 | method be made available to title insurers and their authorized |
| 48 | agents to evidence in the public records the payment and release |
| 49 | of these mortgages, NOW, THEREFORE, |
| 50 |
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| 51 | Be It Enacted by the Legislature of the State of Florida: |
| 52 |
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| 53 | Section 1. Section 701.041, Florida Statutes, is created |
| 54 | to read: |
| 55 | 701.041 Title insurer; mortgage release certificate.-- |
| 56 | (1) DEFINITIONS.--For purposes of this section: |
| 57 | (a) "Mortgage" means a mortgage or mortgage lien on an |
| 58 | interest in real property in this state, including any |
| 59 | modifications thereof, given to secure a loan in the principal |
| 60 | amount of $500,000 or less, other than a mortgage securing an |
| 61 | open-end or revolving credit agreement. |
| 62 | (b) "Mortgagee" means: |
| 63 | 1. The grantee of a mortgage; or |
| 64 | 2. If a mortgage has been assigned of record, the last |
| 65 | person to whom the mortgage has been assigned of record. |
| 66 | (c) "Mortgage servicer" means the last person to whom a |
| 67 | mortgagor or the mortgagor's successor in interest has been |
| 68 | instructed by a mortgagee to send payments on a loan secured by |
| 69 | a mortgage. A person transmitting a payoff statement is the |
| 70 | mortgage servicer for the mortgage described in the payment |
| 71 | statement. |
| 72 | (d) "Mortgagor" means the grantor of a mortgage. |
| 73 | (e) "Payoff statement" means a statement of the amount of: |
| 74 | 1. The unpaid balance of a loan secured by a mortgage, |
| 75 | including principal, interest, and any other charges properly |
| 76 | due under or secured by the mortgage. |
| 77 | 2. Interest on a per-day basis for the unpaid balance. |
| 78 | (f) "Record" means to record with the clerk of the circuit |
| 79 | court or the comptroller in the county or counties in which the |
| 80 | real property securing the mortgage is located. |
| 81 | (g) "Title insurer" means a corporation or other business |
| 82 | entity authorized and licensed to transact the business of |
| 83 | insuring titles to interests in real property in this state |
| 84 | under chapter 624. |
| 85 | (2) CERTIFICATE OF RELEASE.--An officer or duly appointed |
| 86 | agent of a title insurer may, on behalf of a mortgagor or a |
| 87 | person who acquired from the mortgagor title to all or a part of |
| 88 | the property described in a mortgage, execute a certificate of |
| 89 | release that complies with the requirements of this section and |
| 90 | record the certificate of release in the real property records |
| 91 | of each county in which the mortgage is recorded if a |
| 92 | satisfaction or release of the mortgage has not been executed |
| 93 | and recorded after the date payment in full of the loan secured |
| 94 | by the mortgage was made in accordance with a payoff statement |
| 95 | furnished by the mortgagee or the mortgage servicer. |
| 96 | (3) CONTENTS.--A certificate of release executed under |
| 97 | this section must contain: |
| 98 | (a) The name of the mortgagor, the name of the original |
| 99 | mortgagee, and, if applicable, the mortgage servicer; the date |
| 100 | of the mortgage; the date of recording; and the volume and page |
| 101 | or document number in the real property records in which the |
| 102 | mortgage is recorded, together with similar information for the |
| 103 | last recorded assignment of the mortgage. |
| 104 | (b) A statement that the mortgage, including any |
| 105 | modifications thereof, was in the principal amount of $500,000 |
| 106 | or less. |
| 107 | (c) The name of the title insurer filing the certificate |
| 108 | of release, a statement that the person executing the |
| 109 | certificate of release is an officer or a duly appointed agent |
| 110 | of the title insurer, a statement that the title insurer is |
| 111 | authorized and licensed to transact the business of insuring |
| 112 | titles to interests in real property in this state under chapter |
| 113 | 624 or chapter 626, and, if executed by a duly appointed agent, |
| 114 | shall further provide the recording information of the |
| 115 | appointment of such agent as required by subsection (4). |
| 116 | (d) A statement that the certificate of release is made on |
| 117 | behalf of the mortgagor or a person who acquired title from the |
| 118 | mortgagor to all or a part of the property described in the |
| 119 | mortgage. |
| 120 | (e) A statement that the mortgagee or mortgage servicer |
| 121 | provided a payoff statement which was used to make payment in |
| 122 | full of the unpaid balance of the loan secured by the mortgage. |
| 123 | (f) A statement that payment in full of the unpaid balance |
| 124 | of the loan secured by the mortgage was made in accordance with |
| 125 | the payoff statement and that a copy of the certificate of |
| 126 | release was sent to the mortgagee or mortgage servicer that |
| 127 | provided the payoff statement. |
| 128 | (4) EXECUTION.-- |
| 129 | (a) A certificate of release authorized by subsection (2) |
| 130 | must be duly executed, sworn to or affirmed under penalty of |
| 131 | perjury before a notary public, and recorded and may be executed |
| 132 | by an officer of a title insurer or by a duly appointed agent of |
| 133 | a title insurer. Such delegation to an agent by a title insurer |
| 134 | shall not relieve the title insurer of any liability for damages |
| 135 | caused by the agent for the execution or recordation of a |
| 136 | certificate of release. |
| 137 | (b) The appointment of an agent must be duly executed, |
| 138 | acknowledged, and recorded by an officer of a title insurer and |
| 139 | must state: |
| 140 | 1. The title insurer as the principal. |
| 141 | 2. The identity of the person, partnership, or corporation |
| 142 | authorized to act as agent to execute and record certificates of |
| 143 | release provided for in this section on behalf of the title |
| 144 | insurer. |
| 145 | 3. That the agent has the full authority to execute and |
| 146 | record certificates of release provided for in this section on |
| 147 | behalf of the title insurer. |
| 148 | (c) A separate appointment of agent shall not be necessary |
| 149 | for each certificate of release provided that at least one such |
| 150 | appointment is recorded in the county in which the mortgaged |
| 151 | property is located. The appointment of agent must be rerecorded |
| 152 | where necessary to establish authority of the agent, but such |
| 153 | authority shall continue until a revocation of appointment is |
| 154 | recorded in the office of the county recorder in which the |
| 155 | appointment of agent was recorded. |
| 156 | (d) After recordation of a title insurer's revocation of |
| 157 | appointment in the office of the county recorder in which the |
| 158 | appointment was recorded, the agent whose appointment is revoked |
| 159 | in such county shall have no further authority to execute or |
| 160 | record certificates of release as provided in this section on |
| 161 | behalf of that title insurer with respect to any mortgages |
| 162 | recorded in that county, and no such certificate of release |
| 163 | thereafter executed or recorded by that agent on behalf of that |
| 164 | title insurer shall be effective to release any mortgage |
| 165 | recorded in that county. |
| 166 | (5) EFFECT.--For purposes of releasing the mortgage, a |
| 167 | certificate of release containing the information and statements |
| 168 | provided for in subsection (3) and executed as provided in |
| 169 | subsection (4) is entitled to be recorded with the county |
| 170 | recorder and operates as a release of the mortgage described in |
| 171 | the certificate of release. The county recorder shall rely upon |
| 172 | the certificate to release the mortgage. Recording of a |
| 173 | certificate of release by a title insurer or its agent shall not |
| 174 | relieve the mortgagor, or the mortgagor's successors or assigns, |
| 175 | from any personal liability on the loan or other obligations |
| 176 | secured by the mortgage. A certificate of release recorded |
| 177 | pursuant to this section fulfills any other obligation of the |
| 178 | mortgagee or mortgage servicer to file a satisfaction or release |
| 179 | of the mortgage. |
| 180 | (6) LIABILITY OF TITLE INSURER.-- |
| 181 | (a) In addition to any other remedy provided by law, a |
| 182 | title insurer recording a certificate of release under this |
| 183 | section shall be liable to the holder of the obligation secured |
| 184 | by the mortgage for actual damage sustained due to the recording |
| 185 | of the certificate of release. Reasonable costs and attorneys' |
| 186 | fees shall be awarded to the prevailing party. |
| 187 | (b) The title insurer named in a certificate of release |
| 188 | filed by a duly appointed agent shall be liable pursuant to this |
| 189 | subsection without regard to whether the title insurer |
| 190 | authorized the specific certificate of release recorded by the |
| 191 | agent. |
| 192 | (c) The title insurer shall have no liability under this |
| 193 | subsection if the title insurer shows that payment in full of |
| 194 | the unpaid balance of the loan secured by the mortgage was made |
| 195 | in accordance with the payoff statement furnished by the |
| 196 | mortgagee or the mortgage servicer. |
| 197 | (d) Liability of a title insurer pursuant to this section |
| 198 | shall be considered to be a title insurance claim on real |
| 199 | property in this state pursuant to s. 627.7865. |
| 200 | (7) RECORDING.--If a mortgage is recorded in more than one |
| 201 | county and a certificate of release is recorded in one of such |
| 202 | counties, a certified copy of the certificate of release may be |
| 203 | recorded in another of such counties with the same effect as the |
| 204 | original. In all cases, the certificate of release shall be |
| 205 | entered and indexed as satisfactions of mortgage are entered and |
| 206 | indexed. |
| 207 | (8) APPLICATION.--This section applies only to a mortgage, |
| 208 | including any modifications of such mortgage, in the principal |
| 209 | amount of $500,000 or less. |
| 210 | (9) PREMIUM.--The Financial Services Commission shall |
| 211 | adopt rules establishing an actuarially sound premium charge to |
| 212 | be made for each certificate of release recorded pursuant to |
| 213 | this section. |
| 214 | Section 2. Section 701.05, Florida Statutes, is repealed. |
| 215 | Section 3. This act shall take effect July 1, 2005. |