Wisconsin Revises Mortgage Satisfaction Requirements

Mortgage Servicing

On December 12, Wisconsin enacted SB 290, which repealed an existing law governing mortgage satisfaction requirements and adopted provisions similar to the Uniform Residential Mortgage Satisfaction Act (URMSA). Effective immediately, state law allows the recording of an affidavit of satisfaction of a security instrument to be used as another mortgage satisfaction option for mortgages on residential real property. Under this option, upon or at any time after full performance or payment as provided in a payoff statement by the residential property owner, a satisfaction agent authorized by the owner may give the secured creditor notice that the satisfaction agent may record an affidavit of satisfaction of the security instrument. The bill specifies the information that must be contained in the notice that is sent to the secured creditor, including, for example, that the satisfaction agent has reasonable grounds to believe that the property is residential real property and that the secured creditor has received full payment or payment as provided in a payoff statement. It also sets out the right of a settlement agent or a person who is obligated under a security instrument to request a payoff statement from a secured creditor. In addition, among other things, the bill (i) specifies the information that the payoff statement must contain, and provides for penalties against a secured creditor for not sending a timely payoff statement that substantially complies with the content requirements in the bill; (ii) provides for the recording of a document of rescission, which rescinds an erroneously recorded satisfaction or affidavit of satisfaction, keeping the security instrument in force; and (iii) increases from $100 to $1000 the property transfer fee exemption threshold.