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
 
                            -2-      LRB093 09802 LCB 16886 a
 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
 
                            -3-      LRB093 09802 LCB 16886 a
 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.
 
                            -4-      LRB093 09802 LCB 16886 a
 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
 
                            -5-      LRB093 09802 LCB 16886 a
 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
 
                            -6-      LRB093 09802 LCB 16886 a
 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
 
                            -7-      LRB093 09802 LCB 16886 a
 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
 
                            -8-      LRB093 09802 LCB 16886 a
 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)
 
                            -9-      LRB093 09802 LCB 16886 a
 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.......
 
                            -10-     LRB093 09802 LCB 16886 a
 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.)
 
                            -11-     LRB093 09802 LCB 16886 a
 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
 
                            -12-     LRB093 09802 LCB 16886 a
 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.".