S.F. 2138 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, future 14 advances, or other future obligations, the mortgagee is not 15 required to file a satisfaction upon payment in full unless 16 the mortgagor makes a written request to the mortgagee that 17 the mortgage be released and, if such written request is made, 18 the mortgagee shall file the release within thirty days after 19 payment in full or such written request is made whichever 20 occurs later. 21 Sec. 3. Section 655.3, Code 2018, is amended to read as 22 follows: 23 655.3 Penalty for failure to discharge. 24 If a mortgagee, or a mortgagee’s personal representative 25 or assignee, upon full performance of the conditions of the 26 mortgage, fails to discharge such mortgage within thirty days 27 after a request for discharge as set forth in section 655.1 , 28 the mortgagee is liable to the mortgagor and the mortgagor’s 29 heirs or assigns, for all actual damages caused by such 30 failure and a penalty of five hundred dollars , including plus 31 reasonable attorney fees. A claim for such damages may be 32 asserted in an action for discharge of the mortgage. If the 33 defendant is not a resident of this state, such action may 34 be maintained upon the expiration of thirty days after the 35 -1- LSB 5187SV (3) 87 asf/rj 1/ 3

S.F. 2138 conditions of the mortgage have been performed, without such 1 previous request or tender. 2 Sec. 4. Section 655.5, Code 2018, is amended to read as 3 follows: 4 655.5 Instrument of satisfaction. 5 When the judgment is paid in full, the mortgagee shall file 6 with the clerk a satisfaction of judgment which shall release 7 the mortgage underlying the action. A mortgagee who fails to 8 file a satisfaction within thirty days of receiving a written 9 request shall be subject to reasonable damages and a penalty of 10 one five hundred dollars plus reasonable attorney fees incurred 11 by the aggrieved party, to be recovered in an action for the 12 satisfaction by the party aggrieved. 13 Sec. 5. NEW SECTION . 655.6 Limitation of liability. 14 A mortgagee is not liable under section 655.3 if all of the 15 following apply: 16 1. The mortgagee established reasonable procedures to 17 achieve compliance with its obligations under 655.3. 18 2. The mortgagee complied with that procedure in good faith. 19 3. The mortgagee was unable to comply with its obligations 20 because of circumstances beyond its control. 21 EXPLANATION 22 The inclusion of this explanation does not constitute agreement with 23 the explanation’s substance by the members of the general assembly. 24 This bill relates to mortgage releases. The bill strikes 25 Code section 535B.11(5), which leaves Code chapter 655 as the 26 sole standard and set of remedies. 27 The bill amends Code section 655.1 to require that within 30 28 days of a mortgagor fully paying off a mortgage, a mortgagee 29 must execute, acknowledge, and record a written instrument of 30 satisfaction referring to the mortgage. The bill provides that 31 if the mortgage secures a revolving line of credit, future 32 advances, or other future obligations, the mortgagee is not 33 required to file a satisfaction upon payment in full unless the 34 mortgagor makes a written request to the mortgagee that the 35 -2- LSB 5187SV (3) 87 asf/rj 2/ 3

S.F. 2138 mortgage be released and, if such written request is made, the 1 mortgagee shall file the release within 30 days after payment 2 in full or after the request is made whichever occurs later. 3 The bill amends Code section 655.3 to establish a penalty 4 of $500 and to allow reasonable attorney fees to be awarded 5 in addition to rather than included in, actual damages, 6 where a mortgagee, or a mortgagee’s personal representative 7 or assignee, upon full performance of the conditions of the 8 mortgage, fails to discharge such mortgage as set forth in 9 Code section 655.1. The bill eliminates an authorization that 10 provides that if the defendant is not a resident of this state, 11 such action may be maintained upon the expiration of 30 days 12 after the conditions of the mortgage have been performed, 13 without such previous request of tender. 14 The bill also amends Code section 655.5 to increase the 15 penalty from $100 to $500 if a mortgagee fails to file a 16 satisfaction of judgment within 30 days of receiving a written 17 request. 18 The bill creates new Code section 655.6 to provide that a 19 mortgagee is not liable under Code section 655.3 if all of the 20 following circumstances are present: the mortgagee established 21 reasonable procedures to achieve compliance with its 22 obligations under Code section 655.3; the mortgagee complied 23 with that procedure in good faith; and the mortgagee was unable 24 to comply with its obligations because of circumstances beyond 25 its control. 26 -3- LSB 5187SV (3) 87 asf/rj 3/ 3