House Study Bill 504 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON JUDICIARY BILL BY CHAIRPERSON BALTIMORE) A BILL FOR An Act relating to mortgage releases. 1 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 2 TLSB 5187YC (2) 87 asf/rj

H.F. _____ Section 1. Section 535B.11, subsection 5, Code 2018, is 1 amended by striking the subsection. 2 Sec. 2. Section 655.1, Code 2018, is amended to read as 3 follows: 4 655.1 Written instrument acknowledging satisfaction. 5 When the amount due on a mortgage is paid off, the mortgagee, 6 the mortgagee’s personal representative or assignee, or those 7 legally acting for the mortgagee, and in case of payment 8 of a school fund mortgage the county auditor, must within 9 thirty days of payment in full, shall acknowledge satisfaction 10 thereof by execution of an instrument of satisfaction which 11 is in writing, referring refers to the mortgage, and is duly 12 acknowledged and recorded. Notwithstanding the foregoing, 13 if the mortgage secures a revolving line of credit, then the 14 mortgagee is not required to file a satisfaction upon payment 15 in full unless the mortgagor makes a written request to the 16 mortgagee that the mortgage be released. 17 Sec. 3. Section 655.3, Code 2018, is amended to read as 18 follows: 19 655.3 Penalty for failure to discharge. 20 If a mortgagee, or a mortgagee’s personal representative 21 or assignee, upon full performance of the conditions of the 22 mortgage, fails to discharge such mortgage within thirty days 23 after a request for discharge, the mortgagee is liable to the 24 mortgagor and the mortgagor’s heirs or assigns, for all actual 25 damages caused by such failure and a penalty of five hundred 26 dollars , including plus reasonable attorney fees. A claim for 27 such damages may be asserted in an action for discharge of the 28 mortgage. If the defendant is not a resident of this state, 29 such action may be maintained upon the expiration of thirty 30 days after the conditions of the mortgage have been performed, 31 without such previous request or tender. 32 Sec. 4. Section 655.5, Code 2018, is amended to read as 33 follows: 34 655.5 Instrument of satisfaction. 35 -1- LSB 5187YC (2) 87 asf/rj 1/ 2

H.F. _____ When the judgment is paid in full, the mortgagee shall file 1 with the clerk a satisfaction of judgment which shall release 2 the mortgage underlying the action. A mortgagee who fails to 3 file a satisfaction within thirty days of receiving a written 4 request shall be subject to reasonable damages and a penalty of 5 one five hundred dollars plus reasonable attorney fees incurred 6 by the aggrieved party, to be recovered in an action for the 7 satisfaction by the party aggrieved. 8 EXPLANATION 9 The inclusion of this explanation does not constitute agreement with 10 the explanation’s substance by the members of the general assembly. 11 This bill relates to mortgage releases. The bill strikes 12 Code section 535B.11(5), which leaves Code chapter 655 as the 13 sole standard and set of remedies. 14 The bill amends Code section 655.1 to require that within 30 15 days of a mortgagor fully paying off a mortgage, a mortgagee 16 must execute, acknowledge, and record a written instrument of 17 satisfaction referring to the mortgage. The bill provides that 18 if the mortgage secures a revolving line of credit, then the 19 mortgagee is not required to file a satisfaction upon payment 20 in full unless the mortgagor makes a written request to the 21 mortgagee that the mortgage be released. 22 The bill amends Code section 655.3 to establish a penalty 23 of $500 and to allow reasonable attorney fees to be awarded 24 in addition to rather than included in, actual damages, 25 where a mortgagee, or a mortgagee’s personal representative 26 or assignee, upon full performance of the conditions of the 27 mortgage, fails to discharge such mortgage within 30 days after 28 a request for discharge. 29 The bill also amends Code section 655.5 to increase the 30 penalty from $100 to $500 if a mortgagee fails to file a 31 satisfaction of judgment within 30 days of receiving a written 32 request. 33 -2- LSB 5187YC (2) 87 asf/rj 2/ 2