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Regular Session, 2011 ENROLLED
SENATE BILL NO. 225
BY SENATOR MOUNT AND REPRESENTATIVES BALDONE, BARRAS, TIM
BURNS, CARMODY, FANNIN, GUINN, HARRISON, HOWARD,
LABRUZZO, LANDRY, LIGI, GARY SMITH, ST. GERMAIN,
TUCKER, WHITE AND WILLMOTT
Prefiled pursuant to Article III, Section 2(A)(4)(b)(i) of the Constitution of Louisiana.
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 residential13
mortgages, where a mortgage has been granted by a consumer on a one-to-four14
family residential immovable property, including a mortgage to finance the15
initial construction of the one-to-four family residential immovable property.16
The provisions of this Section shall apply only to mortgages recorded on and17
after January 1, 2012.18
B. (1) Upon extinction of the mortgage in accordance with Civil Code19
Article 3319, the mortgagor, his successor in ownership or settlement agent may20 SB NO. 225 ENROLLED
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submit a written request, signed by the mortgagor to the mortgagee, to issue a1
written act of release directing the appropriate recorder of mortgages to cancel2
the inscription of the mortgage from the mortgage records. The written request3
that the mortgage be cancelled shall extinguish any obligation on the part of the4
mortgagee and all additional lenders, on whose behalf the mortgagee may be5
representing or acting for the benefit of, to make any further loan or advance6
that would be secured by the mortgage.7
(2) If the mortgagee has assigned, transferred, or delegated the servicing8
rights to a third party, then the duties and liabilities of the mortgagee pursuant9
to this Section shall apply solely to the third party.10
(3) The written request shall be delivered to the mortgagee at the address11
designated by the mortgagee to be used for such written requests. If the request12
is accompanied by a payoff check from a settlement agent, the written request13
shall be delivered to the same address where the payoff check is delivered.14
(4) The mortgagee shall issue within forty-five days after receipt from15
the mortgagor or settlement agent of a written request for cancellation of the16
mortgage accompanied by the fees required by Subsection (B)(5) of this Section,17
the act of release along with a request for cancellation that complies with Civil18
Code Article 3366.19
(5) The mortgagee shall submit the act of release of the mortgage20
directly to the settlement agent if a written request was received by the21
mortgagee from a settlement agent. The written request to issue an act of22
release of the mortgage shall be accompanied by sufficient payment to the23
mortgagee to pay the mortgagee a fee for this service. The mortgagee may24
charge a fee to the mortgagor or his agent for all services and costs to prepare25
and execute the act of release and request for cancellation that complies with26
Civil Code Article 3366, in an amount not to exceed forty dollars, plus postage.27
Any fees charged by the mortgagee pursuant to this Subsection shall be clearly28
itemized to the requesting mortgagor or settlement agent in the payoff letter or29
statement or other communication.30 SB NO. 225 ENROLLED
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(6) If the mortgagee receives a signed written request, in accordance with1
Subsection (B)(1), directly from the mortgagor or the successor in ownership,2
and there is no settlement agent involved in forwarding the request, and the3
required fees in an amount not to exceed one hundred dollars are received by4
the mortgagee for all services and costs to prepare, execute, and deliver the act5
of release and request for cancellation that complies with Civil Code Article6
3366, along with the appropriate cancellation fees for the recorder of mortgages,7
then the mortgagee shall, within forty-five days of receiving such request and8
fees, prepare and submit to the appropriate recorder of mortgages an act of9
release along with the request for cancellation that complies with Civil Code10
Article 3366.11
(7) A mortgagor may obtain a complimentary copy of the act of release12
from the mortgagee when there is no settlement agent involved.13
C. Upon receipt of the act of release and request for cancellation, the14
settlement agent shall file them with the appropriate recorder of mortgages15
within forty-five days. 16
(1) The mortgagee shall not be liable for damages, fees, or costs caused17
by the failure of the settlement agent to timely file the act of release and request18
for cancellation, if the act of release and request for cancellation are in19
compliance with the law and sufficient to cancel the inscription of the mortgage20
from the mortgage records. 21
(2) If the settlement agent fails to timely file the release, he shall be liable22
for the statutory and actual damages, costs, and fees provided for in Subsection23
E of this Section.24
D. In the event either the mortgagee or settlement agent has failed to25
comply with the requirements of this Section, the mortgagee and settlement26
agent shall be provided with written notice of noncompliance identifying the27
mortgage at issue and the explanation of how they failed to comply with the28
requirements of this Section, and then the mortgagee and settlement agent shall29
be given an opportunity to prepare and submit an act of release of mortgage30 SB NO. 225 ENROLLED
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and request for cancellation to the appropriate recorder of mortgages within1
fifteen days of receiving the notice before any rights accrue pursuant to2
Subsection E of this Section.3
E. If the mortgagee fails to perform the duty required by this Section, the4
mortgagor or his successor in ownership may, by summary proceedings5
instituted against the mortgagee, in the parish where the mortgaged property6
is located, obtain a judgment ordering the mortgage inscription to be cancelled7
from the records and for the costs, reasonable attorney fees, statutory damages8
in the amount of five hundred dollars, and actual damages he has suffered from9
the failure to comply with this Section. Any judgment for damages may be10
awarded individually, but not in a representative capacity. The rights to11
recover damages provided by this Section are personal to the mortgagor or his12
successor in ownership of the property and may not be assigned.13
F. A mortgagee complying with the provisions of this Section shall not14
be subject to the requirements of R.S. 9:5167.2. 15
* * *16
§5557. Obligation to grant release of mortgage17
A. The provisions of this Section shall apply only to mortgages recorded18
prior to January 1, 2012.19
B. A. Upon extinction of the mortgage, the mortgagor or his successor may20
request the mortgagee to provide a written act of release directing the recorder to21
erase the mortgage from his records. The mortgagee shall deliver the act of release22
to the mortgagor within sixty days of receiving the request. If the mortgagee fails23
to deliver the act timely and in a form susceptible of recordation, the mortgagor may,24
by summary proceedings instituted against the mortgagee in the parish where the25
mortgaged property is located, obtain a judgment ordering the mortgage to be erased26
from the records and for the costs, reasonable attorneys fees, and any damages he has27
suffered from the mortgagee's default.28
C. B. This Section does not apply to a mortgage insofar as it secures29
payment of a note or other instrument paraphed for identification with the act of30 SB NO. 225 ENROLLED
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mortgage by the notary before whom it is executed.1
Section 2. This Act shall become effective on January 1, 2012.2
PRESIDENT OF THE SENATE
SPEAKER OF THE HOUSE OF REPRESENTATIVES
GOVERNOR OF THE STATE OF LOUISIANA
APPROVED: