§5165. Issuance of release of mortgage by current mortgagee

A. The provisions of this Section shall apply only to residential mortgages, where a mortgage has been granted by a consumer on a one-to-four family residential immovable property, including a mortgage to finance the initial construction of the one-to-four family residential immovable property. The provisions of this Section shall apply only to mortgages recorded on and after January 1, 2012.

B.(1) Upon extinction of the mortgage in accordance with Civil Code Article 3319, the mortgagor, his successor in ownership or settlement agent may submit a written request, signed by the mortgagor to the mortgagee, to issue a written act of release directing the appropriate recorder of mortgages to cancel the inscription of the mortgage from the mortgage records. The written request that the mortgage be cancelled shall extinguish any obligation on the part of the mortgagee and all additional lenders, on whose behalf the mortgagee may be representing or acting for the benefit of, to make any further loan or advance that would be secured by the mortgage.

(2) If the mortgagee has assigned, transferred, or delegated the servicing rights to a third party, then the duties and liabilities of the mortgagee pursuant to this Section shall apply solely to the third party.

(3) The written request shall be delivered to the mortgagee at the address designated by the mortgagee to be used for such written requests. If the request is accompanied by a payoff check from a settlement agent, the written request shall be delivered to the same address where the payoff check is delivered.

(4) The mortgagee shall issue within forty-five days after receipt from the mortgagor or settlement agent of a written request for cancellation of the mortgage accompanied by the fees required by Paragraph (5) of this Subsection, the act of release along with a request for cancellation that complies with Civil Code Article 3366.

(5) The mortgagee shall submit the act of release of the mortgage directly to the settlement agent if a written request was received by the mortgagee from a settlement agent. The written request to issue an act of release of the mortgage shall be accompanied by sufficient payment to the mortgagee to pay the mortgagee a fee for this service. The mortgagee may charge a fee to the mortgagor or his agent for all services and costs to prepare and execute the act of release and request for cancellation that complies with Civil Code Article 3366, in an amount not to exceed forty dollars, plus postage. Any fees charged by the mortgagee pursuant to this Subsection shall be clearly itemized to the requesting mortgagor or settlement agent in the payoff letter or statement or other communication.

(6) If the mortgagee receives a signed written request, in accordance with Paragraph (1) of this Subsection, directly from the mortgagor or the successor in ownership, and there is no settlement agent involved in forwarding the request, and the required fees in an amount not to exceed one hundred dollars are received by the mortgagee for all services and costs to prepare, execute, and deliver the act of release and request for cancellation that complies with Civil Code Article 3366, along with the appropriate cancellation fees for the recorder of mortgages, then the mortgagee shall, within forty-five days of receiving such request and fees, prepare and submit to the appropriate recorder of mortgages an act of release along with the request for cancellation that complies with Civil Code Article 3366.

(7) A mortgagor may obtain a complimentary copy of the act of release from the mortgagee when there is no settlement agent involved.

C. Upon receipt of the act of release and request for cancellation, the settlement agent shall file them with the appropriate recorder of mortgages within forty-five days.

(1) The mortgagee shall not be liable for damages, fees, or costs caused by the failure of the settlement agent to timely file the act of release and request for cancellation, if the act of release and request for cancellation are in compliance with the law and sufficient to cancel the inscription of the mortgage from the mortgage records.

(2) If the settlement agent fails to timely file the release, he shall be liable for the statutory and actual damages, costs, and fees provided for in Subsection E of this Section.

D. In the event either the mortgagee or settlement agent has failed to comply with the requirements of this Section, the mortgagee and settlement agent shall be provided with written notice of noncompliance identifying the mortgage at issue and the explanation of how they failed to comply with the requirements of this Section, and then the mortgagee and settlement agent shall be given an opportunity to prepare and submit an act of release of mortgage and request for cancellation to the appropriate recorder of mortgages within fifteen days of receiving the notice before any rights accrue pursuant to Subsection E of this Section.

E. If the mortgagee fails to perform the duty required by this Section, the mortgagor or his successor in ownership may, by summary proceedings instituted against the mortgagee, in the parish where the mortgaged property is located, obtain a judgment ordering the mortgage inscription to be cancelled from the records and for the costs, reasonable attorney fees, statutory damages in the amount of five hundred dollars, and actual damages he has suffered from the failure to comply with this Section. Any judgment for damages may be awarded individually, but not in a representative capacity. The rights to recover damages provided by this Section are personal to the mortgagor or his successor in ownership of the property and may not be assigned.

F. A mortgagee complying with the provisions of this Section shall not be subject to the requirements of R.S. 9:5167.2.

Acts 2011, No. 342, §1, eff. Jan. 1, 2012.