HF 2232 — A bill for an act relating to mortgage releases. (Formerly HSB 504.) Effective 7-1-18.

House File 2232 - IntroducedEnrolled HOUSEHouse FILEFile 2232 BYAN COMMITTEEACT ONRELATING JUDICIARY (SUCCESSOR TO HSBMORTGAGE 504)RELEASES. (COMPANION TO SF 2138 BY COMMITTEE ON JUDICIARY) A BILL FOR An Act relating to mortgage releases.

TLSBSection 5187HV1. (2) 87 asf/rj H.F.

2232 Section 1.

Notwithstanding the foregoing, if the mortgage secures a revolving line of credit, future advances, or other future obligations, the mortgagee is not required to file a satisfaction upon payment in full unless theHouse mortgagorFile makes2232, ap. written request to the mortgagee that the mortgage be released and, if such written request is made, the mortgagee shall file the release within thirty days after payment in full or such written request is made whichever occurs later.

2 the mortgagor makes a written request to the mortgagee that the mortgage be released and, if such written request is made, the mortgagee shall file the release within thirty days after payment in full or such written request is made whichever occurs later.

If the defendant is not a resident of this state, such action may be maintained upon the expiration of thirty days after the LSBconditions 5187HVof (2)the 87mortgage -1-have asf/rjbeen 1/3performed, H.F.without such previous request or tender.

2232 conditions of the mortgage have been performed, without such previous request or tender.

3.House File 2232, p.

3 3.

EXPLANATION______________________________ The______________________________ inclusionLINDA ofUPMEYER thisCHARLES explanationSCHNEIDER doesSpeaker notof constitutethe agreementHouse withPresident of the explanation’sSenate substanceI byhereby thecertify membersthat ofthis bill originated in the generalHouse assembly.and is known as House File 2232, Eighty-seventh General Assembly.

This______________________________ billCARMINE relatesBOAL toChief mortgageClerk releases.of the House Approved _______________, 2018 ______________________________ KIM REYNOLDS Governor

The bill strikes Code section 535B.11(5), which leaves Code chapter 655 as the sole standard and set of remedies.

The bill amends Code section 655.1 to require that within 30 days of a mortgagor fully paying off a mortgage, a mortgagee must execute, acknowledge, and record a written instrument of satisfaction referring to the mortgage.

The bill provides that if the mortgage secures a revolving line of credit, future advances, or other future obligations, the mortgagee is not required to file a satisfaction upon payment in full unless the mortgagor makes a written request to the mortgagee that the LSB 5187HV (2) 87 -2- asf/rj 2/3 H.F.

2232 mortgage be released and, if such written request is made, the mortgagee shall file the release within 30 days after payment in full or after the request is made whichever occurs later.

The bill amends Code section 655.3 to establish a penalty of $500 and to allow reasonable attorney fees to be awarded in addition to rather than included in, actual damages, where a mortgagee, or a mortgagee’s personal representative or assignee, upon full performance of the conditions of the mortgage, fails to discharge such mortgage as set forth in Code section 655.1.

The bill eliminates an authorization that provides that if the defendant is not a resident of this state, such action may be maintained upon the expiration of 30 days after the conditions of the mortgage have been performed, without such previous request of tender.

The bill also amends Code section 655.5 to increase the penalty from $100 to $500 if a mortgagee fails to file a satisfaction of judgment within 30 days of receiving a written request.

The bill creates new Code section 655.6 to provide that a mortgagee is not liable under Code section 655.3 if all of the following circumstances are present:

the mortgagee established reasonable procedures to achieve compliance with its obligations under Code section 655.3;

the mortgagee complied with that procedure in good faith;

and the mortgagee was unable to comply with its obligations because of circumstances beyond its control.

LSB 5187HV (2) 87 -3- asf/rj 3/3