HB 531

1
A bill to be entitled
2An act relating to certificates of release for mortgages;
3creating s. 701.041, F.S.; providing definitions;
4providing for the issuance of a certificate of release for
5a mortgage by a title insurer or its authorized agent for
6certain purposes; providing for recordation; specifying
7contents of a certificate of release; requiring execution,
8acknowledgment, and recordation of a certificate of
9release by certain entities; providing requirements for
10appointment of an agent for execution purposes; providing
11for effect of a certificate of release; providing for
12liability of title insurers under certain circumstances;
13providing criteria for recording multiple certificates of
14release; providing application; requiring the Financial
15Services Commission to adopt rules establishing an
16actuarially sound premium charge for certificates of
17release; repealing s. 701.05, F.S., relating to failing or
18refusing to satisfy a lien and punishment therefor;
19providing an effective date.
20
21     WHEREAS, the Legislature finds that modern trends in the
22real estate market require that real estate closings must be
23completed, funds disbursed, and title insurance policies issued
24prior to the receipt by the title insurer or its authorized
25agent, or the recording in the public records, of releases or
26satisfactions of mortgages that have been paid, and
27     WHEREAS, in a significant number of circumstances such
28releases or satisfactions are not presented in a timely fashion,
29or are never presented, to the title insurer or its authorized
30agent, and
31     WHEREAS, this situation is exacerbated by the proliferation
32of servicing contracts and multiple assignments of mortgages,
33and
34     WHEREAS, title insurers devote a significant amount of time
35attempting to obtain and record releases and satisfactions of
36mortgages that have been paid, and
37     WHEREAS, title insurers and their authorized agents
38undertake a real and significant risk in the issuance of title
39insurance policies without an exception for these paid mortgages
40that have not been released or satisfied in the public records,
41and
42     WHEREAS, it is in the public interest that an alternative
43method be made available to title insurers and their authorized
44agents to evidence in the public records the payment and release
45of these mortgages, NOW, THEREFORE,
46
47Be It Enacted by the Legislature of the State of Florida:
48
49     Section 1.  Section 701.041, Florida Statutes, is created
50to read:
51     701.041  Title insurer; mortgage release certificate.--
52     (1)  DEFINITIONS.--For purposes of this section:
53     (a)  "Mortgage" means a mortgage or mortgage lien on an
54interest in real property in this state, including any
55modifications thereof, given to secure a loan in the principal
56amount of $500,000 or less, other than a mortgage securing an
57open-end or revolving credit agreement.
58     (b)  "Mortgagee" means:
59     1.  The grantee of a mortgage; or
60     2.  If a mortgage has been assigned of record, the last
61person to whom the mortgage has been assigned of record.
62     (c)  "Mortgage servicer" means the last person to whom a
63mortgagor or the mortgagor's successor in interest has been
64instructed by a mortgagee to send payments on a loan secured by
65a mortgage. A person transmitting a payoff statement is the
66mortgage servicer for the mortgage described in the payment
67statement.
68     (d)  "Mortgagor" means the grantor of a mortgage.
69     (e)  "Payoff statement" means a statement of the amount of:
70     1.  The unpaid balance of a loan secured by a mortgage,
71including principal, interest, and any other charges properly
72due under or secured by the mortgage.
73     2.  Interest on a per-day basis for the unpaid balance.
74     (f)  "Record" means to record with the clerk of the circuit
75court or the comptroller in the county or counties in which the
76real property securing the mortgage is located.
77     (g)  "Title insurer" means a corporation or other business
78entity authorized and licensed to transact the business of
79insuring titles to interests in real property in this state
80under chapter 624.
81     (2)  CERTIFICATE OF RELEASE.--An officer or duly appointed
82agent of a title insurer may, on behalf of a mortgagor or a
83person who acquired from the mortgagor title to all or a part of
84the property described in a mortgage, execute a certificate of
85release that complies with the requirements of this section and
86record the certificate of release in the real property records
87of each county in which the mortgage is recorded if a
88satisfaction or release of the mortgage has not been executed
89and recorded after the date payment in full of the loan secured
90by the mortgage was made in accordance with a payoff statement
91furnished by the mortgagee or the mortgage servicer.
92     (3)  CONTENTS.--A certificate of release executed under
93this section must contain:
94     (a)  The name of the mortgagor, the name of the original
95mortgagee, and, if applicable, the mortgage servicer; the date
96of the mortgage; the date of recording; and the volume and page
97or document number in the real property records in which the
98mortgage is recorded, together with similar information for the
99last recorded assignment of the mortgage.
100     (b)  A statement that the mortgage, including any
101modifications thereof, was in the principal amount of $500,000
102or less.
103     (c)  The name of the title insurer filing the certificate
104of release, a statement that the person executing the
105certificate of release is an officer or a duly appointed agent
106of the title insurer, a statement that the title insurer is
107authorized and licensed to transact the business of insuring
108titles to interests in real property in this state under chapter
109624 or chapter 626, and, if executed by a duly appointed agent,
110shall further provide the recording information of the
111appointment of such agent as required by subsection (4).
112     (d)  A statement that the certificate of release is made on
113behalf of the mortgagor or a person who acquired title from the
114mortgagor to all or a part of the property described in the
115mortgage.
116     (e)  A statement that the mortgagee or mortgage servicer
117provided a payoff statement which was used to make payment in
118full of the unpaid balance of the loan secured by the mortgage.
119     (f)  A statement that payment in full of the unpaid balance
120of the loan secured by the mortgage was made in accordance with
121the payoff statement and that a copy of the certificate of
122release was sent to the mortgagee or mortgage servicer that
123provided the payoff statement.
124     (4)  EXECUTION.--
125     (a)  A certificate of release authorized by subsection (2)
126must be duly executed, sworn to or affirmed under penalty of
127perjury before a notary public, and recorded and may be executed
128by an officer of a title insurer or by a duly appointed agent of
129a title insurer. Such delegation to an agent by a title insurer
130shall not relieve the title insurer of any liability for damages
131caused by the agent for the execution or recordation of a
132certificate of release.
133     (b)  The appointment of an agent must be duly executed,
134acknowledged, and recorded by an officer of a title insurer and
135must state:
136     1.  The title insurer as the principal.
137     2.  The identity of the person, partnership, or corporation
138authorized to act as agent to execute and record certificates of
139release provided for in this section on behalf of the title
140insurer.
141     3.  That the agent has the full authority to execute and
142record certificates of release provided for in this section on
143behalf of the title insurer.
144     (c)  A separate appointment of agent shall not be necessary
145for each certificate of release provided that at least one such
146appointment is recorded in the county in which the mortgaged
147property is located. The appointment of agent must be rerecorded
148where necessary to establish authority of the agent, but such
149authority shall continue until a revocation of appointment is
150recorded in the office of the county recorder in which the
151appointment of agent was recorded.
152     (d)  After recordation of a title insurer's revocation of
153appointment in the office of the county recorder in which the
154appointment was recorded, the agent whose appointment is revoked
155in such county shall have no further authority to execute or
156record certificates of release as provided in this section on
157behalf of that title insurer with respect to any mortgages
158recorded in that county, and no such certificate of release
159thereafter executed or recorded by that agent on behalf of that
160title insurer shall be effective to release any mortgage
161recorded in that county.
162     (5)  EFFECT.--For purposes of releasing the mortgage, a
163certificate of release containing the information and statements
164provided for in subsection (3) and executed as provided in
165subsection (4) is entitled to be recorded with the county
166recorder and operates as a release of the mortgage described in
167the certificate of release. The county recorder shall rely upon
168the certificate to release the mortgage. Recording of a
169certificate of release by a title insurer or its agent shall not
170relieve the mortgagor, or the mortgagor's successors or assigns,
171from any personal liability on the loan or other obligations
172secured by the mortgage. A certificate of release recorded
173pursuant to this section fulfills any other obligation of the
174mortgagee or mortgage servicer to file a satisfaction or release
175of the mortgage.
176     (6)  LIABILITY OF TITLE INSURER.--
177     (a)  In addition to any other remedy provided by law, a
178title insurer recording a certificate of release under this
179section shall be liable to the holder of the obligation secured
180by the mortgage for actual damage sustained due to the recording
181of the certificate of release. Reasonable costs and attorneys'
182fees shall be awarded to the prevailing party.
183     (b)  The title insurer named in a certificate of release
184filed by a duly appointed agent shall be liable pursuant to this
185subsection without regard to whether the title insurer
186authorized the specific certificate of release recorded by the
187agent.
188     (c)  The title insurer shall have no liability under this
189subsection if the title insurer shows that payment in full of
190the unpaid balance of the loan secured by the mortgage was made
191in accordance with the payoff statement furnished by the
192mortgagee or the mortgage servicer.
193     (d)  Liability of a title insurer pursuant to this section
194shall be considered to be a title insurance claim on real
195property in this state pursuant to s. 627.7865.
196     (7)  RECORDING.--If a mortgage is recorded in more than one
197county and a certificate of release is recorded in one of such
198counties, a certified copy of the certificate of release may be
199recorded in another of such counties with the same effect as the
200original. In all cases, the certificate of release shall be
201entered and indexed as satisfactions of mortgage are entered and
202indexed.
203     (8)  APPLICATION.--This section applies only to a mortgage,
204including any modifications of such mortgage, in the principal
205amount of $500,000 or less.
206     (9)  PREMIUM.--The Financial Services Commission shall
207adopt rules establishing an actuarially sound premium charge to
208be made for each certificate of release recorded pursuant to
209this section.
210     Section 2.  Section 701.05, Florida Statutes, is repealed.
211     Section 3.  This act shall take effect July 1, 2005.


CODING: Words stricken are deletions; words underlined are additions.