093_HB2550enr

 
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 1        AN ACT concerning mortgages.

 2        Be it enacted by the People of  the  State  of  Illinois,
 3    represented in the General Assembly:

 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
23    shall be entitled  to  be  recorded  or  registered  and  the
24    recorder  or registrar upon receipt of such a release and the
25    payment  of  the  recording  fee  therefor  shall  record  or
26    register the same.
27        Mortgages of real property and  deeds  of  trust  in  the
28    nature  of a mortgage shall be released of record only in the
29    manner  provided  herein  or  as  provided  in  the  Mortgage
30    Certificate of Release Act;  however,  nothing  contained  in
31    this  Act  shall  in  any  manner  affect the validity of any
 
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 1    release of a mortgage or deed of trust made prior to  January
 2    1, 1952 on the margin of the record.
 3        Except  in  the case of a mortgage that is required to be
 4    released under the Mortgage Certificate of Release Act, every
 5    mortgagee of real property, his assignee of record, or  other
 6    legal  representative,  having received full satisfaction and
 7    payment of all such sum or sums of money as are really due to
 8    him from the mortgagor, and every trustee, or  his  successor
 9    in trust, in a deed of trust in the nature of a mortgage, the
10    notes,  bonds  or  other  indebtedness secured thereby having
11    been fully paid after September 7, 1973, shall make,  execute
12    and deliver to the mortgagor or grantor in a deed of trust in
13    the nature of a mortgage, his heirs, legal representatives or
14    assigns,  an instrument in writing releasing such mortgage or
15    deed of trust in the nature of a mortgage  or  shall  deliver
16    that  release  to  the recorder or registrar for recording or
17    registering.  If the release is delivered to the mortgagor or
18    grantor, it must have imprinted on its face in  bold  letters
19    at   least  1/4  inch  in  height  the  following:  "FOR  THE
20    PROTECTION OF THE OWNER, THIS RELEASE SHALL BE FILED WITH THE
21    RECORDER OR THE REGISTRAR  OF  TITLES  IN  WHOSE  OFFICE  THE
22    MORTGAGE  OR  DEED  OF  TRUST  WAS  FILED".  The recorder, or
23    registrar, upon receipt of such a  release and the payment of
24    the recording or registration fee, shall record  or  register
25    the release.  A certificate of release issued and recorded by
26    a  title  insurance  company  or  its  duly  appointed  agent
27    pursuant  to  the  Mortgage  Certificate of Release Act shall
28    satisfy the requirements of this Section 2.
29    (Source: P.A. 92-765, eff. 8-6-02.)

30        Section 10.  The Mortgage Certificate of Release  Act  is
31    amended  by  changing  Sections 5, 10, 15, 20, 35, 40, and 50
32    and by adding Sections 10.1 and 70 as follows:
 
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 1        (765 ILCS 935/5)
 2        (Section scheduled to be repealed on January 1, 2004)
 3        Sec. 5.  Definitions.  As used in this Act:
 4        "Hold-harmless agreement" means a letter whereby a  title
 5    insurance  company,  as  defined  in the Title Insurance Act,
 6    agrees to indemnify another title insurance company preparing
 7    to insure a present transaction that the  indemnifying  title
 8    insurance  company has previously insured over without taking
 9    an exception  to  its  title  insurance  policy  for  matters
10    remaining of record, such as a previously paid but unreleased
11    mortgage.  A  model  form of a hold-harmless agreement is set
12    forth in Section 70 of this Act.
13        "Mortgage" means  a  mortgage  or  mortgage  lien  on  an
14    interest  in  one-to-four family residential real property in
15    this State given to secure a loan in the  original  principal
16    amount of less than $500,000. Trust deeds are not included.
17        "Mortgagee"  means either: (i) the grantee of a mortgage;
18    or (ii) if a mortgage has been assigned of record,  the  last
19    person to whom the mortgage has been assigned of record.
20        "Mortgage  servicer"  means  the  last  person  to whom a
21    mortgagor or the mortgagor's successor in interest  has  been
22    instructed  by a mortgagee to send payments on a loan secured
23    by a mortgage. A person transmitting a  payoff  statement  is
24    the  mortgage  servicer  for  the  mortgage  described in the
25    payoff statement.
26        "Mortgagor" means the grantor of a mortgage.
27        "Notice of intention  to  file  certificate  of  release"
28    means  a  statement  from  a title insurance company or title
29    insurance agent to the person to whom  payment  of  the  loan
30    secured  by  the  mortgage  was  made  in accordance with the
31    payoff statement of the intention to record a certificate  of
32    release.
33        "Payoff  statement"  means  a statement for the amount of
34    the (i) unpaid balance of  a  loan  secured  by  a  mortgage,
 
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 1    including  principal,  interest,  and  any  other charges due
 2    under or secured by the mortgage; and (ii) interest on a  per
 3    day basis for the unpaid balance.
 4        "Record"  means to deliver the certificate of release for
 5    recording with the county recorder.
 6        "Title insurance agent" has the same meaning ascribed  to
 7    it as in Section 3 of the Title Insurance Act.
 8        "Title  insurance  company" has the same meaning ascribed
 9    to it as in Section 3 of the Title Insurance Act.
10    (Source: P.A. 92-765, eff. 8-6-02.)

11        (765 ILCS 935/10)
12        (Section scheduled to be repealed on January 1, 2004)
13        Sec. 10.  Mortgage presently being paid off.  Receipt  of
14    payment  pursuant  to  the  lender's written payoff statement
15    shall  constitute  authority  to  record  a  certificate   of
16    release.  Content and delivery of notice of intention to file
17    certificate of release. (a) The Notice of intention to file a
18    certificate  of  release  shall  state  that  if  the   title
19    insurance  company  or title insurance agent does not receive
20    from the mortgagee or mortgage servicer or its  successor  in
21    interest  either  a  release  or  a  written objection to the
22    issuance of a certificate of release pursuant  to  subsection
23    (c)  of  this Section,  A certificate of release shall may be
24    delivered for recording to the recorder  of  each  county  in
25    which  the  mortgage  is  recorded,  together  with the other
26    documents from the new transaction, including a deed  or  new
27    mortgage,  or both by the title insurance company or its duly
28    appointed agent. A notice of intention to file a  certificate
29    of  release  should  be  in  a  form and include content that
30    substantially complies with  Section  65  of  this  Act.  The
31    notice  of  intention  shall  include  a  copy of the closing
32    statement or HUD-1 form and the payoff check or a copy of it,
33    or a copy of the wire transfer order.
 
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 1        (b)  The notice of intention to  file  a  certificate  of
 2    release  shall  be  sent  by  certified  mail, return receipt
 3    requested,  with  postage  prepaid,  or  by  another  service
 4    providing receipted delivery,  no  sooner  than  the  day  of
 5    closing  and  no later than 30 days after receipt of payment.
 6    The notice shall be delivered to the location  identified  in
 7    the  payoff  statement or as otherwise directed in writing by
 8    the mortgagee  or  mortgage  servicer  or  its  successor  in
 9    interest.  The  notice may be sent with the payment, and need
10    not be sent separately.
11        (c)  Within 90  days  after  receipt  of  the  notice  of
12    intention  to file a certificate of release, the mortgagee or
13    mortgage servicer or its successor in interest  may  issue  a
14    release  or  may  object  in  writing  to  the  issuance of a
15    certificate of release, and by doing  so  shall  prevent  the
16    title   insurance  company  or  title  insurance  agent  from
17    executing and recording a certificate of release pursuant  to
18    this Act. Any written objection submitted by the mortgagee or
19    mortgage  servicer  or  its successor in interest shall state
20    the reason for which the release or  certificate  of  release
21    should  not be issued. The written objection shall be sent to
22    the title insurance  company  or  title  insurance  agent  by
23    certified   mail,  return  receipt  requested,  with  postage
24    prepaid, or by another service providing receipted  delivery.
25    A  title insurance company or title insurance agent shall not
26    cause a certificate of release to  be  recorded  pursuant  to
27    this   Section  if  the  title  insurance  company  or  title
28    insurance  agent  receives  a  written  objection  from   the
29    mortgagee or mortgage servicer or its successor in interest.
30    (Source: P.A. 92-765, eff. 8-6-02.)

31        (765 ILCS 935/10.1 new)
32        Sec. 10.1.  Previously paid mortgages.  A title insurance
33    company or its duly appointed title insurance agent may issue
 
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 1    a  mortgage certificate of release pursuant to this Act for a
 2    mortgage that appears in the chain  of  title  prior  to  the
 3    mortgage  presently  being paid.  The title insurance company
 4    must have proof of payment from its own prior files  that  it
 5    paid   the   mortgage  or  mortgages  pursuant  to  a  payoff
 6    statement. Where another title insurance company has paid off
 7    an unreleased mortgage pursuant to a  payoff  statement,  the
 8    title insurance company or its duly appointed title insurance
 9    agent   in   the   current  transaction  may  rely  upon  the
10    hold-harmless letter of that prior title insurance company to
11    issue a mortgage  certificate  of  release.   This  grant  of
12    authority  is subject to the condition that the issuer of the
13    mortgage certificate of release does not have notice that the
14    lender opposes its release.  A single mortgage certificate of
15    release may include more than one  mortgage,  including  both
16    presently and previously paid mortgages.

17        (765 ILCS 935/15)
18        (Section scheduled to be repealed on January 1, 2004)
19        Sec.  15.  Certificate  of  release.   An officer or duly
20    appointed agent of a title insurance company may,  on  behalf
21    of  a mortgagor or a person who has acquired from a mortgagor
22    title to all  or  part  of  the  property  described  in  the
23    mortgage, execute a certificate of release that complies with
24    the  requirements  of  this Act and record the certificate of
25    release with  the  recorder  of  each  county  in  which  the
26    mortgage  is  recorded,  provided  that  payment  of the loan
27    secured by the mortgage was made in accordance with a written
28    payoff statement furnished by the mortgagee or  the  mortgage
29    servicer.  The  title insurance company or its duly appointed
30    agent shall not be required to search the public record for a
31    possible  recorded  satisfaction  or  release.   ,   that   a
32    satisfaction  or  release  of the mortgage has not previously
33    been recorded, and that a  notice  of  intention  to  file  a
 
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 1    certificate  of  release  was sent in accordance with Section
 2    10.
 3    (Source: P.A. 92-765, eff. 8-6-02.)

 4        (765 ILCS 935/20)
 5        (Section scheduled to be repealed on January 1, 2004)
 6        Sec.  20.  Contents  of  certificate  of  release.      A
 7    certificate  of  release executed under this Act must contain
 8    substantially all of the following for  each  mortgage  being
 9    released:
10        (a)  The  name of the mortgagor, the name of the original
11    mortgagee, and, if applicable, the mortgage servicer  at  the
12    date  of  the mortgage, the date of recording, and the volume
13    and page or  document  number  or  other  official  recording
14    designation  in  the real property records where the mortgage
15    is recorded., together with similar information for the  last
16    recorded assignment of the mortgage.
17        (b)  A statement that the mortgage was paid in accordance
18    with the written payoff statement received from the mortgagee
19    or  mortgage  servicer  and  there  is  no objection from the
20    mortgagee or mortgage servicer or its successor in  interest.
21    With  respect to previously paid mortgages, the hold-harmless
22    letter from a title insurance company, as provided in Section
23    10.1 of this Act, shall satisfy this requirement.
24        (c)  A  statement   that   the   person   executing   the
25    certificate  of  release  is  an  officer or a duly appointed
26    agent of a title insurance company authorized and licensed to
27    transact the business of insuring titles to interests in real
28    property in this State pursuant to subsections (2) and (3) of
29    Section 3 of the Title Insurance Act.
30        (d)  A statement that the certificate of release is  made
31    on  behalf  of  the  mortgagor or a person who acquired title
32    from the mortgagor to all or a part of the property described
33    in the mortgage.
 
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 1        (e)  A statement that the mortgagee or mortgage  servicer
 2    provided  a  written  payoff  statement.   The  hold-harmless
 3    letter from a title insurance company, as provided in Section
 4    10.1 of this Act, shall satisfy this requirement with respect
 5    to previously paid mortgages.
 6    (Source: P.A. 92-765, eff. 8-6-02.)

 7        (765 ILCS 935/35)
 8        (Section scheduled to be repealed on January 1, 2004)
 9        Sec. 35.  Effect of recording certificate of release. For
10    purposes of releasing the lien of the mortgage, a certificate
11    of release containing the information and statements provided
12    for  in  Section 20 and executed as provided in Section 25 is
13    prima facie evidence of the facts contained therein, and upon
14    being recorded with the recorder, shall constitute a  release
15    of  the  lien of the mortgage described in the certificate of
16    release. The title insurance company or title insurance agent
17    recording the certificate of release may  use  the  recording
18    fee  it  may have collected for the recording of a release or
19    satisfaction of the mortgage to effect the recording  of  the
20    certificate of release.
21    (Source: P.A. 92-765, eff. 8-6-02.)

22        (765 ILCS 935/40)
23        (Section scheduled to be repealed on January 1, 2004)
24        Sec. 40.  Wrongful or erroneous certificate of release.
25    Recording  of  a wrongful or erroneous certificate of release
26    by a title insurance company or  its  title  insurance  agent
27    shall not relieve the mortgagor or the mortgagor's successors
28    or assignees from any personal liability on the loan or other
29    obligations secured by the mortgage. In addition to any other
30    remedy  provided  by law, a title insurance company executing
31    or recording a certificate of release under this Act that has
32    actual  knowledge  that  the   information   and   statements
 
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 1    contained  therein  are  false is liable to the mortgagee for
 2    actual  damages  sustained  due  to  the  recording  of   the
 3    certificate  of release.   The prevailing party in any action
 4    or proceeding seeking actual damages due to the recording  of
 5    a certificate of release shall be entitled to the recovery of
 6    reasonable  attorneys  fees and costs incurred in that action
 7    or proceeding.
 8    (Source: P.A. 92-765, eff. 8-6-02.)

 9        (765 ILCS 935/50)
10        (Section scheduled to be repealed on January 1, 2004)
11        Sec. 50.  Form of certificate of release.  A  certificate
12    of release, in substantially the following form, allowing for
13    alterations  to  permit  the inclusion of multiple mortgages,
14    both presently and previously paid, complies with this Act.

15                       CERTIFICATE OF RELEASE
16    Date:....Title Order No.:.....
17    1. Name of mortgagor(s):.....
18    2. Name of original mortgagee:.....
19    3. Name of mortgage servicer (if any):.....
20    4. Name of last assignee of mortgage or record (if any):.....
21    4. 5.  Mortgage  recording:  Vol.:.....Page:.....or  Document
22    No.:.....
23    6. Last assignment recording (if any):
24    Vol.:.....Page:.....or Document No.......
25    5. 7.  The  above  referenced  mortgage  has  been  paid   in
26    accordance  with the payoff statement received from....., and
27    there is no objection from the mortgagee or mortgage servicer
28    or its  successor  in  interest  to  the  recording  of  this
29    certificate of release.
30    6. 8.  The person executing this certificate of release is an
31    officer  or duly appointed agent of a title insurance company
32    authorized and licensed to transact the business of  insuring
33    titles  to  interests in real property in this State pursuant
 
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 1    to Section 30 of this Act.
 2    7. 9.  This certificate of release is made on behalf  of  the
 3    mortgagor  or  a person who acquired title from the mortgagor
 4    to all or part of the property described in the mortgage.
 5    8. 10.  The mortgagee or mortgage servicer provided a  payoff
 6    statement.
 7    9. 11.  The property described in the mortgage is as follows:
 8    Permanent Index Number:.....
 9    Common Address:.....
10    (Name of title insurance company)
11    By:.....
12    (Name  of  officer  and  title  or  name of agent and name of
13    officer / representative thereof)
14    Address:.....
15    Telephone No.:.....
16    State of Illinois)
17                     )
18    County of        )
19    This instrument was acknowledged before me on .....(date)  by
20    .....(name  of  person)  as  .....(officer  for  /  agent of)
21    .....(title insurance company).
22    .....
23    Notary Public
24    My commission expires on.....
25    (Source: P.A. 92-765, eff. 8-6-02.)

26        (765 ILCS 935/70 new)
27        Sec.   70.  Form   of   hold-harmless    agreement.     A
28    hold-harmless  agreement in substantially the following form,
29    allowing  for  alterations  to  reflect  the  facts  of   the
30    transaction  and  identity  of the title insurance companies,
31    complies with this Act.

32                       Hold-harmless Agreement
 
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 1    TO:  .................... (Presently insuring title insurance
 2    company)

 3    Re: Policy No.: ...... (Previously insuring  title  insurance
 4    company)
 5        Policy amount: $..............
 6        Policy/Commitment    No.:    ...............   (Presently
 7    insuring title insurance company)

 8    You show as exception number(s)  ..................  in  your
 9    above   referenced   commitment  for  title  insurance  dated
10    .........., the following exception(s):

11    Mortgage dated ........., recorded as  Document  No.  .......
12    made   by   .................................   (borrow)   to
13    .................................   (lender)   to  secure  an
14    indebtedness in the amount of $.........

15    For and in consideration of your deleting said  exception(s),
16    we  agree  to indemnify you against loss that you may sustain
17    as a result of said deletion.  In no event may said indemnity
18    exceed the face amount of our policy as noted above.

19    In the event any claim is made against you  as  a  result  of
20    your  deletion,  you agree to notify us within 30 days of the
21    date the claim is made.

22    Any action you take  with  respect  to  the  claim  will  not
23    obligate us under this letter unless the aforesaid notice has
24    been  furnished  us and we have adequate time to consider our
25    approval or disapproval of the action.

26    ..........................................
27    Title Insurance Company (Previously insuring)
 
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 1        (765 ILCS 935/65 rep.)
 2        (765 ILCS 935/90 rep.)
 3        Section 20.  The Mortgage Certificate of Release  Act  is
 4    amended by repealing Sections 65 and 90.

 5        Section  99.   Effective  date.   This  Act  takes effect
 6    December 31, 2003.