House Bill text for HB0145

HOUSE BILL 145

49th legislature - STATE OF NEW MEXICO - first session, 2009

INTRODUCED BY

Elias Barela

FOR THE

COURTS, CORRECTIONS AND JUSTICE COMMITTEE

AN ACT

RELATING TO REAL PROPERTY; ENACTING THE UNIFORM RESIDENTIAL MORTGAGE SATISFACTION ACT.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

ARTICLE 1

DEFINITIONS AND GENERAL PROVISIONS

Section 101. SHORT TITLE.--This act may be cited as the "Uniform Residential Mortgage Satisfaction Act".

Section 102. DEFINITIONS.--As used in the Uniform Residential Mortgage Satisfaction Act:

A. "address for giving a notification" means, for the purpose of a particular type of notification, the most recent address provided in a document by the intended recipient of the notification to the person giving the notification, unless the person giving the notification knows of a more accurate address, in which case the term means that address;

B. "day" means a calendar day;

C. "document" means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form;

D. "electronic" means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic or similar capabilities;

E. "entitled person" means a person liable for payment or performance of the obligation secured by the real property described in a security instrument or the landowner;

F. "good faith" means honesty in fact and the observance of reasonable commercial standards of fair dealing;

G. "landowner" means a person that, before foreclosure, has the right of redemption in the real property described in a security instrument. "Landowner" does not include a person that holds only a lien on the real property;

H. "notification" means a document containing information required pursuant to the Uniform Residential Mortgage Satisfaction Act and signed by the person required to provide the information;

I. "payoff amount" means the sum necessary to satisfy a secured obligation;

J. "payoff statement" means a document containing the information specified in Subsection D of Section 201 of the Uniform Residential Mortgage Satisfaction Act;

K. "person" means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, public corporation, government or governmental subdivision, agency or instrumentality, or any other legal or commercial entity;

L. "recording data" means the date, book and page number and document number that indicate where a document is recorded in the office of the county clerk in the county or counties designated in Section 14-9-1 NMSA 1978;

M. "residential real property" means real property located in this state that is used primarily for personal, family or household purposes and is improved by one to four dwelling units;

N. "secured creditor" means a person that holds or is the beneficiary of a security interest or that is authorized both to receive payments on behalf of a person that holds a security interest and to record a satisfaction of the security instrument upon receiving full performance of the secured obligation. "Secured creditor" does not include a trustee pursuant to a security instrument;

O. "secured obligation" means an obligation the payment or performance of which is secured by a security interest;

P. "security instrument" means an agreement, however denominated, that creates or provides for an interest in residential real property to secure payment or performance of an obligation, whether or not it also creates or provides for a lien on personal property;

Q. "security interest" means an interest in residential real property created by a security instrument;

R. "sign" means, with present intent to authenticate or adopt a document:

(1) to execute or adopt a tangible symbol; or

(2) to attach to or logically associate with the document an electronic sound, symbol or process;

S. "state" means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands or any territory or insular possession subject to the jurisdiction of the United States; and

T. "submit for recording" means to deliver, with required fees, a document sufficient to be recorded pursuant to the Uniform Residential Mortgage Satisfaction Act, to the office of the county clerk in the county or counties designated in Section 14-9-1 NMSA 1978.

Section 103. NOTIFICATION--MANNER OF GIVING--EFFECTIVE DATE.--

A. A person gives a notification by:

(1) depositing it with the United States postal service with first-class postage paid or with a commercially reasonable delivery service with cost of delivery provided, properly addressed to the recipient's address for giving a notification;

(2) sending it by facsimile transmission, electronic mail or other electronic transmission to the recipient's address for giving a notification, but only if the recipient agreed to receive notification in that manner; or

(3) causing it to be received at the address for giving a notification within the time that it would have been received if given pursuant to Paragraph (1) of this subsection.

B. A notification is effective:

(1) the day after it is deposited with a commercially reasonable delivery service for overnight delivery;

(2) three days after it is deposited with the United States postal service, first-class mail with postage prepaid, or with a commercially reasonable delivery service for delivery other than by overnight delivery;

(3) the day it is given, if given pursuant to Paragraph (2) of Subsection A of this section; or

(4) the day it is received, if given by a method other than as provided in Paragraph (1) or (2) of Subsection A of this section.

C. If the Uniform Residential Mortgage Satisfaction Act or a notification given pursuant to that act requires performance on or by a certain day and that day is a Saturday, Sunday or legal holiday pursuant to the laws of New Mexico or the United States, the performance is sufficient if performed on the next day that is not a Saturday, Sunday or legal holiday.

Section 104. DOCUMENT OF RESCISSION--EFFECT--LIABILITY FOR WRONGFUL RECORDING.--

A. As used in this section, "document of rescission" means a document stating that an identified satisfaction of a security instrument or affidavit of satisfaction of a security instrument was recorded erroneously, the secured obligation remains unsatisfied and the security instrument remains in force.

B. If a person records a satisfaction of a security instrument or affidavit of satisfaction of a security instrument in error, the person may execute and record a document of rescission. Upon recording, the document rescinds an erroneously recorded satisfaction or affidavit.

C. A recorded document of rescission has no effect on the rights of a person that:

(1) acquired an interest in the real property described in a security instrument after the recording of the satisfaction of the security instrument or affidavit of satisfaction of the security instrument and before the recording of the document of rescission; and

(2) would otherwise have priority over or take free of the lien created by the security instrument pursuant to Section 14-9-2 NMSA 1978.

D. A person that erroneously or wrongfully records a document of rescission is liable to any person injured thereby for:

(1) the actual damages caused by the recording; and

(2) reasonable attorney fees and costs.

ARTICLE 2

SECURED CREDITOR TO RECORD SATISFACTION; LIABILITY FOR FAILURE

Section 201. PAYOFF STATEMENT--REQUEST AND CONTENT.--

A. An entitled person, or an agent authorized by an entitled person to request a payoff statement, may give to the secured creditor a notification requesting a payoff statement for a specified payoff date not more than thirty days after the notification is given. The notification shall contain:

(1) the entitled person's name;

(2) if given by a person other than an entitled person, the name of the person giving the notification and a statement that the person is an authorized agent of the entitled person;

(3) a direction whether the statement is to be sent to the entitled person or that person's authorized agent;

(4) the address to which the creditor shall send the statement; and

(5) sufficient information to enable the creditor to identify the secured obligation and the real property encumbered by the security interest.

B. If a notification pursuant to Subsection A of this section directs the secured creditor to send the payoff statement to a person identified as an authorized agent of the entitled person, the secured creditor shall send the statement to the agent, unless the secured creditor knows that the entitled person has not authorized the request.

C. Within ten days after the effective date of a notification that complies with Subsection A of this section, the secured creditor shall issue a payoff statement and send it as directed pursuant to Paragraph (3) of Subsection A of this section in the manner prescribed in Section 103 of the Uniform Residential Mortgage Satisfaction Act for giving a notification. A secured creditor that sends a payoff statement to the entitled person or the authorized agent shall not claim that the notification did not satisfy Subsection A of this section. If the person to whom the notification is given once held an interest in the secured obligation but has since assigned that interest, the person need not send a payoff statement but shall give a notification of the assignment to the person to whom the payoff statement otherwise would have been sent, providing the name and address of the assignee.

D. A payoff statement shall contain:

(1) the date on which it was prepared and the payoff amount as of that date, including the amount by type of each fee, charge or other sum included within the payoff amount;

(2) the information reasonably necessary to calculate the payoff amount as of the requested payoff date, including the per diem interest amount; and

(3) the payment cutoff time, if any, the address or place where payment shall be made and any limitation as to the authorized method of payment.

E. A payoff statement may contain the amount of any fees authorized pursuant to this section not included in the payoff amount.

F. A secured creditor may not qualify a payoff amount or state that it is subject to change before the payoff date unless the payoff statement provides information sufficient to permit the entitled person or the person's authorized agent to request an updated payoff amount at no charge and to obtain that updated payoff amount during the secured creditor's normal business hours on the payoff date or the immediately preceding business day.

G. A secured creditor shall provide upon request one payoff statement without charge during any six-month period. A secured creditor may charge a fee of twenty-five dollars ($25.00) for each additional payoff statement requested during that six-month period. However, a secured creditor shall not charge a fee for providing an updated payoff amount pursuant to Subsection F of this section or a corrected payoff statement pursuant to Subsection A of Section 202 of the Uniform Residential Mortgage Satisfaction Act.

H. Unless the security instrument provides otherwise, a secured creditor is not required to send a payoff statement by means other than first-class mail. If the creditor agrees to send a statement by another means, it may charge a reasonable fee for complying with the requested manner of delivery.

I. Except as otherwise provided in Section 205 of the Uniform Residential Mortgage Satisfaction Act, if a secured creditor to which a notification has been given pursuant to Subsection A of this section does not send a timely payoff statement that substantially complies with Subsection D of this section, the creditor is liable to the entitled person for any actual damages caused by the failure plus five hundred dollars ($500), but not punitive damages. A creditor that does not pay the damages provided in this subsection within thirty days after receipt of a notification demanding payment may also be liable for reasonable attorney fees and costs.

Section 202. UNDERSTATED PAYOFF STATEMENT--CORRECTION--

EFFECT.--

A. If a secured creditor determines that the payoff amount it provided in a payoff statement was understated, the creditor may send a corrected payoff statement. If the entitled person or the person's authorized agent receives and has a reasonable opportunity to act upon a corrected payoff statement before making payment, the corrected statement supersedes an earlier statement.

B. A secured creditor that sends a payoff statement containing an understated payoff amount shall not deny the accuracy of the payoff amount as against any person that reasonably and detrimentally relies upon the understated payoff amount.

C. The Uniform Residential Mortgage Satisfaction Act does not:

(1) affect the right of a secured creditor to recover any sum that it did not include in a payoff amount from any person liable for payment of the secured obligation; or

(2) limit any claim or defense that a person liable for payment of a secured obligation may have pursuant to any law other than the Uniform Residential Mortgage Satisfaction Act.

Section 203. SECURED CREDITOR TO SUBMIT SATISFACTION FOR RECORDING--LIABILITY FOR FAILURE.--

A. A secured creditor shall submit for recording a satisfaction of a security instrument within thirty days after the creditor receives full payment or performance of the secured obligation. If a security instrument secures a line of credit or future advances, the secured obligation is fully performed only if, in addition to full payment, the secured creditor has received a notification requesting the creditor to terminate the line of credit or containing a statement sufficient to terminate the effectiveness of the provision for future advances in the security instrument.

B. Except as otherwise provided in Section 205 of the Uniform Residential Mortgage Satisfaction Act, a secured creditor that is required to submit a satisfaction of a security instrument for recording and does not do so by the end of the period specified in Subsection A of this section is liable to the landowner for any actual damages caused by the failure, but not punitive damages.

C. Except as otherwise provided in Subsection D of this section and in Section 205 of the Uniform Residential Mortgage Satisfaction Act, a secured creditor that is required to submit a satisfaction of a security instrument for recording and does not do so by the end of the period specified in Subsection A of this section is also liable to the landowner for five hundred dollars ($500) and any reasonable attorney fees and court costs incurred if, after the expiration of the period specified in Subsection A of this section:

(1) the landowner gives the creditor a notification, by any method authorized by Section 103 of the Uniform Residential Mortgage Satisfaction Act that provides proof of receipt, demanding that the creditor submit a satisfaction for recording; and

(2) the creditor does not submit a satisfaction for recording within thirty days after receipt of the notification.

D. Subsection C of this section does not apply if the secured creditor received full payment or performance of the secured obligation before the effective date of the Uniform Residential Mortgage Satisfaction Act.

Section 204. FORM AND EFFECT OF SATISFACTION.--

A. A document is a satisfaction of a security instrument if it:

(1) identifies the security instrument, the original parties to the security instrument, the recording data for the security instrument and the office in which the security instrument is recorded;

(2) states that the person signing the satisfaction is the secured creditor;

(3) contains a legal description of the real property identified in the security instrument, but only if a legal description is necessary for a satisfaction to be properly indexed;

(4) contains language terminating the effectiveness of the security instrument; and

(5) is signed by the secured creditor and acknowledged as required by law for a conveyance of an interest in real property.

B. The county clerk shall accept for recording a satisfaction of a security instrument, unless:

(1) an amount equal to or greater than the applicable recording fees is not tendered;

(2) the document is submitted by a method or in a medium not authorized by the county clerk for paper documents or for electronic documents pursuant to the Uniform Electronic Real Property Recording Act; or

(3) the document is not signed by the secured creditor and acknowledged as required by law for a conveyance of an interest in real property.

Section 205. LIMITATION OF SECURED CREDITOR'S LIABILITY.--A secured creditor is not liable pursuant to the Uniform Residential Mortgage Satisfaction Act if it:

A. established a reasonable procedure to achieve compliance with its obligations pursuant to the Uniform Residential Mortgage Satisfaction Act;

B. complied with that procedure in good faith; and

C. was unable to comply with its obligations because of circumstances beyond its control.

ARTICLE 3

SATISFACTION BY AFFIDAVIT

Section 301. DEFINITION--ELIGIBILITY TO SERVE AS SATISFACTION AGENT.--

A. As used in this article:

(1) "satisfaction agent" means a person who acts for and with the authority of a landowner to sign and submit for recording an affidavit of satisfaction pursuant to this article; and

(2) "title insurance company" means an organization authorized to conduct the business of insuring titles to real property in this state.

B. Only the following may serve as a satisfaction agent pursuant to this article:

(1) a title insurance company, acting directly or through an agent authorized to act as a satisfaction agent; or

(2) an attorney licensed to practice law in New Mexico and in good standing.

Section 302. AFFIDAVIT OF SATISFACTION--NOTIFICATION TO SECURED CREDITOR.--

A. If a secured creditor has not submitted for recording a satisfaction of a security instrument within the period specified in Subsection A of Section 203 of the Uniform Residential Mortgage Satisfaction Act, a satisfaction agent may give the secured creditor a notification that the satisfaction agent intends to submit for recording an affidavit of satisfaction of the security instrument. The notification shall include:

(1) the identity and mailing address of the satisfaction agent;

(2) identification of the security instrument for which a recorded satisfaction is sought, including the names of the original parties to, and the recording data for, the security instrument;

(3) a statement that the satisfaction agent has reasonable grounds to believe that:

(a) the real property described in the security instrument is residential real property;

(b) the person to which the notification is being given is the secured creditor; and

(4) a statement that a satisfaction of the security instrument does not appear of record; and

(5) a statement that the satisfaction agent, acting with the authorization of the owner of the real property described in the security instrument, intends to sign and submit for recording an affidavit of satisfaction of the security instrument unless, within thirty days after the effective date of the notification:

(a) the secured creditor submits a satisfaction of the security instrument for recording;

(b) the satisfaction agent receives from the secured creditor a notification stating that the secured obligation remains unsatisfied; or

(c) the satisfaction agent receives from the secured creditor a notification stating that the secured creditor has assigned the security instrument and identifying the name and address of the assignee.

B. A notification pursuant to Subsection A of this section shall be sent by a method authorized by Section 103 of the Uniform Residential Mortgage Satisfaction Act that provides proof of receipt to the secured creditor's address for giving a notification for the purpose of requesting a payoff statement or, if the satisfaction agent cannot ascertain that address, to the secured creditor's address for notification for any other purpose.

C. The Uniform Residential Mortgage Satisfaction Act does not require a person to agree to serve as a satisfaction agent. Any such agreement shall be in a record signed by the satisfaction agent or its authorized agent in order to be enforceable.

Section 303. AFFIDAVIT OF SATISFACTION--AUTHORIZATION TO SUBMIT FOR RECORDING.--

A. Subject to Subsections B and C of this section, a satisfaction agent may sign and submit for recording an affidavit of satisfaction of a security instrument complying with Section 304 of the Uniform Residential Mortgage Satisfaction Act if:

(1) the secured creditor has not, to the knowledge of the satisfaction agent, submitted for recording a satisfaction of a security instrument within thirty days after the effective date of a notification complying with Subsection A of Section 302 of the Uniform Residential Mortgage Satisfaction Act; or

(2) the secured creditor authorizes the satisfaction agent to do so.

B. A satisfaction agent shall not sign and submit for recording an affidavit of satisfaction of a security instrument if it has received a notification pursuant to Subparagraph (b) of Paragraph (5) of Subsection A of Section 302 of the Uniform Residential Mortgage Satisfaction Act stating that the secured obligation remains unsatisfied.

C. If a satisfaction agent receives a notification pursuant to Subparagraph (c) of Paragraph (5) of Subsection A of Section 302 of the Uniform Residential Mortgage Satisfaction Act stating that the security instrument has been assigned, the satisfaction agent shall not submit for recording an affidavit of satisfaction of the security instrument without:

(1) giving a notification of intent to submit for recording an affidavit of satisfaction to the identified assignee at the identified address; and

(2) complying with Section 302 of the Uniform Residential Mortgage Satisfaction Act with respect to the identified assignee.

Section 304. AFFIDAVIT OF SATISFACTION--CONTENT.--An affidavit of satisfaction of a security instrument shall:

A. identify the original parties to the security instrument, the secured creditor, the recording data for the security instrument, and, if necessary for proper indexing of the affidavit, a legal description of the real property identified in the security instrument;

B. state the basis upon which the person signing the affidavit is a satisfaction agent;

C. state that the person signing the affidavit has reasonable grounds to believe that the real property described in the security instrument is residential real property;

D. state that the person signing the affidavit has reasonable grounds to believe that the secured creditor has received full payment or performance of the secured obligation;

E. state that the person signing the affidavit, acting with the authority of the owner of the real property described in the security instrument, gave notification to the secured creditor of its intention to sign and submit for recording an affidavit of satisfaction;

F. describe the method by which the person signing the affidavit gave notification in compliance with the Uniform Residential Mortgage Satisfaction Act;

G. state that:

(1) more than thirty days have elapsed since the effective date of that notification and the person signing the affidavit has no knowledge that the secured creditor has submitted a satisfaction for recording and has not received a notification that the secured obligation remains unsatisfied; or

(2) the secured creditor authorized the person signing the affidavit to sign and record an affidavit of satisfaction; and

H. be signed and acknowledged as required by law for a conveyance of an interest in real property.

Section 305. AFFIDAVIT OF SATISFACTION--FORM.--No particular phrasing of an affidavit of satisfaction is required. The following form of affidavit, when properly completed, is sufficient to satisfy the requirements of Subsection A of Section 304 of the Uniform Residential Mortgage Satisfaction Act:

_________________________________

[Date of Affidavit]

AFFIDAVIT OF SATISFACTION

The undersigned hereby states as follows:

1. I am: [check appropriate box]

□ an officer or a duly appointed agent of

_________________________________ (the "Company"), which is

[Name of title insurance company]

authorized to transact the business of insuring titles to interests in real property in this state, and I have been authorized by the Company to sign and submit for recording an affidavit of satisfaction.

□ an attorney licensed to practice law in this state and in good standing.

2. I am signing this Affidavit of Satisfaction to evidence full payment or performance of the obligations secured by real property covered by the following security instrument (the "security instrument") currently held by ______________ (the "secured creditor"):

Title of security instrument: __________________________

Original parties to security instrument: _______________

County and state of recording: _________________________

Recording data for security instrument: ________________

Legal description, if necessary for proper indexing: ___

3. I have reasonable grounds to believe that:

A. the secured creditor has received full payment or performance of the balance of the obligations secured by the security instrument; and

B. the real property described in the security instrument constitutes residential real property.

4. With the authorization of the owner of the real property described in the security instrument, I gave notification to the secured creditor by _______________________ _______________________________________________________________

[method authorized by Section 103 of the Uniform Residential Mortgage Satisfaction Act that provides proof of receipt]

that I would sign and record an affidavit of satisfaction of the security instrument if, within thirty days after the effective date of the notification, the secured creditor did not submit a satisfaction of the security interest for recording or give notification that the secured obligation remains unsatisfied.

5. [Check appropriate box]

□ The thirty-day period identified in Paragraph 4 has elapsed, I have no knowledge that the secured creditor has submitted a satisfaction for recording, and I have not received notification that the secured obligation remains unsatisfied.

□ The secured creditor responded to the notification in Paragraph 4 of this affidavit by authorizing me to execute and record this affidavit of satisfaction.

__________________________________

(Signature of Satisfaction Agent)

(Notarization).

Section 306. AFFIDAVIT OF SATISFACTION--EFFECT.--

A. Upon recording, an affidavit substantially complying with the requirements of Section 304 of the Uniform Residential Mortgage Satisfaction Act constitutes a satisfaction of the security instrument described in the affidavit.

B. The recording of an affidavit of satisfaction of a security instrument does not by itself extinguish any liability of a person for payment or performance of the secured obligation.

C. A county clerk shall not refuse to accept for recording an affidavit of satisfaction of a security instrument unless:

(1) an amount equal to or greater than the applicable recording fees is not tendered;

(2) the affidavit is submitted by a method or in a medium not authorized by the county clerk for paper documents or for electronic documents pursuant to the Uniform Electronic Real Property Recording Act; or

(3) the affidavit is not signed by the satisfaction agent and acknowledged as required by law for a conveyance of an interest in real property.

Section 307. LIABILITY OF SATISFACTION AGENT.--

A. Except as otherwise provided in Subsection B of this section, a satisfaction agent that records an affidavit of satisfaction of a security instrument erroneously or with knowledge that the statements contained in the affidavit are false is liable to the secured creditor for any actual damages caused by the recording and reasonable attorney fees and costs.

B. A satisfaction agent that records an affidavit of satisfaction of a security instrument erroneously is not liable if the agent properly complied with the provisions of this article and the secured creditor did not respond in a timely manner to the notification pursuant to Paragraph (5) of Subsection A of Section 302 of the Uniform Residential Mortgage Satisfaction Act.

C. If a satisfaction agent records an affidavit of satisfaction of a security instrument with knowledge that the statements contained in the affidavit are false, this section does not preclude:

(1) a court from awarding punitive damages on account of the conduct;

(2) the secured creditor from proceeding against the satisfaction agent pursuant to any law of New Mexico other than the Uniform Residential Mortgage Satisfaction Act; or

(3) the enforcement of any criminal statute prohibiting the conduct.

ARTICLE 4

MISCELLANEOUS PROVISIONS

Section 401. UNIFORMITY OF APPLICATION AND CONSTRUCTION.--In applying and construing the Uniform Residential Mortgage Satisfaction Act, consideration shall be given to the need to promote uniformity of the law with respect to its subject matter among states that enact it.

Section 402. RELATION TO FEDERAL ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT.--The Uniform Residential Mortgage Satisfaction Act modifies, limits and supersedes the federal Electronic Signatures in Global and National Commerce Act but does not modify, limit or supersede Section 101(c) of that act or authorize electronic delivery of any of the notices described in Section 103(b) of that act.

Section 403. RELATION TO OTHER LAWS.--

A. The provisions of the Uniform Residential Mortgage Satisfaction Act are in addition to the provisions of Section 48-7-4.1 NMSA 1978.

B. A satisfaction of a security interest or an affidavit of satisfaction of a security interest recorded pursuant to the provisions of the Uniform Residential Mortgage Satisfaction Act is the equivalent of a release recorded pursuant to the provisions of Section 48-7-4 NMSA 1978.

C. The Uniform Residential Mortgage Satisfaction Act does not relieve a person from the obligation to record a full satisfaction or release pursuant to the provisions of Section 48-7-4 NMSA 1978 or the imposition of a penalty pursuant to the provisions of Section 48-7-5 NMSA 1978; however, the landowner may elect to receive a penalty under only one act.

Section 404. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2009.

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