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SF2960 (Legislative Session 94 (2025-2026))

Mortgage payment satisfaction provisions modifications

Related bill: HF704

AI Generated Summary

Purpose of the Bill

The purpose of this bill is to modify the existing laws related to how mortgages are paid off and officially recorded in Minnesota. Specifically, it addresses the procedures and timelines for creditors when they receive the final payment on a mortgage, and what happens if there are errors in the payoff statements.

Main Provisions

  1. Issuance of Satisfaction of Mortgage:

    • Mortgage holders are required to issue and submit a valid and recordable satisfaction of mortgage within 45 days after receiving full payment or upon written request.
    • This satisfaction document must be delivered either in person or via certified mail to any party paying off the mortgage.

  2. Corrected Payoff Statements:

    • If an error occurs in the initial payoff statement provided by a mortgagee or mortgage servicer (where the amount is understated), they can issue a corrected statement.
    • The corrected payoff statement will replace the earlier one if the recipient has time to act before making a payment.

  3. Liability for Errors:

    • Mortgagees cannot deny the accuracy of an understated payoff statement if someone has reasonably relied on it to their detriment.
    • This does not affect the mortgagee's right to recover any unpaid amounts that were omitted from the original statement.

  4. Penalties for Non-compliance:

    • If a mortgagee fails to discharge the mortgage within 45 days after receiving full payment, they are liable for any actual damages incurred by the mortgagor or their assigns.
    • Actions can be taken against out-of-state mortgagees if 60 days have passed since loan satisfaction without the necessary discharge.

Significant Changes to Existing Law

  • The timeframe for mortgagees to issue a satisfaction of the mortgage after full payment is explicitly set at 45 days.
  • Introduces accountability measures for mortgagees if they fail to provide accurate payoff statements or timely discharge a mortgage.

Relevant Terms

  • Mortgage satisfaction
  • Payoff statement
  • Corrected payoff statement
  • Liability for understatement
  • Mortgage discharge
  • Actual damages
  • Certified mail

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
March 23, 2025SenateFloorActionIntroduction and first reading
March 23, 2025SenateFloorActionReferred toCommerce and Consumer Protection

Citations

 
[
  {
    "analysis": {
      "added": [
        "Requires the delivery in hand or by certified mail within 45 days."
      ],
      "removed": [],
      "summary": "This amendment addresses the conditions under which a mortgage satisfaction must be recorded.",
      "modified": [
        "Clarifies the timeline and method for recording a mortgage satisfaction."
      ]
    },
    "citation": "47.208",
    "subdivision": "subdivision 1"
  },
  {
    "analysis": {
      "added": [
        "Extends the timeframe for discharge after full payment to 45 days."
      ],
      "removed": [],
      "summary": "This section imposes penalties for failing to discharge a mortgage after the conditions are met.",
      "modified": [
        "Specifies liability for failure to act within the set timeframe."
      ]
    },
    "citation": "507.41",
    "subdivision": ""
  }
]

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