January 9, 2014
by Amy M. Kieffer and William Foshag
Gray & Associates, L.L.P. – USFN Member (Wisconsin)
On December 12, 2013, Governor Walker signed Wisconsin Senate Bill 290 into law. This new law is codified at Wis. Stat. § 708.15 and provides a new mortgage satisfaction option for residential real property, as well as sets out the rights of a settlement agent, a person who is obligated under a security instrument, or their authorized agent to request a payoff statement from the secured creditor.
The new law allows a title insurance company acting directly or through an authorized agent to serve as a satisfaction agent. Upon, or at any time after, full payment or performance of the secured obligation or payment, a satisfaction agent with authority from the landowner may give the secured creditor notice that the agent may submit for recording an affidavit of satisfaction of the security instrument against residential real property. The law specifies the information that must be included in the notice, such as that the satisfaction agent has reasonable grounds to believe that the property is residential real property and that the secured creditor received full payment.
The satisfaction agent may, after providing notice, submit the affidavit of satisfaction to the register of deeds for recording if the secured creditor authorizes the agent to do so or if the secured creditor does not, within 30 days of the notice, record a satisfaction.
The satisfaction agent may not submit an affidavit of satisfaction for recording if the agent receives notice from the secured creditor that the security instrument has been assigned. In that case, the satisfaction agent must provide notice to the assignee. A satisfaction agent also may not submit an affidavit of satisfaction if the agent receives notice that the secured obligation has not been satisfied, unless the agent has reasonable grounds to believe that the person who paid the payoff amount reasonably and detrimentally relied upon an understated payoff amount.
The new law also addresses payoff statements. The person or settlement agent, or the authorized agent, may give notice to the secured creditor requesting a payoff statement for a specified date that is not more than 30 days from the date the notice is given. The secured creditor must issue the payoff statement within seven business days after the effective date of the notice. The law further specifies the information that must be included in the payoff statement. The secured creditor may not charge the person for the first payoff statement that person requests in any two-month period.
If the payoff statement is understated, the secured creditor may send notice of the corrected payoff amount, but the secured creditor is prohibited from denying the accuracy of the payoff amount as against any person who reasonably and detrimentally relies on the understated amount. If the secured creditor receives payment as provided for in the payoff statement, the creditor must accept the payment and record a satisfaction of mortgage within 30 days. The secured creditor may then seek recourse against the obligated person for any amount that was incorrectly not included in the payoff statement.
The new law also contains penalties against a satisfaction agent who records an affidavit of satisfaction erroneously or with knowledge that the statements in the affidavit are false, and contains penalties against a secured creditor for failing to timely send a payoff statement.
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