S.F. _____ H.F. _____ Section 1. Section 16.92, Code 2013, is amended by striking 1 the section and inserting in lieu thereof the following: 2 16.92 Real estate transfer —— mortgage release certificate. 3 1. Definitions. As used in this section, unless the context 4 otherwise requires: 5 a. “Applicant” means a person licensed to regularly lend 6 moneys to be secured by a mortgage on real property in this 7 state, a licensed real estate broker, a licensed attorney, a 8 participating abstractor, or a licensed closing agent. 9 b. “Closing agent” means a closing agent subject to the 10 licensing requirements of chapter 535B. 11 c. “Division” means the title guaranty division in the Iowa 12 finance authority, the director of the division, or a designee 13 of the director. 14 d. “Division board” means the board of directors of the 15 title guaranty division of the Iowa finance authority. 16 e. “Mortgage” means a mortgage or mortgage lien on an 17 interest in real property in this state given to secure a loan 18 in an original principal amount equal to or less than the 19 maximum principal amount as determined by the division board 20 and adopted by the Iowa finance authority pursuant to chapter 21 17A. 22 f. “Mortgage servicer” means the mortgagee or a person 23 other than the mortgagee to whom a mortgagor or the mortgagor’s 24 successor in interest is instructed by the mortgagee to 25 send payments on a loan secured by the mortgage. A person 26 transmitting a payoff statement for a mortgage is a mortgage 27 servicer for purposes of such mortgage and this chapter. 28 g. “Mortgagee” means the grantee of a mortgage. If a 29 mortgage has been assigned of record, the mortgagee is the last 30 person to whom the mortgage is assigned of record. 31 h. “Mortgagor” means the grantor of a mortgage. 32 i. “Participating abstractor” means an abstractor 33 participating in the title guaranty program. 34 j. “Payoff statement” means a written statement furnished by 35 -1- LSB 1240DP (4) 85 rh/sc 1/ 7

S.F. _____ H.F. _____ the mortgage servicer which sets forth all of the following: 1 (1) The unpaid balance of the loan secured by a mortgage, 2 including principal, interest, and any other charges properly 3 due under or secured by the mortgage, or the amount required to 4 be paid in order to release or partially release the mortgage. 5 (2) The address where payment is to be sent or other 6 specific instructions for making a payment. 7 (3) The legal description, street address, or other 8 description sufficient to identify the property that will be 9 released from the mortgage. 10 2. Application. The division may execute and record a 11 certificate of release on behalf of the division in the real 12 property records of each county in which a mortgage is recorded 13 as provided in this section if all of the following are 14 satisfied: 15 a. The applicant submits all of the following in writing to 16 the division: 17 (1) A payoff statement or other documentation of the amount 18 due, acceptable to the division, as evidence that the mortgage 19 does not continue to secure an unpaid obligation due the 20 mortgagee or an unfunded commitment by the mortgagor to the 21 mortgagee. 22 (2) Evidence that payment was made, including, if 23 available, a statement as to the date the payment was received 24 by the mortgagee or mortgage servicer, with supporting 25 documentation, as evidenced by one or more of the following: 26 (a) A bank check, certified check, escrow account check, 27 real estate broker trust account check, attorney trust account 28 check, or wire receipt, that was negotiated by the mortgagee or 29 mortgage servicer. 30 (b) Other documentary evidence, acceptable to the division, 31 of payment to the mortgagee or mortgage servicer. 32 b. The applicant confirms in writing to the division all of 33 the following: 34 (1) More than thirty days have elapsed since the date the 35 -2- LSB 1240DP (4) 85 rh/sc 2/ 7

S.F. _____ H.F. _____ payment was sent. 1 (2) An effective satisfaction or release of the mortgage 2 has not been executed and recorded within thirty days after the 3 date of payment. 4 3. Notice. 5 a. Prior to the execution and filing of a certificate of 6 release pursuant to this section, the division shall notify the 7 mortgage servicer in writing of all of the following: 8 (1) The mortgage has not been released. 9 (2) The division’s intention to execute and record 10 a certificate of release pursuant to this section after 11 expiration of the thirty-day period following the sending of 12 the notice. 13 b. The notice shall include instructions to notify the 14 division in writing within thirty days of the effective date of 15 the notice of any reason why the certificate of release should 16 not be executed and recorded. 17 c. For purposes of this section, notice may be served by any 18 of the following methods: 19 (1) By certified mail or any commercial delivery service, 20 properly addressed with postage or cost of delivery provided 21 for. 22 (2) By facsimile transmission or electronic mail to an 23 address provided by the mortgage servicer, but only if the 24 mortgage servicer agrees to receive notice in that manner. 25 (3) By publication in a newspaper of general circulation 26 published in each county where the mortgage is recorded once 27 each week for three consecutive weeks after receiving an 28 affidavit by the applicant that service in accordance with the 29 provisions of subparagraph (1) or (2) cannot be made on the 30 mortgage servicer. 31 (4) By otherwise causing the notice to be received by the 32 mortgage servicer within the time it would have been received 33 if notice had been served by certified mail or commercial 34 delivery service. 35 -3- LSB 1240DP (4) 85 rh/sc 3/ 7

S.F. _____ H.F. _____ d. For purposes of this section, notice is effective under 1 any of the following circumstances: 2 (1) The day after the notice is deposited with a commercial 3 delivery service for overnight delivery. 4 (2) Three days after the notice is deposited with the United 5 States postal service, or with a commercial delivery service 6 for delivery other than by overnight delivery. 7 (3) The day the notice is transmitted, if served pursuant to 8 paragraph “c” , subparagraph (2). 9 (4) On the last day of publication, if published pursuant to 10 paragraph “c” , subparagraph (3). 11 (5) The day the notice is received, if served by a method 12 other than as provided in paragraph “c” , subparagraph (1), (2), 13 or (3). 14 e. If, prior to executing and recording the certificate of 15 release, the division receives a written notification setting 16 forth a reason that is satisfactory to the division as to why 17 the certificate of release should not be executed, the division 18 shall not execute and record the certificate of release. 19 4. Contents. A certificate of release executed under this 20 section must contain substantially the information set forth 21 as follows: 22 a. The name of the mortgagor. 23 b. The name of the original mortgagee. 24 c. The date of the mortgage. 25 d. The date of recording, including the volume and page or 26 other applicable recording information in the real property 27 records of each county where the mortgage is recorded. 28 e. A statement that the release was prepared in accordance 29 with this section. 30 5. Execution. A certificate of release under this section 31 shall be executed and acknowledged in the same manner as 32 required by law for the execution of a deed. 33 6. Recording. The certificate of release or partial 34 release shall be recorded in each county where the mortgage is 35 -4- LSB 1240DP (4) 85 rh/sc 4/ 7

S.F. _____ H.F. _____ recorded. 1 7. Effect. 2 a. For purposes of a release or partial release of a 3 mortgage, a certificate of release executed under this section 4 that contains the information and statements required under 5 subsection 4 is prima facie evidence of the facts contained in 6 such release or partial release, is entitled to be recorded 7 with the county recorder where the mortgage is recorded, 8 operates as a release or partial release of the mortgage 9 described in the certificate of release, and may be relied upon 10 by any person who owns or subsequently acquires an interest in 11 the property released from the mortgage. The county recorder 12 shall rely upon the certificate of release to release the 13 mortgage. 14 b. Recording of a wrongful or erroneous certificate of 15 release by the division shall not relieve the mortgagor, or the 16 mortgagor’s successors or assigns on the debt, from personal 17 liability on the loan or on other obligations secured by the 18 mortgage. 19 c. In addition to any other remedy provided by law, if the 20 division through an act of negligence wrongfully or erroneously 21 records a certificate of release under this section, the 22 division is liable to the mortgagee and mortgage servicer 23 for actual damages sustained due to the recording of the 24 certificate of release. 25 d. Upon payment of a claim relating to the recording of 26 a certificate of release, the division is subrogated to the 27 rights of the claimant against all persons relating to the 28 claim. 29 8. Fee. The division may charge a fee for services under 30 this section. 31 EXPLANATION 32 This bill relates to the transfer of real estate and the 33 filing of a mortgage release certificate, providing for a fee, 34 and making remedies applicable. 35 -5- LSB 1240DP (4) 85 rh/sc 5/ 7

S.F. _____ H.F. _____ Code section 16.92 allows the title guaranty division 1 (division) of the Iowa finance authority to execute and record 2 a mortgage release certificate in each county (county recorder) 3 in which a mortgage is recorded if such mortgage has been 4 paid off but not released of record or has been incorrectly 5 released. 6 The bill reorganizes, consolidates, and amends certain 7 provisions in Code section 16.92 relating to the application 8 process for a certificate of release, notice requirements 9 the division must follow in notifying a mortgage servicer of 10 the division’s intention to execute and record a certificate 11 of release upon the division’s receipt of a mortgage release 12 application, and execution requirements relating to the 13 certificate of release. The bill specifies that a request for 14 a mortgage release certificate may be made by an applicant, 15 defined in the bill as a person licensed to regularly lend 16 moneys to be secured by a mortgage on real property in this 17 state, a licensed real estate broker, a licensed attorney, a 18 participating abstractor, or a licensed closing agent. The 19 applicant is required to submit certain evidence acceptable to 20 the division and the applicant must confirm in writing that 21 the mortgage has been paid off and that no release of the 22 mortgage has occurred. The bill provides that the certificate 23 of release executed by the division is only required to contain 24 certain basic information about the mortgage and the execution 25 of the certificate and also authorizes the division to charge a 26 fee for services relating to the execution of the certificate 27 of release. 28 Under Code section 16.92, for purposes of a release or 29 partial release of a mortgage, a properly executed certificate 30 of release is prima facie evidence of the facts contained in 31 such release or partial release, is entitled to be recorded 32 with the county recorder where the mortgage is recorded, 33 operates as a release or partial release of the mortgage 34 described in the certificate of release, and may be relied upon 35 -6- LSB 1240DP (4) 85 rh/sc 6/ 7

S.F. _____ H.F. _____ by any person who owns or subsequently acquires an interest in 1 the property released from the mortgage. The county recorder 2 is required to rely upon the certificate of release to release 3 the mortgage. In addition to any other remedy provided by 4 law, if the division through an act of negligence wrongfully 5 or erroneously records a certificate of release, the division 6 is liable to the mortgagee and mortgage servicer for actual 7 damages sustained due to the recording of the certificate of 8 release. 9 -7- LSB 1240DP (4) 85 rh/sc 7/ 7