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Regular Session, 2011
SENATE BILL NO. 225
BY SENATOR MOUNT
Prefiled pursuant to Article III, Section 2(A)(4)(b)(i) of the Constitution of Louisiana.
FINANCIAL INSTITUTIONS. Provides relative to release and cancellation of mortgages.
AN ACT1
To amend and reenact R.S. 9:5557 and to enact R.S. 9:5165, relative to mortgages; to2
provide relative to release and cancellation of mortgages under certain3
circumstances; to provide certain procedures, terms, conditions, requirements,4
application and effects; to provide certain time periods; to provide for recovery of5
certain damages, fees, and costs under certain circumstances; to provide for the6
obligation to grant releases of mortgages; to provide for limitations; and to provide7
for related matters.8
Be it enacted by the Legislature of Louisiana:9
Section 1. R.S. 9:5557 is hereby amended and reenacted and R.S. 9:5165 is hereby10
enacted to read as follows:11
§5165. Issuance of release of mortgage by current mortgagee 12
A. The provisions of this Section shall apply only to mortgages perfected13
on and after January 1, 2012.14
B. (1) Upon extinction of the mortgage in accordance with La. Civil Code15
Article 3319, the mortgagor, his successor or settlement agent may submit a16
written request, signed by the mortgagor to the current mortgagee, to provide17 SB NO. 225
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the appropriate recorder of mortgages with a written act of release directing the1
recorder to erase the mortgage from the records. This written request that the2
mortgage be cancelled shall extinguish any obligation on the part of the current3
mortgagee and all additional lenders, on whose behalf the mortgagee may be4
representing or acting for the benefit of, to make any further loan or advance5
that would be secured by the mortgage.6
(2) The term “current mortgagee” as used in this Section shall mean the7
current holder of the mortgage. If the current holder of the mortgage has8
assigned, sold, or transferred the servicing rights to a third party, then the third9
party shall be deemed the current mortgagee.10
(3) The written request shall be mailed to the current mortgagee at the11
address designated by the current mortgagee to be used for such written12
requests. If the request is accompanied by a payoff check from a settlement13
agent, the notice shall be delivered to the same address where the payoff check14
is sent.15
(4) The written request to issue an act of release of the mortgage must be16
accompanied by sufficient payment to the current mortgagee to pay the fees of17
the recorder of mortgages to cancel the mortgage and to pay the current18
mortgagee a reasonable fee for this service. The current mortgagee may charge19
a reasonable fee to the mortgagor or his agent for all services and costs to20
prepare, execute, mail, submit or record the act of release. Any fees charged by21
the current mortgagee under this Paragraph shall be clearly itemized to the22
requesting mortgagor or settlement agent in the pay off letter, statement, or23
other documentation.24
(5) Within forty-five days after receipt from the mortgagor of a written25
request for cancellation of the mortgage accompanied by the fees required by26
Paragraph (4), the current mortgagee shall submit to the recorder of mortgages27
the act of release along with a request for cancellation that complies with Civil28
Code Article 3366 and the requisite fees of the recorder. The mortgagor or his29 SB NO. 225
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agent shall be copied with this request and with cancellation information1
received from the recorder of mortgages.2
(6) If the mortgagee fails to deliver the act of release and request for3
cancellation to the settlement agent within forty-five days of receipt of funds4
from the settlement agent, he shall be liable for the statutory and actual5
damages, fees and costs as provided in Subsection (D).6
C. If the current mortgagee does not itemize the fees in the payoff7
statement requested by mortgagor or the settlement agent as required under8
Paragraph (B)(4), the mortgagor or the settlement agent may request that the9
act of release and request for cancellation be delivered to the settlement agent.10
Upon receipt of the act of release and request for cancellation, the settlement11
agent shall file same with the clerk of court within forty-five days. 12
(1) The mortgagee shall not be liable for damages, fees or costs caused13
by the failure of the settlement agent to timely file the act of release and request14
for cancellation, if the act of release and request for cancellation are in15
compliance with law and sufficient to cancel the inscription of the mortgage16
from the mortgage records. 17
(2) If the settlement agent fails to timely file the release, he shall be liable18
for the statutory and actual damages, costs and fees provided for in Subsection19
(D).20
D. If the current mortgagee fails to perform the duty described in this21
Section, the mortgagor or his successor in title may, by summary proceedings22
instituted against the current mortgagee, in the parish where the mortgaged23
property is located, obtain a judgment ordering the mortgage to be erased from24
the records and for the costs, reasonable attorneys fees, statutory damages in25
the amount of five hundred dollars, and actual damages he has suffered from26
the mortgagee's default.27
* * *28
§5557. Obligation to grant release of mortgage29 SB NO. 225
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A. The provisions of this Section shall apply only to mortgages recorded1
prior to January 1, 2012.2
B. A. Upon extinction of the mortgage, the mortgagor or his successor may3
request the mortgagee to provide a written act of release directing the recorder to4
erase the mortgage from his records. The mortgagee shall deliver the act of release5
to the mortgagor within sixty days of receiving the request. If the mortgagee fails6
to deliver the act timely and in a form susceptible of recordation, the mortgagor may,7
by summary proceedings instituted against the mortgagee in the parish where the8
mortgaged property is located, obtain a judgment ordering the mortgage to be erased9
from the records and for the costs, reasonable attorneys fees, and any damages he has10
suffered from the mortgagee's default.11
C. B. This Section does not apply to a mortgage insofar as it secures12
payment of a note or other instrument paraphed for identification with the act of13
mortgage by the notary before whom it is executed.14
Section 2. This Act shall become effective on January 1, 2012.15
The original instrument was prepared by Alan Miller. The following digest,
which does not constitute a part of the legislative instrument, was prepared
by Jerry G. Jones.
DIGEST
Mount (SB 225)
Present law relative to the obligation to grant a release of mortgage provides that upon
extinction of the mortgage, the mortgagor may request the mortgagee to provide a written
release directing the recorder of mortgages to erase the mortgage. If the mortgagee fails to
deliver the release within 60 days of receipt of the request, present law allows the mortgagee
to file a summary proceeding to obtain a judgment ordering cancellation of the mortgage and
awarding costs, attorney fees and any damages sustained by mortgagor.
Proposed law retains present law, but adds that its provisions shall apply only to mortgages
recorded prior to January 1, 2012.
Proposed law adds certain requirements relative to release and cancellation of mortgages
perfected on and after January 1, 2012.
Proposed law provides that upon extinction of the mortgage in accordance with La. Civil
Code article 3319, the mortgagor, his successor or settlement agent may submit a written
request, signed by the mortgagor to the current holder of the mortgage, to provide the
appropriate recorder of mortgages with a written act of release directing the recorder to erase
the mortgage from the records. This written request that the mortgage be cancelled shall
extinguish any obligation on the part of the current mortgagee and all additional lenders, on
whose behalf the mortgagee may be representing or acting for the benefit of, to make any SB NO. 225
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further loan or advance that would be secured by the mortgage.
Proposed law provides that if the request is accompanied by a payoff check from a
settlement agent, the notice shall be delivered to the same address where the payoff check
is sent. Further provides that such request must be accompanied by sufficient payment to the
current mortgagee to pay the fees of the recorder of mortgages to cancel the mortgage and
to pay the current mortgagee a reasonable fee for this service. The current mortgagee may
charge a reasonable fee to the mortgagor or his agent for all services and costs to prepare,
execute, mail, submit or record the act of release. Any fees charged by the current mortgagee
under shall be clearly itemized to the requesting mortgagor or settlement agent in the pay off
letter, statement, or other documentation.
Proposed law further provides that within 45 days after receipt from the mortgagor of a
written request for cancellation of the mortgage accompanied by the required, the current
mortgagee shall submit to the recorder of mortgages the act of release along with a request
for cancellation and the requisite fees of the recorder. The mortgagor or his agent shall be
copied with this request and with cancellation information received from the recorder of
mortgages.
Proposed law provides that if the mortgagee fails to deliver the act of release and request for
cancellation to the settlement agent within such 45 days of receipt of funds from the
settlement agent, he shall be liable for the statutory and actual damages, fees and costs as
provided in the proposed law.
Proposed law further provides if the current mortgagee does not itemize the fees in the
payoff statement requested by mortgagor or the settlement agent, the mortgagor or the
settlement agent may request that the act of release and request for cancellation be delivered
to the settlement agent. Upon receipt of the act of release and request for cancellation, the
settlement agent shall file same with the clerk of court within 45 days.
Proposed law provides that the mortgagee shall not be liable for damages, fees or costs
caused by the failure of the settlement agent to timely file the act of release and request for
cancellation, if the act of release and request for cancellation are in compliance with law and
sufficient to cancel the inscription of the mortgage from the mortgage records. Also provides
that if the settlement agent fails to timely file the release, he shall be liable for the statutory
and actual damages, costs and fees provided for in the proposed law.
Proposed law also provides if the current mortgagee fails to perform the duty set forth in the
proposed law, the mortgagor or his successor in title may, by summary proceedings
instituted against the current mortgagee, in the parish where the mortgaged property is
located, obtain a judgment ordering the mortgage to be erased from the records and for the
costs, reasonable attorneys fees, statutory damages in the amount of $500, and actual
damages he has suffered from the mortgagee's default.
Effective January 1, 2012.
(Amends R.S. 9:5557 and adds R.S. 9:5165)
Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Judiciary A to the
original bill.
1. Added R.S. 9:5165 setting forth revised proposed law provisions.
2. Removed proposed law provisions from R.S. 9:5557 and added that its
present provisions applied only to mortgages recorded prior to 1/1/12.