10 May Iowa Legislative Update
The Iowa legislature recently amended its laws governing mortgage release certificates, effective May 1, 2013.
IOWA SENATE FILE 445
An “applicant” means a person authorized to regularly lend money to be secured by a mortgage on real property in Iowa, a licensed real estate broker, a licensed attorney, a participating abstractor, or a licensed closing agent.
“Closing agent” means a closing agent subject to the licensing requirements under the laws governing mortgage bankers, mortgage brokers, and closing agents.
“Division” means the Title Guaranty Division in the Iowa Finance Authority, the Director of the Division, or a designee of the Director.
The Division may execute and record a certificate of release on behalf of the Division in the real property records of each county in which a mortgage is recorded if all of the following are satisfied:
- The applicant submits all of the following in writing to the Division:
- A payoff statement or other documentation of the amount due, acceptable to the Division, as evidence that the mortgage does not continue to secure an unpaid obligation due the lender or an unfunded commitment by the borrower to the lender.
- Evidence that payment was made, including, if available, a statement as to the date the payment was received by the lender or mortgage servicer, with supporting documentation, as evidenced by one or more of the following:
- A bank check, certified check, escrow account check, real estate broker trust account check, attorney trust account check, or wire receipt, that was negotiated by the lender or mortgage servicer.
- Other documentary evidence, acceptable to the Division, or payment to the lender or mortgage servicer.
- The applicant confirms in writing to the Division all of the following:
- More than 30 days have elapsed since the date the payment was sent.
- An effective satisfaction or release of the mortgage has not been executed and recorded within 30 days after the date of payment.
The notice that the Division must provide to the mortgage servicer prior to the execution and filing of a certificate of release, may now be made by:
- Certified mail or any commercial delivery service, properly addressed with postage or cost of delivery provided for.
- Facsimile transmission or email to an address provided by the mortgage servicer, but only if the mortgage servicer agrees to receive notice in that manner.
- Publication in a newspaper of general circulation published in each county where the mortgage is recorded once each week for 3 consecutive weeks after receiving an affidavit by the applicant that service cannot be made on the mortgage servicer by either certified mail, commercial delivery service, fax, or email.
- Otherwise causing the notice to be received by the mortgage servicer within the time it would have been received if notice had been served by certified mail or commercial delivery service.
Notice is effective under any of the following circumstances:
- The day after the notice is deposited with a commercial delivery service for overnight delivery.
- 3 days after the notice is deposited with the United States Postal Service, or with a commercial delivery service for delivery other than by overnight delivery.
- The day the notice is transmitted, if served by fax or email.
- On the last day of publication, if published in a newspaper of general circulation.
- The day the notice is received, if served by a method other than certified mail, commercial delivery service, fax, email, or publishing in a newspaper of general circulation.
The certificate of release or partial release must be recorded in each county where the mortgage is recorded. (previously, if a mortgage is recorded in more than one county and a certificate of release or partial release is recorded in one of them, a certified copy of the certificate of release may be recorded in another county with the same effect as the original. In all cases, the certificate of release or partial release shall be entered and indexed in the manner that a satisfaction of mortgage is entered and indexed.)
The Division may charge a fee for services with regard to a mortgage release certificate.