PRINTER'S NO. 2964
No. 2097 Session of 2007
INTRODUCED BY GRELL, BELFANTI, BOYD, CALTAGIRONE, CAPPELLI,
COHEN, CREIGHTON, DENLINGER, FABRIZIO, FAIRCHILD, FLECK,
FREEMAN, GEIST, GIBBONS, GINGRICH, HENNESSEY, HERSHEY,
M. KELLER, KILLION, KIRKLAND, KORTZ, MANDERINO, MELIO,
R. MILLER, MOUL, NAILOR, O'NEILL, PICKETT, PYLE, QUINN, RAPP,
ROHRER, SIPTROTH, SONNEY, STERN AND THOMAS, DECEMBER 6, 2007
REFERRED TO COMMITTEE ON COMMERCE, DECEMBER 6, 2007
AN ACT
1 Amending the act of December 9, 2002 (P.L.1530, No.197),
2 entitled "An act relating to the satisfaction of residential
3 and other mortgages; providing for certain forms; and making
4 repeals," further defining "payoff statement" and
5 "residential mortgage"; and providing for residential
6 mortgage payoff statements.
7 The General Assembly of the Commonwealth of Pennsylvania
8 hereby enacts as follows:
9 Section 1. The definitions of "payoff statement" and
10 "residential mortgage" in section 2 of the act of December 9,
11 2002 (P.L.1530, No.197), known as the Mortgage Satisfaction Act,
12 are amended to read:
13 Section 2. Definitions.
14 The following words and phrases when used in this act shall
15 have the meanings given to them in this section unless the
16 context clearly indicates otherwise:
17 * * *
18 "Payoff statement." [A statement issued by a mortgagee or
1 agent of the mortgagee of the amount of the unpaid balance of a
2 loan secured by a mortgage, including principal, interest and
3 other charges properly assessed under the loan documentation of
4 the mortgage and interest on a per diem basis for the unpaid
5 balance.] A written statement by the mortgagee which sets forth
6 the amounts required as of the date of preparation to satisfy
7 fully all obligations secured by the mortgage which is the
8 subject of the payoff statement and shall include information
9 reasonably necessary to calculate the payoff amount on a per
10 diem basis for a period of time during which the amount of the
11 per diem is currently ascertainable.
12 * * *
13 "Residential mortgage." A mortgage creating a specific lien
14 upon real estate within this Commonwealth containing four or
15 fewer residential units, including residential condominium or
16 cooperative units[.], which mortgage is not collateral for the
17 exempted transaction as defined in the Truth in Lending Act
18 (Public Law 90-321, 15 U.S.C. § 1601 et seq.).
19 Section 2. The act is amended by adding a section to read:
20 Section 2.1. Residential mortgages; requirement of payoff
21 statements; effect.
22 (a) Limited to residential mortgages.--This section applies
23 only to residential mortgages.
24 (b) Payoff statement required.--At any time that a mortgagor
25 reasonably expects that his or her residential mortgage is going
26 to be paid off, such mortgagor, the duly appointed agent or
27 attorney for such mortgagor or the person designated to act as
28 the settlement officer may request a payoff statement from the
29 mortgagee.
30 (1) Such request shall be in writing, signed by the
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1 mortgagor, agent, attorney or the designated settlement
2 officer, and sent postage prepaid by first class mail to the
3 mortgagee at the address last designated by the mortgagee for
4 receiving such requests or, if no such address is given, to
5 the mailing address given for payments. Such request shall
6 include a statement that it is a request for a payoff
7 statement under this act. In lieu of a mailed written
8 request, the request may be sent and signed electronically if
9 an electronic address is provided by the mortgagee for that
10 purpose or by telephonic facsimile if a facsimile telephone
11 number is provided by the mortgagee for that purpose.
12 (2) The mortgagee may, but shall not be required to,
13 look into the authenticity of or validate any such request or
14 look into the authority of the person executing the request
15 provided that the document appears genuine on its face.
16 (3) The mortgagee shall have ten business days from the
17 date of receipt of a request in compliance with this section
18 to deliver the payoff statement to the person properly
19 requesting the same. The mortgagee may impose a reasonable
20 fee for the request. A fee not exceeding $10 shall be
21 presumed reasonable. If so requested, the mortgagee may
22 respond in a shorter time period and impose an additional
23 charge for the service.
24 (4) The payoff statement shall be sent to the person
25 requesting the same, or their designee, by prepaid first
26 class mail unless another means has been agreed to.
27 (5) Failure of the mortgagee to deliver a payoff
28 statement without just cause shall subject the mortgagee to a
29 civil penalty as liquidated damages, payable to the mortgagor
30 or other party suffering actual damages, of $100 for every
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1 day such notice is late, which penalty shall not exceed
2 $1,000.
3 (6) The mortgagee may not condition satisfaction of a
4 residential mortgage other than on satisfaction of the
5 indebtedness secured by that mortgage, including recording
6 costs and, if applicable, termination of the mortgagee's
7 obligation to make additional advances secured by the
8 residential mortgage concerned.
9 (c) Right of title insurance company to payoff statement.--
10 When a claim has been made under a residential title insurance
11 policy insuring title to property subject to a residential
12 mortgage, the issuing title insurance company may request a
13 payoff statement from any such mortgagee in which case the
14 provisions of subsection (b) shall apply to such request,
15 provided, however, that the notice shall be signed by an
16 employee of the requesting title insurance company and may be
17 sent to the mortgagee at an address reasonably determined by the
18 requesting title insurance company to be likely to reach an
19 appropriate office of the mortgagee.
20 (d) Effect of payoff statement.--Any settlement officer or
21 attorney providing closing and settlement services for a real
22 estate transaction shall be entitled to reasonably rely on the
23 amounts that are set forth in a payoff statement issued by the
24 mortgagee in accordance with this act for the time frame set
25 forth therein and shall not be liable to the mortgagee for any
26 underpayment unless a written corrective amendment is received
27 by such person prior to the closing of the transaction.
28 (e) Prohibited content of payoff statement.--Such a payoff
29 statement must provide for a sum certain which shall not be
30 subject to adjustment except by a written corrective amendment
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1 which is received by the settlement officer before settlement.
2 (f) Obligation to satisfy; liability.--The mortgagee shall
3 be obligated to satisfy the mortgage or release the property
4 subject to such real estate transaction from the lien of the
5 mortgage upon tender of the funds recited in the mortgage payoff
6 statement, or timely amendment thereto and termination of the
7 mortgagee's obligation to make additional advances secured by
8 the residential mortgage concerned and thereafter shall not
9 attempt to foreclose such mortgage or take any other action
10 inconsistent with the position that the mortgage is paid in
11 full. In the case of an attempted enforcement of such a paid
12 mortgage, the mortgagee shall be liable to the persons or
13 entities aggrieved for actual damages, including reasonable
14 attorney fees and costs.
15 (g) Continuing liability of mortgagor.--Subsections (d) and
16 (f) notwithstanding, in the event of an error in the mortgage
17 payoff statement, irrespective of the cause of that error, and
18 tender of less than the full balance due, the mortgagee shall
19 retain any remedies, legal or equitable, to maintain an in
20 personam action against the maker of the mortgage note for any
21 sums still owing under the note other than to foreclose on the
22 mortgage.
23 Section 3. Sections 3(b), 5, 6(a), (c) and (d) and 7(b) of
24 the act are amended to read:
25 Section 3. Satisfactions, methods and indexing.
26 * * *
27 (b) Indexing.--[The recording officer shall properly index
28 all satisfaction pieces and settlement officer satisfactions
29 against the name of the mortgagee or last assignee as each is
30 indicated in the satisfaction piece or settlement officer
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1 satisfaction, and the recording officer shall indicate the
2 recording of each satisfaction piece and settlement officer
3 satisfaction in the mortgage record.] The recording officer
4 shall properly index all satisfaction pieces and settlement
5 officer satisfactions against the name of the mortgagor and the
6 name of the original mortgagee as each is indicated in the
7 satisfaction piece or settlement officer satisfaction and the
8 recording officer shall indicate the recording of each
9 satisfaction piece and settlement officer satisfaction in the
10 mortgage record.
11 * * *
12 Section 5. Form of satisfaction piece.
13 Mortgagees, whether individuals or legal entities other than
14 individuals, shall satisfy mortgages by a satisfaction piece in
15 substantially the following form:
16 SATISFACTION PIECE
17 Made this day of ,
18 Name of Mortgagor:
19 Name of Mortgagee:
20 [Name of Last Assignee:]
21 Date of Mortgage:
22 Original Mortgage Debt:
23 Mortgage Recorded on ,
24 in the Office of the Recorder of Deeds of
25 County, Pennsylvania,
26 in Book , Page /instrument
27 number .
28 Brief Description or Statement of Location of
29 Mortgaged Premises:
30 The undersigned hereby certifies that the debt secured by
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1 the above-mentioned mortgage has been fully paid or
2 otherwise discharged and that upon the recording hereof
3 said mortgage shall be and is hereby fully and forever
4 satisfied and discharged.
5 The undersigned hereby authorizes and empowers the
6 recorder of said county to enter this satisfaction piece
7 and to cause said mortgage to be satisfied of record.
8 Witness the due execution hereof with the intent to be
9 legally bound. (signature(s) of individual mortgagee(s)
10 or representative(s) of legal entity)
11 (acknowledgment)
12 Section 6. Notice to satisfy; damages for failure to satisfy.
13 (a) Notice to satisfy.--[After the entire mortgage
14 obligation as well as all required satisfaction and recording
15 costs have been paid to the mortgagee, the mortgagor may send a
16 notice to the mortgagee to present for recording a satisfaction
17 piece to avoid damages.] After the entire mortgage obligation as
18 well as all required satisfaction and recording costs have been
19 paid to the mortgagee and, in the case of an open-end mortgage,
20 the mortgagee's obligation to make further advances has
21 terminated, the mortgagor or settlement officer may send a
22 notice to the mortgagee to present for recording a satisfaction
23 piece to avoid damages.
24 * * *
25 (c) Form.--The notice to satisfy shall be in substantially
26 the following form:
27 NOTICE TO RECORD MORTGAGE SATISFACTION
28 PIECE TO AVOID PENALTY
29 Date of notice:
30 To the mortgagee named below:
20070H2097B2964 - 7 -
1 The party issuing this notice believes that the mortgagee
2 of the mortgage described below has received full
3 satisfaction and payment of all amounts secured by the
4 mortgage, including any applicable satisfaction fee, and
5 that, where applicable, the mortgagee has been instructed
6 in writing, effective as of the date and time of receipt
7 of the mortgage payoff figure, to close and decline any
8 further advances on any open line of credit which was
9 secured by the affected mortgage. The party issuing this
10 notice hereby requests that the mortgagee issue and
11 present for recording a satisfaction piece concerning the
12 mortgage or provide a satisfactory reason why the
13 mortgage should not be satisfied to the party issuing
14 this notice. If you do not comply with this notice, you
15 may be liable for penalties and costs in accordance with
16 the act of December 9, 2002 (P.L.1530, No.197), known as
17 the Mortgage Satisfaction Act, or the party issuing this
18 notice may be able to satisfy the mortgage without your
19 consent.
20 Name of mortgagor:
21 Name of mortgagee:
22 [Name of last assignee:]
23 Date of mortgage:
24 Amount of mortgage: $
25 Recorded in County, Pennsylvania, in Book ,
26 Page /instrument number.
27 Brief description of premises covered by mortgage:
28 Mortgagee loan number (if known):
29 Name of party presenting this notice:
30 Address of party presenting this notice:
20070H2097B2964 - 8 -
1 Telephone number of party presenting this notice:
2 (d) [Penalty for failure to satisfy.--
3 (1) If, within 60 days of the mortgagee's receipt of:
4 (i) payment of the entire mortgage obligation and
5 all required satisfaction and recording costs; and
6 (ii) the first written request by the mortgagor for
7 the satisfaction piece delivered and in substantially the
8 form described in this section,
9 the mortgagee fails to present for recording to the office
10 where the mortgage was recorded a satisfaction piece as
11 described in section 5 or the mortgage is not otherwise
12 satisfied, the mortgagee shall forfeit and pay to the
13 mortgagor a penalty in a sum not exceeding the original loan
14 amount.
15 (2) In any successful action to recover penalties
16 pursuant to this section, the mortgagee shall reimburse the
17 mortgagor for costs of the action, including the mortgagor's
18 reasonable attorney fees.
19 (3) Any action to enforce the provisions of this
20 section, including any action to recover amounts due under
21 this section, shall be brought and maintained in the
22 individual names and shall be prosecuted by persons entitled
23 to recover under the terms hereof and not in a representative
24 capacity.
25 (4) An action under this section shall be the exclusive
26 remedy for damages for failure of a mortgagee to issue and
27 present for recording a satisfaction piece.
28 (5) The delivery of a second or subsequent written
29 request by the mortgagor for a satisfaction piece shall not
30 give rise to an additional cause of action under this
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1 section.]
2 Liability for failure to satisfy.--
3 (1) If, within 60 days of the mortgagee's receipt of:
4 (i) payment of the entire mortgage obligation and
5 all required satisfaction and recording costs; and
6 (ii) the first written request by a mortgagor or
7 settlement officer for the satisfaction piece delivered
8 and in substantially the form described in this section,
9 the mortgagee fails to present for recording to the
10 office where the mortgage was recorded a satisfaction
11 piece as described in section 5 or the mortgage is not
12 otherwise satisfied of record, the mortgagee shall be
13 liable to the mortgagor or settlement officer who
14 presented the written request for a liquidated damages
15 penalty of $25 for each day that the satisfaction piece
16 has not been presented, up to a maximum of $500 for all
17 claims under this subsection for failure to satisfy a
18 particular mortgage.
19 (2) In any successful action by a mortgagor or
20 settlement officer to recover penalties pursuant to this
21 section, the mortgagee shall reimburse the mortgagor or
22 settlement officer for costs of the action, including the
23 mortgagor's or settlement officer's reasonable attorney fees.
24 (3) Any action to enforce the provisions of this
25 section, including any action to recover amounts due under
26 this section, shall be brought and maintained in the
27 individual names and shall be prosecuted by persons entitled
28 to recover under the terms hereof and not in a representative
29 capacity.
30 (4) An action under this section shall be the exclusive
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1 remedy for damages for failure of a mortgagee to issue and
2 present for recording a satisfaction piece.
3 (5) The delivery of a second or subsequent written
4 request for a satisfaction piece shall not give rise to an
5 additional cause of action under this section.
6 Section 7. Residential mortgages; settlement officer
7 satisfaction.
8 * * *
9 (b) Recording and form.--
10 (1) If, within 60 days of the mortgagee's receipt of the
11 notice of intent to record satisfaction issued by a
12 settlement officer in accordance with this section, a
13 satisfaction piece has not been recorded in the office where
14 the mortgage was recorded and the mortgagee has not delivered
15 to the settlement officer a response which details reasons
16 why the mortgage should not be satisfied, a settlement
17 officer may present for recording a settlement officer
18 satisfaction. The settlement officer shall also send the
19 mortgagee a copy of the settlement officer satisfaction by
20 the same method and procedure described in section 6.
21 (2) The settlement officer satisfaction shall be in
22 substantially the following form and shall be executed by the
23 settlement officer and acknowledged as provided by law:
24 SETTLEMENT OFFICER SATISFACTION
25 Name of mortgagor Date of mortgage
26 Name of mortgagee Principal amount
27 [Name of last assignee] Recorded on premises
28 In ,
29 County, Pennsylvania, in Book ,
30 Page /as instrument .
20070H2097B2964 - 11 -
1 Brief description or Statement of Location of
2 Mortgaged Premises.
3 COMMONWEALTH OF PENNSYLVANIA:
4 COUNTY OF : ss:
5 Before me, the subscriber, a notary public in
6 and for the Commonwealth of Pennsylvania,
7 personally appeared , who, being duly sworn
8 according to law, deposes and says:
9 (1) The settlement officer is licensed by the Insurance
10 Department as a Title Insurance Agent with license no.
11 or is an employee of , a Title Insurance
12 Company authorized to do business in Pennsylvania or is an
13 attorney licensed to practice law in this Commonwealth.
14 (2) The settlement officer business address is:
15 (3) The settlement officer has conducted or supervised a
16 settlement in which the above-captioned mortgage was paid in
17 full in accordance with the payoff statement provided by the
18 mortgagee.
19 (4) The above settlement was held on at in which
20 the mortgagor sold the property, refinanced the
21 mortgage, other .
22 (5) The settlement officer has ascertained, if the
23 mortgage secures an open-end line of credit account, that the
24 mortgagee has been instructed in writing, effective no later
25 than the date and time of the receipt of the mortgage payoff
26 figure, to close and decline any further advances on the home
27 equity or other open-end line of credit which was secured by
28 the affected mortgage.
29 (6) The settlement officer has ascertained that the
30 mortgagee has received payment of the loan secured by the
20070H2097B2964 - 12 -
1 mortgage in accordance with the payoff statement, as
2 evidenced by a bank check, certified check, escrow account
3 check from the settlement officer or an attorney trust
4 account check that has been negotiated by the mortgagee, or
5 any documentary evidence of the receipt of payment by the
6 mortgagee.
7 (7) A satisfaction piece has not been recorded
8 concerning the mortgage, nor has the settlement officer
9 received a satisfaction piece.
10 (8) The settlement officer has delivered to the
11 mortgagee notice of intent to present for recording a
12 settlement officer satisfaction using the format and
13 procedures described in [the act of December 9, 2002
14 (P.L.1530, No.197),known as the Mortgage Satisfaction Act]
15 this act. Attached hereto is a copy of the written request
16 notice of intent and a copy of the return receipt which
17 indicates the written request and notice of intent were
18 received by the mortgagee.
19 (9) The settlement officer has no actual knowledge of
20 any objection by the mortgagee to the recording of a
21 settlement officer satisfaction, nor has an objection been
22 recorded in accordance with the act.
23 (10) Attached hereto is a copy of the canceled check,
24 wire confirmation or other evidence of payment which paid the
25 mortgage in full in accordance with the payoff statement.
26 (signature of settlement officer)
27 In witness whereof, I have hereunto set my hand and
28 official seal, this day of , .
29 Notary Public.
30 * * *
20070H2097B2964 - 13 -
1 Section 4. This act shall apply only to payoff statements
2 requested after the effective date of this act.
3 Section 5. This act shall take effect in 60 days.
K28L68RZ/20070H2097B2964 - 14 -