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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


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