AB1100: Bill Text

LRB-2737/1

MJL:lmk:ch

2005 - 2006 LEGISLATURE

2005 Assembly BILL 1100

March 9, 2006 - Introduced by Representative Cullen, cosponsored by Senator Risser. Referred to Committee on Financial Institutions.

AB1100,1,3 An Act to repeal 706.05 (8) to (10) (c); to renumber 706.05 (10) (d); and to create 706.054 of the statutes; relating to: the Uniform Residential Mortgage Satisfaction Act.

Analysis by the Legislative Reference Bureau

Under current law, generally a mortgage-holder (mortgagee) must execute and record a full satisfaction of a mortgage within 30 days after the date on which the mortgagor completes full performance of the terms of the mortgage. A mortgagee must record a mortgage satisfaction within seven days after the mortgagor completes full performance and the mortgagee receives by certified mail a written request from the mortgagor for a full satisfaction. A mortgagee who fails to respond to this written request is liable to the mortgagor for damages of $100 for each day that the violation remains uncorrected, up to a total of $2,000, plus actual damages resulting from the violation.

This bill repeals these provisions and replaces them with the Uniform Residential Mortgage Satisfaction Act (URMSA), whose most significant provisions include the following:

1) A requirement that once the mortgagee has received full payment of a mortgage loan, the mortgagor has 30 days to prepare and submit for recording a satisfaction document. No notification to the mortgagee is necessary to trigger this 30-day period. If the mortgagee fails to submit the satisfaction document within this period, the mortgagee is generally liable for any actual damages proximately caused by its failure. URMSA also specifies the minimal amount of information necessary for a satisfaction to be recorded.

2) URMSA imposes an affirmative duty on a mortgagee to provide a payoff statement within 10 days of a proper request, specifies the minimal content for a payoff-statement, and clarifies the persons that may request a payoff statement. URMSA also provides that a mortgagee that issues a payoff statement that contains an erroneous payoff amount may not enforce a mortgage against a person who has reasonably and detrimentally relied upon the erroneous payoff amount.

3) URMSA allows a satisfaction agent to prepare and record on behalf of the mortgagor an affidavit of satisfaction for a residential mortgage but only after first giving notice to the mortgagee and giving the mortgagee 30 days to record a satisfaction or object that the secured obligation remains unsatisfied. If the mortgagee raises a timely objection, this option is not available, but if the mortgagee fails to raise a timely objection, the satisfaction agent may generally record an affidavit of satisfaction, which constitutes a satisfaction of the mortgage.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB1100, s. 1 Section 1. 706.05 (8) to (10) (c) of the statutes are repealed.

AB1100, s. 2 Section 2. 706.05 (10) (d) of the statutes is renumbered 706.05 (10m).

AB1100, s. 3 Section 3. 706.054 of the statutes is created to read:

AB1100,2,5 706.054 Uniform Residential Mortgage Satisfaction Act. (1) Definitions. In this section:

AB1100,2,10 (a) "Address for giving a notification" means, for the purpose of a particular type of notification, the most recent address provided in a document by the intended recipient of the notification to the person giving the notification, unless the person giving the notification knows of a more accurate address, in which case the term means that address.

AB1100,2,11 (b) "Day" means calendar day.

AB1100,2,13 (c) "Document" means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

AB1100,2,15 (d) "Electronic" means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.

AB1100,3,3 (e) "Entitled person" means a person liable for payment or performance of the obligation secured by the real property described in a security instrument, or the landowner.

AB1100,3,5 (f) "Good faith" means honesty in fact and the observance of reasonable commercial standards of fair dealing.

AB1100,3,8 (g) "Landowner" means a person that, before foreclosure, has the right of redemption in the real property described in a security instrument. The term does not include a person that holds only a lien on the real property.

AB1100,3,10 (h) "Notification" means a document containing information required under this section and signed by the person required to provide the information.

AB1100,3,11 (i) "Payoff amount" means the sum necessary to satisfy a secured obligation.

AB1100,3,13 (j) "Payoff statement" means a document containing the information specified in sub. (4) (d).

AB1100,3,15 (k) "Recording data" means the volume and page that indicate where a document is recorded in the office of the register of deeds.

AB1100,3,18 (L) "Residential real property" means real property located in this state which is used primarily for personal, family, or household purposes and is improved by one to 4 dwelling units.

AB1100,3,20 (m) "Satisfaction agent" means a title insurance company or an attorney who is licensed to practice in this state and in good standing.

AB1100,3,25 (n) "Secured creditor" means a person that holds or is the beneficiary of a 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 upon receiving full performance of the secured obligation. The term does not include a trustee under a security instrument.

AB1100,4,2 (o) "Secured obligation" means an obligation the payment or performance of which is secured by a security interest.

AB1100,4,6 (p) "Security instrument" means an agreement, however denominated, that creates or provides for an interest in residential real property to secure payment or performance of an obligation, whether or not it also creates or provides for a lien on personal property.

AB1100,4,8 (q) "Security interest" means an interest in residential real property created by a security instrument.

AB1100,4,11 (r) "Sign" means, with present intent to authenticate or adopt a document, to execute or adopt a tangible symbol or to attach to or logically associate with the document an electronic sound, symbol, or process.

AB1100,4,14 (s) "State" means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States.

AB1100,4,17 (t) "Submit for recording" means to deliver, with required fees and taxes, a document sufficient to be recorded under this section, to the appropriate office of the register of deeds.

AB1100,4,19 (2) Notification; manner of giving and effective date. (a) A person gives a notification by doing any of the following:

AB1100,4,22 1. Depositing it with the United States Postal Service with 1st class postage paid or with a commercially reasonable delivery service with cost of delivery provided, properly addressed to the recipient's address for giving a notification.

AB1100,4,25 2. Sending it by facsimile transmission, electronic mail, or other electronic transmission to the recipient's address for giving a notification, but only if the recipient agreed to receive notification in that manner.

AB1100,5,2 3. Causing it to be received at the address for giving a notification within the time that it would have been received if given pursuant to subd. 1.

AB1100,5,3 (b) A notification is effective:

AB1100,5,5 1. The day after it is deposited with a commercially reasonable delivery service for overnight delivery.

AB1100,5,8 2. Three days after it is deposited with the United States Postal Service, 1st class mail with postage prepaid, or with a commercially reasonable delivery service for delivery other than by overnight delivery.

AB1100,5,9 3. The day it is given, if given pursuant to par. (a) 2.

AB1100,5,11 4. The day it is received, if given by a method other than as provided in par. (a) 1. or 2.

AB1100,5,16 (c) If this section or a notification given pursuant to this section requires performance on or by a certain day and that day is a Saturday, Sunday, or legal holiday under the laws of this state or the United States, the performance is sufficient if performed on the next day that is not a Saturday, Sunday, or legal holiday.

AB1100,5,21 (3) Document of rescission; effect; liability for wrongful recording. (a) In this subsection, "document of rescission" means a document stating that an identified satisfaction or affidavit of satisfaction of a security instrument was recorded erroneously, the secured obligation remains unsatisfied, and the security instrument remains in force.

AB1100,5,25 (b) If a person records a satisfaction or affidavit of satisfaction of a security instrument in error, the person may execute and record a document of rescission. Upon recording, the document rescinds an erroneously recorded satisfaction or affidavit.