Public Act 93-0428
HB2550 Enrolled LRB093 09802 LCB 10047 b
AN ACT concerning mortgages.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Mortgage Act is amended by changing
Section 2 as follows:
(765 ILCS 905/2) (from Ch. 95, par. 52)
Sec. 2. Every mortgagee of real property, his assignee
of record, or other legal representative, having received
full satisfaction and payment of all such sum or sums of
money as are really due to him from the mortgagor, and every
trustee, or his successor in trust, in a deed of trust in the
nature of a mortgage, the notes, bonds or other indebtedness
secured thereby having been fully paid before September 7,
1973, shall, at the request of the mortgagor, or grantor in a
deed of trust in the nature of a mortgage, his heirs, legal
representatives or assigns, in case such mortgage or trust
deed has been recorded or registered, make, execute and
deliver to the mortgagor or grantor in a deed of trust in the
nature of a mortgage, his heirs, legal representatives or
assigns, an instrument in writing executed in conformity with
the provisions of this section releasing such mortgage or
deed of trust in the nature of a mortgage, which release
shall be entitled to be recorded or registered and the
recorder or registrar upon receipt of such a release and the
payment of the recording fee therefor shall record or
register the same.
Mortgages of real property and deeds of trust in the
nature of a mortgage shall be released of record only in the
manner provided herein or as provided in the Mortgage
Certificate of Release Act; however, nothing contained in
this Act shall in any manner affect the validity of any
release of a mortgage or deed of trust made prior to January
1, 1952 on the margin of the record.
Except in the case of a mortgage that is required to be
released under the Mortgage Certificate of Release Act, every
mortgagee of real property, his assignee of record, or other
legal representative, having received full satisfaction and
payment of all such sum or sums of money as are really due to
him from the mortgagor, and every trustee, or his successor
in trust, in a deed of trust in the nature of a mortgage, the
notes, bonds or other indebtedness secured thereby having
been fully paid after September 7, 1973, shall make, execute
and deliver to the mortgagor or grantor in a deed of trust in
the nature of a mortgage, his heirs, legal representatives or
assigns, an instrument in writing releasing such mortgage or
deed of trust in the nature of a mortgage or shall deliver
that release to the recorder or registrar for recording or
registering. If the release is delivered to the mortgagor or
grantor, it must have imprinted on its face in bold letters
at least 1/4 inch in height the following: "FOR THE
PROTECTION OF THE OWNER, THIS RELEASE SHALL BE FILED WITH THE
RECORDER OR THE REGISTRAR OF TITLES IN WHOSE OFFICE THE
MORTGAGE OR DEED OF TRUST WAS FILED". The recorder, or
registrar, upon receipt of such a release and the payment of
the recording or registration fee, shall record or register
the release. A certificate of release issued and recorded by
a title insurance company or its duly appointed agent
pursuant to the Mortgage Certificate of Release Act shall
satisfy the requirements of this Section 2.
(Source: P.A. 92-765, eff. 8-6-02.)
Section 10. The Mortgage Certificate of Release Act is
amended by changing Sections 5, 10, 15, 20, 35, 40, and 50
and by adding Sections 10.1 and 70 as follows:
(765 ILCS 935/5)
(Section scheduled to be repealed on January 1, 2004)
Sec. 5. Definitions. As used in this Act:
"Hold-harmless agreement" means a letter whereby a title
insurance company, as defined in the Title Insurance Act,
agrees to indemnify another title insurance company preparing
to insure a present transaction that the indemnifying title
insurance company has previously insured over without taking
an exception to its title insurance policy for matters
remaining of record, such as a previously paid but unreleased
mortgage. A model form of a hold-harmless agreement is set
forth in Section 70 of this Act.
"Mortgage" means a mortgage or mortgage lien on an
interest in one-to-four family residential real property in
this State given to secure a loan in the original principal
amount of less than $500,000. Trust deeds are not included.
"Mortgagee" means either: (i) the grantee of a mortgage;
or (ii) if a mortgage has been assigned of record, the last
person to whom the mortgage has been assigned of record.
"Mortgage servicer" means the last person to whom a
mortgagor or the mortgagor's successor in interest has been
instructed by a mortgagee to send payments on a loan secured
by a mortgage. A person transmitting a payoff statement is
the mortgage servicer for the mortgage described in the
payoff statement.
"Mortgagor" means the grantor of a mortgage.
"Notice of intention to file certificate of release"
means a statement from a title insurance company or title
insurance agent to the person to whom payment of the loan
secured by the mortgage was made in accordance with the
payoff statement of the intention to record a certificate of
release.
"Payoff statement" means a statement for the amount of
the (i) unpaid balance of a loan secured by a mortgage,
including principal, interest, and any other charges due
under or secured by the mortgage; and (ii) interest on a per
day basis for the unpaid balance.
"Record" means to deliver the certificate of release for
recording with the county recorder.
"Title insurance agent" has the same meaning ascribed to
it as in Section 3 of the Title Insurance Act.
"Title insurance company" has the same meaning ascribed
to it as in Section 3 of the Title Insurance Act.
(Source: P.A. 92-765, eff. 8-6-02.)
(765 ILCS 935/10)
(Section scheduled to be repealed on January 1, 2004)
Sec. 10. Mortgage presently being paid off. Receipt of
payment pursuant to the lender's written payoff statement
shall constitute authority to record a certificate of
release. Content and delivery of notice of intention to file
certificate of release. (a) The Notice of intention to file a
certificate of release shall state that if the title
insurance company or title insurance agent does not receive
from the mortgagee or mortgage servicer or its successor in
interest either a release or a written objection to the
issuance of a certificate of release pursuant to subsection
(c) of this Section, A certificate of release shall may be
delivered for recording to the recorder of each county in
which the mortgage is recorded, together with the other
documents from the new transaction, including a deed or new
mortgage, or both by the title insurance company or its duly
appointed agent. A notice of intention to file a certificate
of release should be in a form and include content that
substantially complies with Section 65 of this Act. The
notice of intention shall include a copy of the closing
statement or HUD-1 form and the payoff check or a copy of it,
or a copy of the wire transfer order.
(b) The notice of intention to file a certificate of
release shall be sent by certified mail, return receipt
requested, with postage prepaid, or by another service
providing receipted delivery, no sooner than the day of
closing and no later than 30 days after receipt of payment.
The notice shall be delivered to the location identified in
the payoff statement or as otherwise directed in writing by
the mortgagee or mortgage servicer or its successor in
interest. The notice may be sent with the payment, and need
not be sent separately.
(c) Within 90 days after receipt of the notice of
intention to file a certificate of release, the mortgagee or
mortgage servicer or its successor in interest may issue a
release or may object in writing to the issuance of a
certificate of release, and by doing so shall prevent the
title insurance company or title insurance agent from
executing and recording a certificate of release pursuant to
this Act. Any written objection submitted by the mortgagee or
mortgage servicer or its successor in interest shall state
the reason for which the release or certificate of release
should not be issued. The written objection shall be sent to
the title insurance company or title insurance agent by
certified mail, return receipt requested, with postage
prepaid, or by another service providing receipted delivery.
A title insurance company or title insurance agent shall not
cause a certificate of release to be recorded pursuant to
this Section if the title insurance company or title
insurance agent receives a written objection from the
mortgagee or mortgage servicer or its successor in interest.
(Source: P.A. 92-765, eff. 8-6-02.)
(765 ILCS 935/10.1 new)
Sec. 10.1. Previously paid mortgages. A title insurance
company or its duly appointed title insurance agent may issue
a mortgage certificate of release pursuant to this Act for a
mortgage that appears in the chain of title prior to the
mortgage presently being paid. The title insurance company
must have proof of payment from its own prior files that it
paid the mortgage or mortgages pursuant to a payoff
statement. Where another title insurance company has paid off
an unreleased mortgage pursuant to a payoff statement, the
title insurance company or its duly appointed title insurance
agent in the current transaction may rely upon the
hold-harmless letter of that prior title insurance company to
issue a mortgage certificate of release. This grant of
authority is subject to the condition that the issuer of the
mortgage certificate of release does not have notice that the
lender opposes its release. A single mortgage certificate of
release may include more than one mortgage, including both
presently and previously paid mortgages.
(765 ILCS 935/15)
(Section scheduled to be repealed on January 1, 2004)
Sec. 15. Certificate of release. An officer or duly
appointed agent of a title insurance company may, on behalf
of a mortgagor or a person who has acquired from a mortgagor
title to all or part of the property described in the
mortgage, execute a certificate of release that complies with
the requirements of this Act and record the certificate of
release with the recorder of each county in which the
mortgage is recorded, provided that payment of the loan
secured by the mortgage was made in accordance with a written
payoff statement furnished by the mortgagee or the mortgage
servicer. The title insurance company or its duly appointed
agent shall not be required to search the public record for a
possible recorded satisfaction or release. , that a
satisfaction or release of the mortgage has not previously
been recorded, and that a notice of intention to file a
certificate of release was sent in accordance with Section
10.
(Source: P.A. 92-765, eff. 8-6-02.)
(765 ILCS 935/20)
(Section scheduled to be repealed on January 1, 2004)
Sec. 20. Contents of certificate of release. A
certificate of release executed under this Act must contain
substantially all of the following for each mortgage being
released:
(a) The name of the mortgagor, the name of the original
mortgagee, and, if applicable, the mortgage servicer at the
date of the mortgage, the date of recording, and the volume
and page or document number or other official recording
designation in the real property records where the mortgage
is recorded., together with similar information for the last
recorded assignment of the mortgage.
(b) A statement that the mortgage was paid in accordance
with the written payoff statement received from the mortgagee
or mortgage servicer and there is no objection from the
mortgagee or mortgage servicer or its successor in interest.
With respect to previously paid mortgages, the hold-harmless
letter from a title insurance company, as provided in Section
10.1 of this Act, shall satisfy this requirement.
(c) A statement that the person executing the
certificate of release is an officer or a duly appointed
agent of a title insurance company authorized and licensed to
transact the business of insuring titles to interests in real
property in this State pursuant to subsections (2) and (3) of
Section 3 of the Title Insurance Act.
(d) A statement that the certificate of release is made
on behalf of the mortgagor or a person who acquired title
from the mortgagor to all or a part of the property described
in the mortgage.
(e) A statement that the mortgagee or mortgage servicer
provided a written payoff statement. The hold-harmless
letter from a title insurance company, as provided in Section
10.1 of this Act, shall satisfy this requirement with respect
to previously paid mortgages.
(Source: P.A. 92-765, eff. 8-6-02.)
(765 ILCS 935/35)
(Section scheduled to be repealed on January 1, 2004)
Sec. 35. Effect of recording certificate of release. For
purposes of releasing the lien of the mortgage, a certificate
of release containing the information and statements provided
for in Section 20 and executed as provided in Section 25 is
prima facie evidence of the facts contained therein, and upon
being recorded with the recorder, shall constitute a release
of the lien of the mortgage described in the certificate of
release. The title insurance company or title insurance agent
recording the certificate of release may use the recording
fee it may have collected for the recording of a release or
satisfaction of the mortgage to effect the recording of the
certificate of release.
(Source: P.A. 92-765, eff. 8-6-02.)
(765 ILCS 935/40)
(Section scheduled to be repealed on January 1, 2004)
Sec. 40. Wrongful or erroneous certificate of release.
Recording of a wrongful or erroneous certificate of release
by a title insurance company or its title insurance agent
shall not relieve the mortgagor or the mortgagor's successors
or assignees from any personal liability on the loan or other
obligations secured by the mortgage. In addition to any other
remedy provided by law, a title insurance company executing
or recording a certificate of release under this Act that has
actual knowledge that the information and statements
contained therein are false is liable to the mortgagee for
actual damages sustained due to the recording of the
certificate of release. The prevailing party in any action
or proceeding seeking actual damages due to the recording of
a certificate of release shall be entitled to the recovery of
reasonable attorneys fees and costs incurred in that action
or proceeding.
(Source: P.A. 92-765, eff. 8-6-02.)
(765 ILCS 935/50)
(Section scheduled to be repealed on January 1, 2004)
Sec. 50. Form of certificate of release. A certificate
of release, in substantially the following form, allowing for
alterations to permit the inclusion of multiple mortgages,
both presently and previously paid, complies with this Act.
CERTIFICATE OF RELEASE
Date:....Title Order No.:.....
1. Name of mortgagor(s):.....
2. Name of original mortgagee:.....
3. Name of mortgage servicer (if any):.....
4. Name of last assignee of mortgage or record (if any):.....
4. 5. Mortgage recording: Vol.:.....Page:.....or Document
No.:.....
6. Last assignment recording (if any):
Vol.:.....Page:.....or Document No.......
5. 7. The above referenced mortgage has been paid in
accordance with the payoff statement received from....., and
there is no objection from the mortgagee or mortgage servicer
or its successor in interest to the recording of this
certificate of release.
6. 8. The person executing this certificate of release is an
officer or duly appointed agent of a title insurance company
authorized and licensed to transact the business of insuring
titles to interests in real property in this State pursuant
to Section 30 of this Act.
7. 9. This certificate of release is made on behalf of the
mortgagor or a person who acquired title from the mortgagor
to all or part of the property described in the mortgage.
8. 10. The mortgagee or mortgage servicer provided a payoff
statement.
9. 11. The property described in the mortgage is as follows:
Permanent Index Number:.....
Common Address:.....
(Name of title insurance company)
By:.....
(Name of officer and title or name of agent and name of
officer / representative thereof)
Address:.....
Telephone No.:.....
State of Illinois)
)
County of )
This instrument was acknowledged before me on .....(date) by
.....(name of person) as .....(officer for / agent of)
.....(title insurance company).
.....
Notary Public
My commission expires on.....
(Source: P.A. 92-765, eff. 8-6-02.)
(765 ILCS 935/70 new)
Sec. 70. Form of hold-harmless agreement. A
hold-harmless agreement in substantially the following form,
allowing for alterations to reflect the facts of the
transaction and identity of the title insurance companies,
complies with this Act.
Hold-harmless Agreement
TO: .................... (Presently insuring title insurance
company)
Re: Policy No.: ...... (Previously insuring title insurance
company)
Policy amount: $..............
Policy/Commitment No.: ............... (Presently
insuring title insurance company)
You show as exception number(s) .................. in your
above referenced commitment for title insurance dated
.........., the following exception(s):
Mortgage dated ........., recorded as Document No. .......
made by ................................. (borrow) to
................................. (lender) to secure an
indebtedness in the amount of $.........
For and in consideration of your deleting said exception(s),
we agree to indemnify you against loss that you may sustain
as a result of said deletion. In no event may said indemnity
exceed the face amount of our policy as noted above.
In the event any claim is made against you as a result of
your deletion, you agree to notify us within 30 days of the
date the claim is made.
Any action you take with respect to the claim will not
obligate us under this letter unless the aforesaid notice has
been furnished us and we have adequate time to consider our
approval or disapproval of the action.
..........................................
Title Insurance Company (Previously insuring)
(765 ILCS 935/65 rep.)
(765 ILCS 935/90 rep.)
Section 20. The Mortgage Certificate of Release Act is
amended by repealing Sections 65 and 90.
Section 99. Effective date. This Act takes effect
December 31, 2003.