H.B. 202

1

RECONVEYANCE OF TRUST DEED OR
2 RELEASE OF MORTGAGE
3 2002 GENERAL SESSION
4 STATE OF UTAH
5 Sponsor: Thomas V. Hatch
6 This act amends Title 57, Real Estate. The act adds a definition of "deliver." The act
7 eliminates the requirement that a title insurer or title agent wait 30 days after payment in
8 full of an obligation secured by a trust deed or mortgage to give to the beneficiary,
9 mortgagee, or loan servicer a notice of intent to release or reconvey. This act makes
10 technical corrections.
11 This act affects sections of Utah Code Annotated 1953 as follows:
12 AMENDS:
13 57-1-39, as enacted by Chapter 185, Laws of Utah 1995
14 57-1-40, as enacted by Chapter 185, Laws of Utah 1995
15 Be it enacted by the Legislature of the state of Utah:
16 Section 1. Section 57-1-39 is amended to read:
17 57-1-39. Definitions.
18 As used in Sections 57-1-40 and 57-1-44 :
19 (1) "Beneficiary" means the record owner of the beneficiary's interest under a trust deed,
20 including successors in interest.
21 (2) "Deliver" or "delivered" means:
22 (a) by overnight delivery by a reputable carrier; or
23 (b) by United States certified mail or express mail.
24 [(2)] (3) "Mortgage" is as described in Section 57-1-14 .
25 [(3)] (4) "Mortgagee" means the record owner of the mortgagee's interest under a
26 mortgage, including a successor in interest.
27 [(4)] (5) "Satisfactory evidence of the full payment of the obligation secured by a trust

28 deed or mortgage" means the original cancelled check or a copy of a check, including a voucher
29 copy, payable to the beneficiary, mortgagee, or a servicer, and reasonable documentary evidence
30 that the check was intended to effect full payment under the trust deed or an encumbrance upon
31 the property covered by the trust deed.
32 [(5)] (6) "Servicer" means a person or entity that collects loan payments on behalf of a
33 beneficiary or mortgagee.
34 [(6)] (7) "Title agent" means a title insurance agent licensed as an organization under Title
35 31A, Chapter 23, Part II, Licensing of Agents, Brokers and Consultants.
36 [(7)] (8) "Title insurer" means a title insurer authorized to conduct business in the state
37 under Title 31A, Chapter 23, Part II, Licensing of Agents, Brokers and Consultants.
38 [(8)] (9) "Trust deed" is as defined in Subsection 57-1-19 (3).
39 Section 2. Section 57-1-40 is amended to read:
40 57-1-40. Reconveyance of trust deed or release of mortgage -- Procedures -- Forms.
41 (1) A title insurer or title agent may reconvey a trust deed or release a mortgage in
42 accordance with the provisions of Subsections (2) through (6) if:
43 (a) the obligation secured by the trust deed or mortgage has been fully paid by the title
44 insurer or title agent; or
45 (b) the title insurer or title agent possesses satisfactory evidence of the full payment of the
46 obligation secured by a trust deed or mortgage.
47 (2) A title insurer or title agent may reconvey a trust deed or release a mortgage under
48 Subsection (1) regardless of whether the title insurer or title agent is named as a trustee under a
49 trust deed or has the authority to release a mortgage.
50 (3) [No sooner than 30 days after payment in full of the obligation secured by a trust deed
51 or mortgage] At the time the obligation secured by the trust deed or mortgage is paid in full, or at
52 any time thereafter, the title insurer or title agent shall deliver a notice of intent to release or
53 reconvey and a copy of the release or reconveyance to be recorded, as described in Subsection (4),
54 to the beneficiary, mortgagee, or servicer[, or send by certified mail to the beneficiary, mortgagee,
55 or servicer] at:
56 (a) the address specified in the trust deed or mortgage[, at];
57 (b) any address for the beneficiary or mortgagee specified in the last recorded assignment
58 of the trust deed or mortgage[, and at];

59 (c) any address for the beneficiary, mortgagee, or servicer specified in a request for notice
60 recorded under Section 57-1-26 [, a notice of intent to release or reconvey and a copy of the release
61 or reconveyance to be recorded as provided in Sections (4) and (5).]; or
62 (d) the address shown on any payoff statement received by the title insurer or agent from
63 the beneficiary, mortgagee, or servicer.
64 (4) The notice of intent to release or reconvey shall contain the name of the beneficiary or
65 mortgagee and the servicer if loan payments on the trust deed or mortgage are collected by a
66 servicer, the name of the title insurer or title agent, the date, and be substantially in the following
67 form:
68 NOTICE OF INTENT TO RELEASE OR RECONVEY
69 Notice is hereby given to you as follows:
70 1. This notice concerns the (trust deed or mortgage) described as follows:
71 (Trustor or Mortgagor):____________________________________________
72 (Beneficiary or Mortgagee):________________________________________
73 Recording information:____________________________________________
74 Entry Number:___________________________________________________
75 Book Number:_______________________________________________
76 Page Number:_______________________________________________
77 2. The undersigned claims to have paid in full or possesses satisfactory evidence of the full
78 payment of the obligation secured by the trust deed or mortgage described above.
79 3. The undersigned will fully release the mortgage or reconvey the trust deed described in
80 this notice unless, within 60 days from the date stated on this notice, the undersigned has received
81 by certified mail a notice stating that the obligation secured by the trust deed or mortgage has not
82 been paid in full or that you otherwise object to the release of the mortgage or the reconveyance
83 of the trust deed. Notice shall be mailed to the address stated on this form.
84 4. A copy of the (release of mortgage or reconveyance of trust deed) is enclosed with this
85 notice.
86

(Signature of title insurer or title agent)

87

(Address of title insurer or title agent)

88 (5) (a) If, within 60 days from the day on which the title insurer or title agent delivered [or
89 mailed] the notice of intent to release or reconvey in accordance with Subsections (3) and (4), the

90 beneficiary, mortgagee, or servicer does not send by certified mail to the title insurer or title agent
91 a notice that the obligation secured by the trust deed or mortgage has not been paid in full or that
92 the beneficiary, mortgagee, or servicer objects to the release of the mortgage or reconveyance of
93 the trust deed, the title insurer or title agent may execute, acknowledge, and record a reconveyance
94 of a trust deed or release of a mortgage.
95 (b) A reconveyance of a trust deed under Subsection (5)(a) shall be in substantially the
96 following form:
97 RECONVEYANCE OF TRUST DEED
98 (Name of title insurer or title agent), a (title insurer or title agent) authorized to conduct
99 business in the state does hereby reconvey, without warranty, the following trust property located
100 in (name of county) County, state of Utah, that is covered by a trust deed naming (name of trustor)
101 as trustor, and (name of beneficiary) as beneficiary and was recorded on (date) in Book ________
102 at Page _________ as Entry Number _________: (insert a description of the trust property.)
103 The undersigned title insurer or title agent certifies as follows:
104 1. The undersigned title insurer or title agent has fully paid the obligation secured by the
105 trust deed or possesses satisfactory evidence of the full payment of the obligation secured by the
106 trust deed.
107 2. [No sooner than 30 days after payment in full of the obligation secured by the trust deed,
108 the] In accordance with the requirements of Utah Code Annotated Subsections 57-1-40 (3) and (4),
109 the title insurer or title agent delivered [or sent by certified mail] to the beneficiary or servicer [at
110 the address specified in the trust deed, at any address for the beneficiary specified in the last
111 recorded assignment of the trust deed, and at any address for the beneficiary or servicer specified
112 in a request for notice recorded under Section 57-1-26 ], a notice of intent to release or reconvey
113 and a copy of the reconveyance.
114 3. The title insurer or title agent did not receive, within 60 days from the day on which the
115 title insurer or title agent delivered [or mailed] the notice of intent to release or reconvey, a notice
116 from the beneficiary or servicer sent by certified mail that the obligation secured by the trust deed
117 has not been paid in full or that the beneficiary or servicer objects to the reconveyance of the trust
118 deed.
119 ___________________________________ ___________________________________
120 (Notarization)

(Signature of title insurer or title agent)

121 (c) A release of a mortgage under Subsection (5)(a) shall be in substantially the following
122 form:
123 RELEASE OF MORTGAGE
124 (Name of title insurer or title agent), a (title insurer or title agent) authorized to conduct
125 business in the state does hereby release the mortgage on the following property located in (name
126 of county) County, state of Utah, that is covered by a mortgage naming (name of mortgagor) as
127 mortgagor, and (name of mortgagee) as mortgagee and was recorded on (date) in Book ________
128 at Page _________ as Entry Number _________: (insert a description of the trust property.)
129 The undersigned title insurer or title agent certifies as follows:
130 1. The undersigned title insurer or title agent has fully paid the obligation secured by the
131 mortgage or possesses satisfactory evidence of the full payment of the obligation secured by the
132 mortgage.
133 2. [No sooner than 30 days after payment in full of the obligation secured by the mortgage,
134 the] In accordance with the requirements of Utah Code Annotated Subsections 57-1-40 (3) and (4),
135 the title insurer or title agent delivered to the mortgagee [or sent by certified mail to the mortgagee]
136 or servicer [at the address specified in the mortgage and at any address for the mortgagee specified
137 in the last recorded assignment of the mortgage,] a notice of intent to release or reconvey and a
138 copy of the release.
139 3. The title insurer or title agent did not receive, within 60 days from the day on which the
140 title insurer or title agent delivered [or mailed] the notice of intent to release or reconvey, a notice
141 from the mortgagee or servicer sent by certified mail that the obligation secured by the mortgage
142 has not been paid in full or that the mortgagee or servicer objects to the release of the mortgage.
143 ___________________________________ ___________________________________
144 (Notarization)

(Signature of title insurer or title agent)

145 (d) (i) A release of mortgage or reconveyance of trust deed that is executed and notarized
146 in accordance with [Subsections] Subsection (5)(b) or (c) is entitled to recordation.
147 (ii) (A) Except as provided in Subsection (5)(d)(ii)(B), a reconveyance of a trust deed or
148 release of a mortgage that is recorded under Subsection (5)(d)(i) is valid regardless of any
149 deficiency in the release or reconveyance procedure not disclosed in the release of mortgage or
150 reconveyance of trust deed.
151 (B) If the title insurer's or title agent's signature on a release of mortgage or reconveyance

152 of trust deed recorded under Subsection (5)(d)(ii)(A) is forged, the release of mortgage or
153 reconveyance of trust deed is void.
154 (6) A release of mortgage or reconveyance of trust deed under this section does not, by
155 itself, discharge [an] any promissory note or other obligation that was secured by the trust deed or
156 mortgage at the time the trust deed was reconveyed or the mortgage was released.




Legislative Review Note
as of 11-15-01 2:17 PM

A limited legal review of this legislation raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel