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H.B. 404 Enrolled

             1     

SHORT SALE AMENDMENTS
             2      2013 GENERAL SESSION
             3      STATE OF UTAH
             4      Chief Sponsor: Marc K. Roberts
             5      Senate Sponsor: Curtis S. Bramble
             6     
             7      LONG TITLE
             8      General Description:
             9          This bill modifies provisions related to the reconveyance of a trust deed or release of a
             10      mortgage.
             11      Highlighted Provisions:
             12          This bill:
             13          .    provides that a title insurer or a title agent may reconvey a trust deed or release a
             14      mortgage if the beneficiary, mortgagee, or servicer agrees that partial payment of the
             15      obligation secured by the trust deed or by the mortgage is sufficient to reconvey the
             16      trust deed or to release the mortgage; and
             17          .    makes technical and conforming changes.
             18      Money Appropriated in this Bill:
             19          None
             20      Other Special Clauses:
             21          None
             22      Utah Code Sections Affected:
             23      AMENDS:
             24          57-1-40, as last amended by Laws of Utah 2006, Chapter 250
             25          57-1-41, as enacted by Laws of Utah 1995, Chapter 185
             26          57-1-42, as enacted by Laws of Utah 1995, Chapter 185
             27     
             28      Be it enacted by the Legislature of the state of Utah:
             29          Section 1. Section 57-1-40 is amended to read:

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             30           57-1-40. Reconveyance of trust deed or release of mortgage -- Procedures --
             31      Forms.
             32          (1) A title insurer or title agent may reconvey a trust deed or release a mortgage in
             33      accordance with the provisions of Subsections (2) through (6) if:
             34          (a) the obligation secured by the trust deed or mortgage has been fully paid by the title
             35      insurer or title agent; [or]
             36          (b) the obligation secured by the trust deed or mortgage has been partially paid by the
             37      title insurer or title agent in an amount agreed to by the beneficiary, mortgagee, or servicer as
             38      sufficient to release the mortgage or reconvey the trust deed; or
             39          [(b)] (c) the title insurer or title agent possesses satisfactory evidence [of the full
             40      payment of the obligation secured by a trust deed or mortgage] that an event described in either
             41      Subsection (1)(a) or (b) has occurred.
             42          (2) A title insurer or title agent may reconvey a trust deed or release a mortgage under
             43      Subsection (1) regardless of whether the title insurer or title agent is named as a trustee under a
             44      trust deed or has the authority to release a mortgage.
             45          (3) [At the time] After the obligation secured by the trust deed or mortgage is paid in
             46      full[, or at any time thereafter] or is partially paid as described in Subsection (1)(b), the title
             47      insurer or title agent shall deliver a notice of intent to release or reconvey, as described in
             48      Subsection (4), to the beneficiary, mortgagee, or servicer at:
             49          (a) the address specified in the trust deed or mortgage;
             50          (b) any address for the beneficiary or mortgagee specified in the last recorded
             51      assignment of the trust deed or mortgage;
             52          (c) any address for the beneficiary, mortgagee, or servicer specified in a request for
             53      notice recorded under Section 57-1-26 ; or
             54          (d) the address shown on any payoff statement received by the title insurer or agent
             55      from the beneficiary, mortgagee, or servicer.
             56          (4) The notice of intent to release or reconvey shall contain the name of the beneficiary
             57      or mortgagee and the servicer if loan payments on the trust deed or mortgage are collected by a

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             58      servicer, the name of the title insurer or title agent, the date, and be substantially in the
             59      following form:
             60      NOTICE OF INTENT TO RELEASE OR RECONVEY
             61          Notice is hereby given to you as follows:
             62          1. This notice concerns the (trust deed or mortgage) described as follows:
             63          (Trustor or Mortgagor): ___________________________________________
             64          (Beneficiary or Mortgagee): _______________________________________
             65          Recording information: ___________________________________________
             66          Entry Number: __________________________________________________
             67          Book Number: __________________________________________________
             68          Page Number: ___________________________________________________
             69          2. The undersigned claims [to have paid in full or possesses satisfactory evidence of
             70      the full payment of the obligation secured by the trust deed or mortgage described above] or
             71      possesses satisfactory evidence that the obligation secured by the trust deed or mortgage was
             72      paid in full or that the obligation secured by the trust deed or mortgage was partially paid in an
             73      amount agreed to by the beneficiary, mortgagee, or servicer as sufficient to release the
             74      mortgage or reconvey the trust deed.
             75          3. The undersigned will fully release the mortgage or reconvey the trust deed described
             76      in this notice unless, within 60 days from the date stated on this notice, the undersigned has
             77      received by certified mail a notice stating that the obligation secured by the trust deed or
             78      mortgage has not been paid in full [or that you otherwise object], that payment of an amount
             79      less than the whole obligation was not agreed to or was not received by the beneficiary,
             80      mortgagee, or servicer, or that the beneficiary, mortgagee, or servicer otherwise objects to the
             81      release of the mortgage or the reconveyance of the trust deed. Notice shall be mailed to the
             82      address stated on this form.
             83     
             84     
             85          (5) (a) If, within 60 days from the day on which the title insurer or title agent delivered

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             86      the notice of intent to release or reconvey in accordance with Subsections (3) and (4), a
             87      reconveyance of trust deed or release of mortgage is not recorded, and the beneficiary,
             88      mortgagee, or servicer does not send by certified mail to the title insurer or title agent a notice
             89      that the obligation secured by the trust deed or mortgage has not been paid in full, that payment
             90      of an amount less than the whole obligation was not agreed to or was not received by the
             91      beneficiary, mortgagee, or servicer, or that the beneficiary, mortgagee, or servicer objects to the
             92      release of the mortgage or reconveyance of the trust deed, the title insurer or title agent may
             93      execute, acknowledge, and record a reconveyance of a trust deed or release of a mortgage.
             94          (b) A reconveyance of a trust deed under Subsection (5)(a) shall be in substantially the
             95      following form:
             96      RECONVEYANCE OF TRUST DEED
             97          (Name of title insurer or title agent), a (title insurer or title agent) authorized to conduct
             98      business in the state does hereby reconvey, without warranty, the following trust property
             99      located in (name of county) County, state of Utah, that is covered by a trust deed naming (name
             100      of trustor) as trustor, and (name of beneficiary) as beneficiary and was recorded on (date) in
             101      Book ________ at Page _________ as Entry Number _________: (insert a description of the
             102      trust property.)
             103          The undersigned title insurer or title agent certifies as follows:
             104          1. The undersigned title insurer or title agent:
             105          a. has fully paid the obligation secured by the trust deed [or];
             106          b. has partially paid the obligation secured by the trust deed in an amount agreed to by
             107      the beneficiary or servicer as sufficient to reconvey the trust deed;
             108          c. possesses satisfactory evidence of [the] full payment of the obligation secured by the
             109      trust deed[.]; or
             110          d. possesses satisfactory evidence of partial payment of the obligation secured by the
             111      trust deed in an amount agreed to by the beneficiary or servicer as sufficient to reconvey the
             112      trust deed.
             113          2. In accordance with the requirements of Utah Code Annotated Subsections

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             114      57-1-40(3) and (4), the title insurer or title agent delivered to the beneficiary or servicer, a
             115      notice of intent to release or reconvey and a copy of the reconveyance.
             116          3. The trust deed has not been reconveyed and the title insurer or title agent did not
             117      receive, within 60 days from the day on which the title insurer or title agent delivered the notice
             118      of intent to release or reconvey, a notice from the beneficiary or servicer sent by certified mail
             119      that the obligation secured by the trust deed has not been paid in full, that payment of an
             120      amount less than the whole obligation secured by the trust deed was not agreed to or was not
             121      received by the beneficiary or servicer, or that the beneficiary or servicer objects to the
             122      reconveyance of the trust deed.
             123      ___________________________________        __________________________________
             124      (Notarization)
             125          (c) A release of a mortgage under Subsection (5)(a) shall be in substantially the
             126      following form:
             127      RELEASE OF MORTGAGE
             128          (Name of title insurer or title agent), a (title insurer or title agent) authorized to conduct
             129      business in the state does hereby release the mortgage on the following property located in
             130      (name of county) County, state of Utah, that is covered by a mortgage naming (name of
             131      mortgagor) as mortgagor, and (name of mortgagee) as mortgagee and was recorded on (date) in
             132      Book ________ at Page _________ as Entry Number _________: (insert a description of the
             133      trust property.)
             134          The undersigned title insurer or title agent certifies as follows:
             135          1. The undersigned title insurer or title agent:
             136          a. has fully paid the obligation secured by the mortgage [or];
             137          b. has partially paid the obligation secured by the mortgage in an amount agreed to by
             138      the mortgagee or servicer as sufficient to release the mortgage;
             139          c. possesses satisfactory evidence of [the] full payment of the obligation secured by the
             140      mortgage[.]; or
             141          d. possesses satisfactory evidence of partial payment of the obligation secured by the

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             142      mortgage in an amount agreed to by the mortgagee or servicer as sufficient to release the
             143      mortgage.
             144          2. In accordance with the requirements of Utah Code Annotated Subsections
             145      57-1-40(3) and (4), the title insurer or title agent delivered to the mortgagee or servicer a notice
             146      of intent to release or reconvey.
             147          3. The mortgage has not been released and the title insurer or title agent did not
             148      receive, within 60 days from the day on which the title insurer or title agent delivered the notice
             149      of intent to release or reconvey, a notice from the mortgagee or servicer sent by certified mail
             150      that the obligation secured by the mortgage has not been paid in full, that payment of an
             151      amount less than the whole obligation secured by the mortgage was not agreed to or was not
             152      received by the mortgagee or servicer, or that the mortgagee or servicer objects to the release of
             153      the mortgage.
             154      ___________________________________        __________________________________
             155      (Notarization)
             156          (d) (i) A release of mortgage or reconveyance of trust deed that is executed and
             157      notarized in accordance with Subsection (5)(b) or (c) is entitled to recordation.
             158          (ii) (A) Except as provided in Subsection (5)(d)(ii)(B), a reconveyance of a trust deed
             159      or release of a mortgage that is recorded under Subsection (5)(d)(i) is valid regardless of any
             160      deficiency in the release or reconveyance procedure not disclosed in the release of mortgage or
             161      reconveyance of trust deed.
             162          (B) If the title insurer's or title agent's signature on a release of mortgage or
             163      reconveyance of trust deed recorded under Subsection (5)(d)(ii)(A) is forged, the release of
             164      mortgage or reconveyance of trust deed is void.
             165          (6) A release of mortgage or reconveyance of trust deed under this section does not, by
             166      itself, discharge any promissory note or other obligation that was secured by the trust deed or
             167      mortgage at the time the trust deed was reconveyed or the mortgage was released.
             168          (7) This section does not limit or modify the application of Section 57-1-33.1 .
             169          Section 2. Section 57-1-41 is amended to read:

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             170           57-1-41. Objections to reconveyance or release.
             171          A title insurer or title agent may not record a reconveyance of trust deed or release of
             172      mortgage if, within 60 days from the day on which the title insurer or title agent delivered or
             173      mailed the notice of intent to release or reconvey in accordance with Subsections 57-1-40 (3)
             174      and (4), the beneficiary, mortgagee, or servicer sends a notice that:
             175          (1) the obligation secured by the trust deed or mortgage has not been paid in full [or];
             176          (2) payment of an amount less than the whole obligation was not agreed to or was not
             177      received by the beneficiary, mortgagee, or servicer; or
             178          (3) the beneficiary, mortgagee, or servicer objects to the release of the mortgage or
             179      reconveyance of the trust deed under Subsection 57-1-40 (5)(a).
             180          Section 3. Section 57-1-42 is amended to read:
             181           57-1-42. Liability of title insurer or title agent.
             182          A title insurer or title agent purporting to act under the provisions of Section 57-1-40
             183      who reconveys a trust deed or releases a mortgage is liable to the beneficiary or mortgagee for
             184      the damages suffered as a result of the reconveyance if:
             185          (1) the obligation secured by the trust deed or mortgage [has]:
             186          (a) has not been fully paid; [and] or
             187          (b) has not been partially paid in an amount agreed to by the beneficiary, mortgagee, or
             188      servicer as sufficient to release the mortgage or reconvey the trust deed; and
             189          (2) (a) the title insurer or title agent failed to comply with the provisions of Sections
             190      57-1-40 and 57-1-41 ; or
             191          (b) the title insurer or title agent acted with gross negligence or in bad faith in
             192      reconveying the trust deed.

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