2013 - 2014 LEGISLATURE
September 10, 2013 - Introduced by Senators Harsdorf and Shilling, cosponsored
by Representatives Stroebel, Bernier, Nygren, A. Ott, Kooyenga, Doyle,
Jacque and Thiesfeldt. Referred to Committee on Financial Institutions and
1An Act to repeal
706.05 (9) and (10); to amend
77.25 (13), 422.306 (4) and 2
428.104 (1); and to create
708.15 of the statutes; relating to: mortgage
3satisfaction and an exception to the real estate transfer fee.
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
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 or other
person authorized to request a payoff statement. 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, upon or at any time 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 security
instrument has been assigned, in which case the satisfaction agent must provide the
notice to record an affidavit of satisfaction to the assignee, or that the secured
obligation has not been satisfied, unless the satisfaction agent has reasonable
grounds to believe that a person paid an understated payoff amount on which the
person reasonably and detrimentally relied. 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 bill sets out the right of a settlement agent or a person who is obligated
under a security instrument to request a payoff statement from the secured creditor.
The person or settlement agent, 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 seven business days after the effective date of a notice that
contains the information specified in the bill, or within a reasonable longer time if
the property that is subject to the security interest is not residential property, and
may not charge the person for the first payoff statement the person requests in any
two-month period. The bill specifies the information that the payoff statement must
contain, and provides for 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
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.
Under current law, a real estate transfer fee must be paid when an ownership
interest in real property is transferred. Current law contains various exceptions to
the payment of the real estate transfer fee, however, including when real property
valued at or under $100 is transferred. The bill changes this real property value
amount for the exception to $1,000 or less.
Because this bill relates to an exemption from state or local taxes, it may be
referred to the Joint Survey Committee on Tax Exemptions for a report to be printed
as an appendix to the bill.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
77.25 (13) of the statutes is amended to read:
Of real estate having a value of $100 $1,000
422.306 (4) of the statutes is amended to read:
422.306 (4) Within Except as provided in s. 708.15, within
45 days after 5
payment by the customer of all sums for which the customer is obligated under a 6
consumer credit transaction other than one pursuant to an open-end credit plan, the 7
creditor shall give or forward to the customer instruments which acknowledge 8
payment in full, and release of any security interest when there is no outstanding 9
secured obligation, and furnish to the customer or the customer's designee evidence 10
of the release or assignment to such designee of any recorded lien on real estate and 11
termination of any filed financing statement which perfected such security interest.
428.104 (1) of the statutes is amended to read:
Any time a payment is made in cash, or any other time the method 2
of payment does not itself provide evidence of payment, the creditor shall furnish the 3
customer, without request, a written receipt, evidencing such payment. The 4
customer shall be entitled upon request, free of charge, to an annual statement of 5
account showing receipts and disbursements. Upon
Subject to s. 708.15, upon 6
payment in full of the customer's obligation, the creditor shall release any mortgage 7
by either recording the necessary instrument and forwarding the same to the 8
customer, or by forwarding a satisfaction of such debt to the purchaser of the real 9
property subject to such satisfied mortgage, or the creditor of such purchaser.
706.05 (9) and (10) of the statutes are repealed.
708.15 of the statutes is created to read:
12708.15 Mortgage satisfaction. (1) Definitions.
In this section:
(a) "Address for giving a notification" means, for the purpose of a particular 14
type of notification, the most recent address provided in a document by the intended 15
recipient of the notification to the person giving the notification, unless the person 16
giving the notification knows of a more accurate address, in which case the term 17
means that address.
(b) "Day" means calendar day.
(c) "Document" means information that is inscribed on a tangible medium or 20
that is stored in an electronic or other medium and is retrievable in perceivable form.
(d) "Electronic" means relating to technology having electrical, digital, 22
magnetic, wireless, optical, electromagnetic, or similar capabilities.
(e) "Entitled person" means any of the following:
1. A person liable for payment or performance of the obligation secured by the 25
real property described in a security instrument.
2. The landowner.
3. The settlement agent.
(f) "Good faith" means honesty in fact and the observance of reasonable 4
commercial standards of fair dealing.
(g) "Landowner" or "owner" means a person that, before foreclosure, has the 6
right of redemption in the real property described in a security instrument. The term 7
does not include a person that holds only a lien on the real property.
(h) "Notification" means a document containing information required under 9
this section and signed by the person required to provide the information.
(i) "Payoff amount" means the sum necessary to satisfy a secured obligation, 11
as set forth in a payoff statement by the secured creditor.
(j) "Payoff statement" means a document containing the information specified 13
in sub. (3) (d).
(k) "Person" means an individual, corporation, business trust, estate, trust, 15
partnership, limited liability company, association, joint venture, public corporation, 16
government, or governmental subdivision, agency, or instrumentality, or any other 17
legal or commercial entity.
(L) "Recording data" means the date, document number, volume and page 19
number, if any, that indicate where a document is recorded in the office of the register 20
of deeds under s. 59.43.
(m) "Residential real property" means real property located in this state that 22
is used primarily for personal, family, or household purposes and is improved by one 23
to 4 dwelling units.
(n) "Secured creditor" means a person that holds or is the beneficiary of a 25
security interest or that is authorized both to receive payments on behalf of a person
that holds a security interest and to record a satisfaction of the security instrument 2
upon receiving full performance of the secured obligation. The term does not include 3
a trustee under a security instrument.
(o) "Secured obligation" means an obligation the payment or performance of 5
which is secured by a security interest.
(p) "Security instrument" means an agreement, however denominated, that 7
creates or provides for an interest in real property to secure payment or performance 8
of an obligation, whether or not it also creates or provides for a lien on personal 9
(q) "Security interest" means an interest in real property created by a security 11
(r) "Settlement agent" means the person responsible for the preparation of the 13
settlement statement for the conveyance of real property.
(s) "Sign" means, with present intent to authenticate or adopt a document, any 15
of the following:
1. To execute or adopt a tangible symbol.
2. To attach to or logically associate with the document an electronic sound, 18
symbol, or process.