093_HB2550sam003
LRB093 09802 LCB 16886 a
1 AMENDMENT TO HOUSE BILL 2550
2 AMENDMENT NO. . Amend House Bill 2550 by replacing
3 everything after the enacting clause with the following:
4 "Section 5. The Mortgage Act is amended by changing
5 Section 2 as follows:
6 (765 ILCS 905/2) (from Ch. 95, par. 52)
7 Sec. 2. Every mortgagee of real property, his assignee
8 of record, or other legal representative, having received
9 full satisfaction and payment of all such sum or sums of
10 money as are really due to him from the mortgagor, and every
11 trustee, or his successor in trust, in a deed of trust in the
12 nature of a mortgage, the notes, bonds or other indebtedness
13 secured thereby having been fully paid before September 7,
14 1973, shall, at the request of the mortgagor, or grantor in a
15 deed of trust in the nature of a mortgage, his heirs, legal
16 representatives or assigns, in case such mortgage or trust
17 deed has been recorded or registered, make, execute and
18 deliver to the mortgagor or grantor in a deed of trust in the
19 nature of a mortgage, his heirs, legal representatives or
20 assigns, an instrument in writing executed in conformity with
21 the provisions of this section releasing such mortgage or
22 deed of trust in the nature of a mortgage, which release
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1 shall be entitled to be recorded or registered and the
2 recorder or registrar upon receipt of such a release and the
3 payment of the recording fee therefor shall record or
4 register the same.
5 Mortgages of real property and deeds of trust in the
6 nature of a mortgage shall be released of record only in the
7 manner provided herein or as provided in the Mortgage
8 Certificate of Release Act; however, nothing contained in
9 this Act shall in any manner affect the validity of any
10 release of a mortgage or deed of trust made prior to January
11 1, 1952 on the margin of the record.
12 Except in the case of a mortgage that is required to be
13 released under the Mortgage Certificate of Release Act, every
14 mortgagee of real property, his assignee of record, or other
15 legal representative, having received full satisfaction and
16 payment of all such sum or sums of money as are really due to
17 him from the mortgagor, and every trustee, or his successor
18 in trust, in a deed of trust in the nature of a mortgage, the
19 notes, bonds or other indebtedness secured thereby having
20 been fully paid after September 7, 1973, shall make, execute
21 and deliver to the mortgagor or grantor in a deed of trust in
22 the nature of a mortgage, his heirs, legal representatives or
23 assigns, an instrument in writing releasing such mortgage or
24 deed of trust in the nature of a mortgage or shall deliver
25 that release to the recorder or registrar for recording or
26 registering. If the release is delivered to the mortgagor or
27 grantor, it must have imprinted on its face in bold letters
28 at least 1/4 inch in height the following: "FOR THE
29 PROTECTION OF THE OWNER, THIS RELEASE SHALL BE FILED WITH THE
30 RECORDER OR THE REGISTRAR OF TITLES IN WHOSE OFFICE THE
31 MORTGAGE OR DEED OF TRUST WAS FILED". The recorder, or
32 registrar, upon receipt of such a release and the payment of
33 the recording or registration fee, shall record or register
34 the release. A certificate of release issued and recorded by
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1 a title insurance company or its duly appointed agent
2 pursuant to the Mortgage Certificate of Release Act shall
3 satisfy the requirements of this Section 2.
4 (Source: P.A. 92-765, eff. 8-6-02.)
5 Section 10. The Mortgage Certificate of Release Act is
6 amended by changing Sections 5, 10, 15, 20, 35, 40, and 50
7 and by adding Section 10.1 and 70 as follows:
8 (765 ILCS 935/5)
9 (Section scheduled to be repealed on January 1, 2004)
10 Sec. 5. Definitions. As used in this Act:
11 "Hold-harmless agreement" means a letter whereby a title
12 insurance company, as defined in the Title Insurance Act,
13 agrees to indemnify another title insurance company preparing
14 to insure a present transaction that the indemnifying title
15 insurance company has previously insured over without taking
16 an exception to its title insurance policy for matters
17 remaining of record, such as a previously paid but unreleased
18 mortgage. A model form of a hold-harmless agreement is set
19 forth in Section 70 of this Act.
20 "Mortgage" means a mortgage or mortgage lien on an
21 interest in one-to-four family residential real property in
22 this State given to secure a loan in the original principal
23 amount of less than $500,000. Trust deeds are not included.
24 "Mortgagee" means either: (i) the grantee of a mortgage;
25 or (ii) if a mortgage has been assigned of record, the last
26 person to whom the mortgage has been assigned of record.
27 "Mortgage servicer" means the last person to whom a
28 mortgagor or the mortgagor's successor in interest has been
29 instructed by a mortgagee to send payments on a loan secured
30 by a mortgage. A person transmitting a payoff statement is
31 the mortgage servicer for the mortgage described in the
32 payoff statement.
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1 "Mortgagor" means the grantor of a mortgage.
2 "Notice of intention to file certificate of release"
3 means a statement from a title insurance company or title
4 insurance agent to the person to whom payment of the loan
5 secured by the mortgage was made in accordance with the
6 payoff statement of the intention to record a certificate of
7 release.
8 "Payoff statement" means a statement for the amount of
9 the (i) unpaid balance of a loan secured by a mortgage,
10 including principal, interest, and any other charges due
11 under or secured by the mortgage; and (ii) interest on a per
12 day basis for the unpaid balance.
13 "Record" means to deliver the certificate of release for
14 recording with the county recorder.
15 "Title insurance agent" has the same meaning ascribed to
16 it as in Section 3 of the Title Insurance Act.
17 "Title insurance company" has the same meaning ascribed
18 to it as in Section 3 of the Title Insurance Act.
19 (Source: P.A. 92-765, eff. 8-6-02.)
20 (765 ILCS 935/10)
21 (Section scheduled to be repealed on January 1, 2004)
22 Sec. 10. Mortgage presently being paid off. Receipt of
23 payment pursuant to the lender's written payoff statement
24 shall constitute authority to record a certificate of
25 release. Content and delivery of notice of intention to file
26 certificate of release. (a) The Notice of intention to file a
27 certificate of release shall state that if the title
28 insurance company or title insurance agent does not receive
29 from the mortgagee or mortgage servicer or its successor in
30 interest either a release or a written objection to the
31 issuance of a certificate of release pursuant to subsection
32 (c) of this Section, A certificate of release shall may be
33 delivered for recording to the recorder of each county in
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1 which the mortgage is recorded, together with the other
2 documents from the new transaction, including a deed or new
3 mortgage, or both by the title insurance company or its duly
4 appointed agent. A notice of intention to file a certificate
5 of release should be in a form and include content that
6 substantially complies with Section 65 of this Act. The
7 notice of intention shall include a copy of the closing
8 statement or HUD-1 form and the payoff check or a copy of it,
9 or a copy of the wire transfer order.
10 (b) The notice of intention to file a certificate of
11 release shall be sent by certified mail, return receipt
12 requested, with postage prepaid, or by another service
13 providing receipted delivery, no sooner than the day of
14 closing and no later than 30 days after receipt of payment.
15 The notice shall be delivered to the location identified in
16 the payoff statement or as otherwise directed in writing by
17 the mortgagee or mortgage servicer or its successor in
18 interest. The notice may be sent with the payment, and need
19 not be sent separately.
20 (c) Within 90 days after receipt of the notice of
21 intention to file a certificate of release, the mortgagee or
22 mortgage servicer or its successor in interest may issue a
23 release or may object in writing to the issuance of a
24 certificate of release, and by doing so shall prevent the
25 title insurance company or title insurance agent from
26 executing and recording a certificate of release pursuant to
27 this Act. Any written objection submitted by the mortgagee or
28 mortgage servicer or its successor in interest shall state
29 the reason for which the release or certificate of release
30 should not be issued. The written objection shall be sent to
31 the title insurance company or title insurance agent by
32 certified mail, return receipt requested, with postage
33 prepaid, or by another service providing receipted delivery.
34 A title insurance company or title insurance agent shall not
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1 cause a certificate of release to be recorded pursuant to
2 this Section if the title insurance company or title
3 insurance agent receives a written objection from the
4 mortgagee or mortgage servicer or its successor in interest.
5 (Source: P.A. 92-765, eff. 8-6-02.)
6 (765 ILCS 935/10.1 new)
7 Sec. 10.1. Previously paid mortgages. A title insurance
8 company or its duly appointed title insurance agent may issue
9 a mortgage certificate of release pursuant to this Act for a
10 mortgage that appears in the chain of title prior to the
11 mortgage presently being paid. The title insurance company
12 must have proof of payment from its own prior files that it
13 paid the mortgage or mortgages pursuant to a payoff
14 statement. Where another title insurance company has paid off
15 an unreleased mortgage pursuant to a payoff statement, the
16 title insurance company or its duly appointed title insurance
17 agent in the current transaction may rely upon the
18 hold-harmless letter of that prior title insurance company to
19 issue a mortgage certificate of release. This grant of
20 authority is subject to the condition that the issuer of the
21 mortgage certificate of release does not have notice that the
22 lender opposes its release. A single mortgage certificate of
23 release may include more than one mortgage, including both
24 presently and previously paid mortgages.
25 (765 ILCS 935/15)
26 (Section scheduled to be repealed on January 1, 2004)
27 Sec. 15. Certificate of release. An officer or duly
28 appointed agent of a title insurance company may, on behalf
29 of a mortgagor or a person who has acquired from a mortgagor
30 title to all or part of the property described in the
31 mortgage, execute a certificate of release that complies with
32 the requirements of this Act and record the certificate of
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1 release with the recorder of each county in which the
2 mortgage is recorded, provided that payment of the loan
3 secured by the mortgage was made in accordance with a written
4 payoff statement furnished by the mortgagee or the mortgage
5 servicer. The title insurance company or its duly appointed
6 agent shall not be required to search the public record for a
7 possible recorded satisfaction or release. , that a
8 satisfaction or release of the mortgage has not previously
9 been recorded, and that a notice of intention to file a
10 certificate of release was sent in accordance with Section
11 10.
12 (Source: P.A. 92-765, eff. 8-6-02.)
13 (765 ILCS 935/20)
14 (Section scheduled to be repealed on January 1, 2004)
15 Sec. 20. Contents of certificate of release. A
16 certificate of release executed under this Act must contain
17 substantially all of the following for each mortgage being
18 released:
19 (a) The name of the mortgagor, the name of the original
20 mortgagee, and, if applicable, the mortgage servicer at the
21 date of the mortgage, the date of recording, and the volume
22 and page or document number or other official recording
23 designation in the real property records where the mortgage
24 is recorded., together with similar information for the last
25 recorded assignment of the mortgage.
26 (b) A statement that the mortgage was paid in accordance
27 with the written payoff statement received from the mortgagee
28 or mortgage servicer and there is no objection from the
29 mortgagee or mortgage servicer or its successor in interest.
30 With respect to previously paid mortgages, the hold-harmless
31 letter from a title insurance company, as provided in Section
32 10.1 of this Act, shall satisfy this requirement.
33 (c) A statement that the person executing the
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1 certificate of release is an officer or a duly appointed
2 agent of a title insurance company authorized and licensed to
3 transact the business of insuring titles to interests in real
4 property in this State pursuant to subsections (2) and (3) of
5 Section 3 of the Title Insurance Act.
6 (d) A statement that the certificate of release is made
7 on behalf of the mortgagor or a person who acquired title
8 from the mortgagor to all or a part of the property described
9 in the mortgage.
10 (e) A statement that the mortgagee or mortgage servicer
11 provided a written payoff statement. The hold-harmless
12 letter from a title insurance company, as provided in Section
13 10.1 of this Act, shall satisfy this requirement with respect
14 to previously paid mortgages.
15 (Source: P.A. 92-765, eff. 8-6-02.)
16 (765 ILCS 935/35)
17 (Section scheduled to be repealed on January 1, 2004)
18 Sec. 35. Effect of recording certificate of release. For
19 purposes of releasing the lien of the mortgage, a certificate
20 of release containing the information and statements provided
21 for in Section 20 and executed as provided in Section 25 is
22 prima facie evidence of the facts contained therein, and upon
23 being recorded with the recorder, shall constitute a release
24 of the lien of the mortgage described in the certificate of
25 release. The title insurance company or title insurance agent
26 recording the certificate of release may use the recording
27 fee it may have collected for the recording of a release or
28 satisfaction of the mortgage to effect the recording of the
29 certificate of release.
30 (Source: P.A. 92-765, eff. 8-6-02.)
31 (765 ILCS 935/40)
32 (Section scheduled to be repealed on January 1, 2004)
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1 Sec. 40. Wrongful or erroneous certificate of release.
2 Recording of a wrongful or erroneous certificate of release
3 by a title insurance company or its title insurance agent
4 shall not relieve the mortgagor or the mortgagor's successors
5 or assignees from any personal liability on the loan or other
6 obligations secured by the mortgage. In addition to any other
7 remedy provided by law, a title insurance company executing
8 or recording a certificate of release under this Act that has
9 actual knowledge that the information and statements
10 contained therein are false is liable to the mortgagee for
11 actual damages sustained due to the recording of the
12 certificate of release. The prevailing party in any action
13 or proceeding seeking actual damages due to the recording of
14 a certificate of release shall be entitled to the recovery of
15 reasonable attorneys fees and costs incurred in that action
16 or proceeding.
17 (Source: P.A. 92-765, eff. 8-6-02.)
18 (765 ILCS 935/50)
19 (Section scheduled to be repealed on January 1, 2004)
20 Sec. 50. Form of certificate of release. A certificate
21 of release, in substantially the following form, allowing for
22 alterations to permit the inclusion of multiple mortgages,
23 both presently and previously paid, complies with this Act.
24 CERTIFICATE OF RELEASE
25 Date:....Title Order No.:.....
26 1. Name of mortgagor(s):.....
27 2. Name of original mortgagee:.....
28 3. Name of mortgage servicer (if any):.....
29 4. Name of last assignee of mortgage or record (if any):.....
30 4. 5. Mortgage recording: Vol.:.....Page:.....or Document
31 No.:.....
32 6. Last assignment recording (if any):
33 Vol.:.....Page:.....or Document No.......
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1 5. 7. The above referenced mortgage has been paid in
2 accordance with the payoff statement received from....., and
3 there is no objection from the mortgagee or mortgage servicer
4 or its successor in interest to the recording of this
5 certificate of release.
6 6. 8. The person executing this certificate of release is an
7 officer or duly appointed agent of a title insurance company
8 authorized and licensed to transact the business of insuring
9 titles to interests in real property in this State pursuant
10 to Section 30 of this Act.
11 7. 9. This certificate of release is made on behalf of the
12 mortgagor or a person who acquired title from the mortgagor
13 to all or part of the property described in the mortgage.
14 8. 10. The mortgagee or mortgage servicer provided a payoff
15 statement.
16 9. 11. The property described in the mortgage is as follows:
17 Permanent Index Number:.....
18 Common Address:.....
19 (Name of title insurance company)
20 By:.....
21 (Name of officer and title or name of agent and name of
22 officer / representative thereof)
23 Address:.....
24 Telephone No.:.....
25 State of Illinois)
26 )
27 County of )
28 This instrument was acknowledged before me on .....(date) by
29 .....(name of person) as .....(officer for / agent of)
30 .....(title insurance company).
31 .....
32 Notary Public
33 My commission expires on.....
34 (Source: P.A. 92-765, eff. 8-6-02.)
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1 (765 ILCS 935/70 new)
2 Sec. 70. Form of hold-harmless agreement. A
3 hold-harmless agreement in substantially the following form,
4 allowing for alterations to reflect the facts of the
5 transaction and identity of the title insurance companies,
6 complies with this Act.
7 Hold-harmless Agreement
8 TO: .................... (Presently insuring title insurance
9 company)
10 Re: Policy No.: ...... (Previously insuring title insurance
11 company)
12 Policy amount: $..............
13 Policy/Commitment No.: ............... (Presently
14 insuring title insurance company)
15 You show as exception number(s) .................. in your
16 above referenced commitment for title insurance dated
17 .........., the following exception(s):
18 Mortgage dated ........., recorded as Document No. .......
19 made by ................................. (borrow) to
20 ................................. (lender) to secure an
21 indebtedness in the amount of $.........
22 For and in consideration of your deleting said exception(s),
23 we agree to indemnify you against loss that you may sustain
24 as a result of said deletion. In no event may said indemnity
25 exceed the face amount of our policy as noted above.
26 In the event any claim is made against you as a result of
27 your deletion, you agree to notify us within 30 days of the
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1 date the claim is made.
2 Any action you take with respect to the claim will not
3 obligate us under this letter unless the aforesaid notice has
4 been furnished us and we have adequate time to consider our
5 approval or disapproval of the action.
6 ..........................................
7 Title Insurance Company (Previously insuring)
8 (765 ILCS 935/65 rep.)
9 (765 ILCS 935/90 rep.)
10 Section 20. The Mortgage Certificate of Release Act is
11 amended by repealing Sections 65 and 90.
12 Section 99. Effective date. This Act takes effect
13 December 31, 2003.".