Rep. Sidney H. Mathias
Filed: 3/31/2004
 
 

 




 

 		












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AMENDMENT TO HOUSE BILL 6253




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    AMENDMENT NO. ______. Amend House Bill 6253 by replacing 
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everything after the enacting clause with the following:

 
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    "Section 5. The Mortgage Act is amended  by changing 
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Sections 2 and 4 as follows:
 



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    (765 ILCS 905/2)  (from Ch. 95, par. 52)



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    Sec. 2. Release; manner.

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    (a) Every mortgagee of real property, his assignee of 
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record, or other
legal
representative, having received full 
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satisfaction and payment of all such
sum or sums of money as 
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are really due to him from the mortgagor, and every
trustee, or 
12
his successor in trust, in a deed of trust in the nature of a

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mortgage, the notes, bonds or other indebtedness secured 
14
thereby having
been fully paid before September 7, 1973, shall, 
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at the request of the
mortgagor, or grantor
in a deed of trust 
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in the nature of a mortgage, his heirs, legal
representatives 
17
or assigns, in case such mortgage or trust deed has been

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recorded or registered, make, execute and deliver to the 
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mortgagor or grantor
in a deed
of trust in the nature of a 
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mortgage, his heirs, legal representatives or
assigns, an 
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instrument in writing executed in conformity with the

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provisions of this section releasing such mortgage or deed of 
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trust in the
nature of a mortgage, which release shall be 
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entitled to be recorded or
registered and
the recorder or 
 


 






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registrar upon receipt of such a release and the payment of the

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recording fee therefor shall record or register the same.

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    Mortgages of real property and deeds of trust in the nature 
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of a
mortgage shall be released of record only in the manner 
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provided herein
or as provided in the Mortgage Certificate of 
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Release Act; however,
nothing contained in this Act shall in 
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any manner affect the
validity of any release of a mortgage or 
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deed of trust made prior to
January 1, 1952 on the margin of 
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the record.

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    Except in the case of a mortgage that is required to be 
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released under the
Mortgage Certificate of
Release Act, every 
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mortgagee of real
property, his assignee of record, or other 
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legal representative, having
received full satisfaction and 
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payment of all such sum or sums of money as
are really due to 
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him from the mortgagor, and every trustee, or his
successor in 
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trust, in a deed of trust in the nature of a mortgage, the

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notes, bonds or other indebtedness secured thereby having been 
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fully paid
after September 7, 1973, shall make, execute and 
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deliver to the mortgagor
or grantor in a
deed of trust in the 
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nature of a mortgage, his heirs, legal representatives
or 
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assigns, an instrument in writing releasing such mortgage or 
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deed of
trust in the nature of a mortgage or shall deliver that 
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release to the
recorder or registrar for recording or 
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registering.  If the release
is delivered
to the mortgagor or

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grantor, it must have imprinted on its face in bold letters at 
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least 1/4
inch in height the following: "FOR THE PROTECTION OF 
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THE OWNER, THIS
RELEASE SHALL BE FILED WITH THE RECORDER OR THE 
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REGISTRAR OF
TITLES IN WHOSE OFFICE THE
MORTGAGE OR DEED OF 
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TRUST WAS FILED".  The recorder, or registrar, upon
receipt of 
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such a
release and the payment of the recording or registration 
31
fee, shall record
or register the release.  A certificate of 
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release issued and recorded by a
title insurance company or its 
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duly appointed agent pursuant to the Mortgage
Certificate of 
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Release Act shall satisfy the requirements of this Section 2. A 
 


 






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mortgagee or trustee in a deed of trust in the nature of a 
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mortgage, its assignee of record, or other legal 
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representative, may include a reasonable fee in its payoff 
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statement for delivering a release as required by this Section 
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or for obtaining verification from a title insurance company 
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that the title  insurance company has satisfied the requirements 
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of the Mortgage Certificate of Release Act.
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    (b)  A release, in substantially the following form, that is 
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delivered as required by this Section by a mortgagee or trustee 
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in a deed of trust in the nature of a mortgage, its assignee of 
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record, or other legal representative, shall be sufficient if 
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it includes the following:
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        (i) the names of the mortgagors;
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        (ii) the name of the original mortgagee;
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        (iii) the name of the mortgage servicer (if any);
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        (iv) the volume and page or document number of the 
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mortgage recording;
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        (v) an identification of the property described in the 
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mortgage by Permanent Index Number and common address; and
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        (vi) a statement to the effect that the mortgage has 
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been paid  in accordance with its terms.


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(Source: P.A. 92-765, eff. 8-6-02; 93-428, eff. 12-31-03.)

 



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    (765 ILCS 905/4)  (from Ch. 95, par. 54)



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    Sec. 4. If any mortgagee or trustee, in a deed in the 
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nature of a mortgage, of
real property, or his executor or 
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administrator, heirs or assigns, or title insurance company 
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that is required to record a certificate of release pursuant to 
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the Mortgage Certificate of Release Act, knowing
the same to be 
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paid, shall not, within one month after the payment of the
debt 
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secured by such mortgage or trust deed, comply with the 
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requirements
of Section 2 of this Act or the Mortgage 
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Certificate of Release Act, he shall, for every such offense, 
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be liable for
and pay to the party aggrieved the sum of $200 
 


 






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which may be recovered by
the party aggrieved in a civil 
2
action, together with reasonable attorney's
fees. In any such 
3
action, introduction of a loan payment book or receipt
which 
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indicates that the obligation has been paid shall be sufficient

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evidence to raise a presumption that the obligation has been 
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paid. Upon a
finding for the party aggrieved, the court shall 
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order the mortgagee or
trustee, or his executor or 
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administrator, heirs or assigns, or title insurance company, to 
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make,
execute and deliver the release as provided in Section 2 
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of this Act or the Mortgage Certificate of Release Act. The

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successor in interest to the mortgagee or trustee in a deed in 
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the nature
of a mortgage shall not be liable for the penalty 
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prescribed in this
Section if he complies with the requirements 
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of Section 2 of this Act
within one month after succeeding to 
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the interest.

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(Source: P.A. 78-587.)

 
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    Section 10. The Mortgage Certificate of Release Act is 
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amended  by changing Section 5, 10, 10.1, 25, 35, and 40 as 
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follows:
 



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    (765 ILCS 935/5)



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    Sec. 5. Definitions. As used in this Act:

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    "Hold-harmless agreement" means a letter whereby a title 
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insurance company,
as defined in the Title Insurance Act, 
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agrees to indemnify another title
insurance company preparing 
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to insure a present transaction that the
indemnifying title 
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insurance company has previously insured over without
taking an 
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exception to its title insurance policy for matters remaining 
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of
record, such as a previously paid but unreleased mortgage. A 
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model form of a
hold-harmless agreement is set forth in Section 
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70 of this Act.

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    "Mortgage" means a mortgage or mortgage lien on an interest 
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in one-to-four
family residential real property
in this State 
 


 






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given to secure a loan in the original principal amount of
less 
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than $500,000.
Trust deeds are not included.

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    "Mortgagee" means either: (i) the grantee of a mortgage; or 
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(ii) if a
mortgage has been assigned of record, the last person 
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to whom the mortgage has
been assigned of record.

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    "Mortgage servicer" means the last person to whom a 
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mortgagor or the
mortgagor's successor in interest has been 
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instructed by a mortgagee to send
payments on a loan secured by 
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a mortgage. A person
transmitting a payoff
statement is the 
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mortgage servicer for the mortgage described in the payoff

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statement.

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    "Mortgagor" means the grantor of a mortgage.

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    "Payoff statement" means a written statement issued by  
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mortgagee or its mortgage servicer that includes a statement 
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of:
for the amount of the (i) the amount of the unpaid balance

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of a loan secured by a mortgage as of a specified payoff date, 
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including the principal, interest, and any other
charges, fees 
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and costs due under or secured by the mortgage; (ii) any 
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additional charges, fees and costs as may be recited therein 
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including, but not limited to, fees for preparation of a 
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release, charges for delivering a release, late fees, facsimile 
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charges, and other miscellaneous charges;
and (ii)
(iii)

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interest on a per diem
day
basis for the unpaid balance after 
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the specified payoff date; (iv) the place where payment must be 
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made; and (v) any limitation as to the authorized method of 
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payment or other qualifications for satisfaction of the amount 
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due under or secured by the mortgage.

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    "Record" means to deliver the certificate of release for 
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recording with the
county recorder.

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    "Title insurance" has the same meaning ascribed to it as in 
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Section 3 of the Title Insurance Act.

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    "Title insurance agent" has the same meaning ascribed to it 
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as in Section 3
of the Title Insurance Act.

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    "Title insurance company" has the same meaning ascribed to 
 


 






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it as in
Section 3 of the Title Insurance Act.

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(Source: P.A. 92-765, eff. 8-6-02; 93-428, eff. 12-31-03.)

 



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    (765 ILCS 935/10)


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    Sec. 10. Certificate of release; mortgage presently being 
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paid off. Receipt of payment pursuant
to
the lender's
written 
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payoff statement shall constitute authority to record a 
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certificate of
release.
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    (a)  A title insurance company or its duly appointed title 
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insurance agent shall execute and deliver for recording a 
10
certificate of release pursuant to this Act when:
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        (1) the title insurance company is issuing title 
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insurance in a transaction in which a mortgage to be 
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released is presently being paid off by the title insurance 
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company;
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        (2) the mortgagee or the mortgage servicer has issued a 
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payoff statement; and
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        (3) the mortgagee or the mortgage servicer has received 
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payment in full of the balance needed to satisfy the 
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obligations secured by the mortgage and set forth in the 
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payoff statement.
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    (b)
A certificate of release shall be delivered for 
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recording to the
recorder
of each county in which the mortgage 
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is recorded, together with the other
documents from the new 
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transaction, including a deed or new mortgage, or
both by the 
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title insurance company or its duly appointed title insurance

26
agent.

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    (c)  The title insurance company or its duly appointed title 
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insurance agent shall furnish written notification of the 
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execution and delivery for recording of the certificate of 
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release to the mortgagee or mortgage servicer.  The notification 
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shall be included in the transmittal letter or form sent to the 
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mortgagee or mortgage servicer with the payment, or as 
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otherwise directed by the mortgagee or mortgage servicing 
 


 






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agent.  In the case of a payoff by a wire transfer or other 
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electronic means, a separate notification shall be sent.

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(Source: P.A. 92-765, eff. 8-6-02; 93-428, eff. 12-31-03.)

 



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    (765 ILCS 935/10.1)


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    Sec. 10.1. Certificate of release; previously paid 
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mortgages. A title insurance company or its
duly appointed 
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title insurance agent may issue a mortgage certificate of

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release pursuant to this Act for a mortgage that appears in the 
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chain of title
prior to the mortgage presently being paid.  The 
10
title insurance company must
have proof of payment from its own 
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prior files that it paid the mortgage or
mortgages pursuant to 
12
a payoff statement. Where another
title insurance company has 
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paid off an unreleased mortgage pursuant to a
payoff statement, 
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the title insurance company or its
duly appointed title 
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insurance agent in the current transaction may rely upon
the 
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hold-harmless letter of that prior title insurance company
to 
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issue a mortgage certificate of release.  This grant of 
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authority
is subject to the condition that the issuer of the 
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mortgage certificate of
release does not have notice that the 
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lender opposes its release.  A single
mortgage certificate of 
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release may include more than one mortgage, including
both 
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presently and previously paid mortgages.

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(Source: P.A. 93-428, eff. 12-31-03.)

 



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    (765 ILCS 935/25)


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    Sec. 25. Execution. 
A certificate of release issued under 
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Sections 10 and 10.1
authorized by Section 15 must be executed 
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and
acknowledged as required by law, as in the case of a deed, 
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and may be executed
by an officer or a duly appointed agent of 
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a title insurance company.  The
agent must be a
currently 
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registered title insurance agent of the title insurance 
31
company.

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(Source: P.A. 92-765, eff. 8-6-02.)

 



 


 






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    (765 ILCS 935/35)


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    Sec. 35. Effect of recording certificate of release. For 
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purposes of releasing the lien of the mortgage, a certificate

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of release containing the information and statements provided 
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for in Section 20
and executed as provided in Section 25 is 
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prima facie evidence of the facts
contained therein, and upon 
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being recorded with the
recorder, shall constitute
a release of

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the lien of
the mortgage described in the certificate of 
9
release.
The title insurance company or title insurance agent 
10
recording the certificate
of release may use the recording fee 
11
it may have collected for the
recording of a release or 
12
satisfaction of the mortgage to effect the recording
of
the 
13
certificate of release. The title insurance company or its duly 
14
appointed title insurance agent may rely upon a payoff 
15
statement to determine the amount that must be paid to the 
16
mortgagee or mortgage servicer in order to execute and deliver 
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for recording a certificate of release if the title insurance 
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company or its duly appointed title insurance agent acts in 
19
good faith and does not know or have reason to know the amount 
20
is incorrect.  The recording of the certificate of release does 
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not itself extinguish the liability of any person liable for 
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repayment of the obligations secured by the mortgage.  The 
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mortgagee or mortgage servicer may recover any sums from the 
24
mortgagor or any other person personally liable for the 
25
performance of the obligations secured by the mortgage, even if 
26
those sums were not included in the payoff statement prior to 
27
payment of the obligation in full.


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(Source: P.A. 92-765, eff. 8-6-02; 93-428, eff. 12-31-03.)

 



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    (765 ILCS 935/40)


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    Sec. 40. Wrongful or erroneous certificate of release. 

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Delivery for recording of a wrongful or erroneous certificate 
32
of release by a
title insurance company or its
title insurance

 


 






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agent shall not relieve the mortgagor or the
mortgagor's 
2
successors or assignees from any personal liability on the loan 
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or
other obligations secured by the mortgage. In addition to 
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any other remedy
provided by law, a title insurance company

5
executing and delivering for
or
recording a certificate of 
6
release
under this Act, directly or by its duly appointed title 
7
insurance agent, is liable to the
mortgagee for actual damages 
8
sustained due to the recording of the certificate
of release.

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The prevailing party
in any action or proceeding seeking actual 
10
damages due to
the recording of a certificate of release shall 
11
be entitled
to the recovery of reasonable attorneys fees and 
12
costs
incurred in that action or proceeding.

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(Source: P.A. 92-765, eff. 8-6-02; 93-428, eff. 12-31-03.)


 

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    (765 ILCS 935/15 rep.)


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    Section 15. The Mortgage Certificate of Release Act is 
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amended  by repealing Section 15.
 

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    Section 99. Effective date. This Act takes effect upon 
18
becoming law.".