House Engrossed State of Arizona House of Representatives Forty fourth Legislature First Regular Session by gsb91987

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									                                                                 House Engrossed

      State of Arizona
      House of Representatives
      Forty-fourth Legislature
      First Regular Session
      1999




                         HOUSE BILL 2662


                                        AN ACT

     amending sections 33-707 and 33-741, Arizona Revised Statutes; amending title
     33, chapter 6, article 3, Arizona Revised Statutes, by adding section 33-750;
     amending section 42-18202, Arizona Revised Statutes; relating to real
     property.

 1   Be it enacted by the Legislature of the State of Arizona:
 2         Section|1.||Section 33-707, Arizona Revised Statutes, is amended to
 3   read:
 4         33-707.||Acknowledgment of satisfaction; recording
 5         A.||If a mortgagee, trustee or person entitled to payment receives full
 6   satisfaction of a mortgage or deed of trust, he shall acknowledge
 7   satisfaction of the mortgage or deed of trust by delivering to the person
 8   making satisfaction or by recording a sufficient release or satisfaction of
 9   mortgage or deed of release and reconveyance of the deed of trust, which
10   release, satisfaction of mortgage or deed of release and reconveyance shall
11   contain the docket and page number or recording number of the mortgage or
12   deed of trust.    It shall not be necessary for the trustee to join in the
13   acknowledgment or satisfaction, or in the release, satisfaction of mortgage
14   or deed of release and reconveyance. The recorded release or satisfaction
15   of mortgage or deed of release and reconveyance constitutes conclusive
16   evidence of full or partial satisfaction and release of the mortgage or deed
17   of trust in favor of purchasers and encumbrancers for value and without
18   actual notice.
19         B.||When a mortgage or deed of trust is satisfied by a release or
20   satisfaction of mortgage or deed of release and reconveyance, except where
21   the record of such deed of trust or mortgage has been destroyed or reduced
22   to microfilm, the recorder shall record the release or satisfaction of the
     H.B. 2662




 1   deed of trust or mortgage showing the book and page or recording number where
 2   the deed of trust or mortgage is recorded.
 3         C.||If the record of such mortgage or deed of trust has been destroyed
 4   and the record thereof reduced to microfilm, it shall be sufficient evidence
 5   of satisfaction of any such mortgage or deed of trust for the release or
 6   satisfaction of mortgage or deed of release and reconveyance to be recorded
 7   and indexed as such. The instrument shall sufficiently identify the mortgage
 8   or deed of trust by parties and by book and page or recording number of the
 9   official records.     Such instrument shall be treated as a release or
10   satisfaction of mortgage or deed of release and reconveyance and recorded.
11         D.||If the note secured by a mortgage or deed of trust has been lost
12   or destroyed, the assignee, mortgagee or beneficiary shall, before
13   acknowledging satisfaction, make an affidavit that he is the lawful owner of
14   the note and that it has been paid, but cannot be produced for the reason
15   that it has been lost or destroyed, and the affidavit shall be recorded. If
16   the record of such mortgage or deed of trust has been destroyed and the
17   record thereof reduced to microfilm, such affidavit shall be recorded and
18   indexed as releases, satisfactions of mortgage and deeds of release and
19   reconveyance are recorded and indexed and shall have the same force and
20   effect as a release or satisfaction of a mortgage or deed of release and
21   reconveyance as provided in subsection A of this section.
22         E.||If a full or partial release or satisfaction of mortgage or deed
23   of release and reconveyance of deed of trust, which according to its terms
24   recites that it secures an obligation having a stated indebtedness not
25   greater than five hundred thousand dollars exclusive of interest, has not
26   been executed and recorded pursuant to subsection A or C of this section
27   within sixty days of full or partial satisfaction of the obligation secured
28   by such mortgage or deed of trust, then a title insurer as defined in section
29   20-1562 may prepare, execute and record a full or partial release or
30   satisfaction of mortgage or deed of full or partial release and reconveyance
31   of deed of trust. However, At least thirty days prior to the issuance and
32   recording of any such release or satisfaction of mortgage or deed of release
33   and reconveyance pursuant to this subsection, the title insurer shall mail
34   by certified mail with postage prepaid, return receipt requested, to the
35   mortgagee of record or to the trustee and beneficiary of record and their
36   respective successors in interest of record at their last known address shown
37   of record and to any persons who according to the records of the title
38   insurer received payment of the obligation at the address shown in such
39   records, a notice of its intention to release the mortgage or deed of trust
40   accompanied by a copy of the release or satisfaction of mortgage or deed of
41   release and reconveyance to be recorded which shall set forth:




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 1         1.||The name of the beneficiary or mortgagee or any successors in
 2   interest of record of such mortgagee or beneficiary and, if known, the name
 3   of any servicing agent.
 4         2.||The name of the original mortgagor or trustor.
 5         3.||The name of the current record owner of the property and if the
 6   release or satisfaction of mortgage or deed of release and reconveyance is
 7   a partial release, the name of the current record owner of the parcel
 8   described in the partial release or satisfaction of mortgage or deed of
 9   partial release and reconveyance of deed of trust .
10         4.||The recording reference to the deed of trust or mortgage.
11         5.||The date and amount of payment, if known.
12         6.||A statement that the title insurer has actual knowledge that the
13   obligation secured by the mortgage or deed of trust has been paid in full,
14   or if the release or satisfaction of mortgage or deed of release and
15   reconveyance of deed of trust is a partial release, a statement that the
16   title insurer has actual knowledge that the partial payment required for the
17   release of the parcel described in the partial release or satisfaction has
18   been paid.
19         F.||The release or satisfaction of mortgage or release and reconveyance
20   of deed of trust may be executed by a duly appointed attorney-in-fact of the
21   title insurer, but such delegation shall not relieve the title insurer from
22   any liability pursuant to this section.
23         G.||A full or partial release or satisfaction of mortgage or deed of
24   full or partial release and reconveyance of deed of trust issued pursuant to
25   subsection E of this section shall be entitled to recordation and, when
26   recorded, shall constitute a full or partial release or satisfaction of
27   mortgage or deed of release and reconveyance of deed of trust issued pursuant
28   to subsection A or C of this section.
29         H.||Where an obligation secured by a deed of trust or mortgage was paid
30   in full prior to September 21, 1991, and no release or satisfaction of
31   mortgage or deed of release and reconveyance of deed of trust has been issued
32   and recorded within sixty days of September 21, 1991, a release or
33   satisfaction of mortgage or deed of release and reconveyance of deed of trust
34   as provided for in subsection E of this section may be prepared and recorded
35   without the notice prescribed by subsection E of this section .
36         I.||A release or satisfaction of mortgage or a release and reconveyance
37   of deed of trust by a title insurer under the provisions of subsection E of
38   this section shall not constitute a defense nor release any person from
39   compliance with subsections A through D of this section or from liability
40   under section 33-712.
41         J.||In addition to any other remedy provided by law, a title insurer
42   preparing or recording the release and satisfaction of mortgage or the
43   release and reconveyance of deed of trust pursuant to subsection E of this


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     H.B. 2662




 1   section shall be liable to any party for actual damage, including attorneys’
 2   fees, which any person may sustain by reason of the issuance and recording
 3   of the release and satisfaction of mortgage or release and reconveyance of
 4   deed of trust.
 5         K.||The title insurer shall not record a release and satisfaction of
 6   mortgage or release and reconveyance of deed of trust if, prior to the
 7   expiration of the thirty day period specified in subsection E of this
 8   section, the title insurer receives a notice from the mortgagee, trustee,
 9   beneficiary, holder or servicing agent which states that the mortgage or deed
10   of trust continues to secure an obligation, or in the case of a partial
11   release or satisfaction of mortgage or deed of partial release and
12   reconveyance of deed of trust, a notice that states that the partial payment
13   required to release the parcel described in the partial release or
14   satisfaction has not been paid.
15         L.||The title insurer may charge a reasonable fee to the owner of the
16   land or other person requesting a release and satisfaction of mortgage or
17   release and reconveyance of deed of trust, including but not limited to
18   search of title, document preparation and mailing services rendered and may
19   in addition collect official fees.
20         Sec.|2.||Section 33-741, Arizona Revised Statutes, is amended to read:
21         33-741.||Definitions
22         In this article, unless the context otherwise requires:
23         1.||"Account servicing agent" means a joint agent of seller and
24   purchaser, appointed under the contract or under a separate agreement
25   executed by the seller and the purchaser, to hold documents and collect
26   monies due under the contract, who does business under the laws of this state
27   as a bank, trust company, escrow agent, savings and loan association,
28   insurance company or real estate broker, or who is licensed, chartered or
29   regulated by the federal deposit insurance corporation,| or the comptroller
30   of the currency or the federal savings and loan insurance corporation, or who
31   is a member of the state bar of Arizona.
32         2.||"Contract" means a contract for conveyance of real property, a
33   contract for deed, a contract to convey, an agreement for sale or any similar
34   contract through which a seller has conveyed to a purchaser equitable title
35   in property and under which the seller is obligated to convey to the
36   purchaser the remainder of the seller’s title in the property, whether legal
37   or equitable, on payment in full of all monies due under the contract. This
38   article does not apply to purchase contracts and receipts, escrow
39   instructions or similar executory contracts which are intended to control the
40   rights and obligations of the parties to executory contracts pending the
41   closing of a sale or purchase transaction.
42         3.||"Monies due under the contract" means:




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     H.B. 2662




 1         (a)||Any principal and interest payments which are currently due and
 2   payable to the seller.
 3         (b)||Any principal and interest payments which are currently due and
 4   payable to other persons who hold existing liens and encumbrances on the
 5   property, the unpaid principal portion of which constitutes a portion of the
 6   purchase price, as stated in the contract, if the principal and interest
 7   payments were paid by the seller pursuant to the terms of the contract and
 8   to protect his interest in the property.
 9         (c)||Any delinquent taxes and assessments, including interest and
10   penalty, due and payable to any governmental entity authorized to impose
11   liens on the property which are the purchaser’s obligations under the
12   contract, if the taxes and assessments were paid by the seller pursuant to
13   the terms of the contract and to protect his interest in the property.
14         (d)||Any unpaid premiums for any policy or policies of insurance which
15   are the obligation of the purchaser to maintain under the contract, if the
16   premiums were paid by the seller pursuant to the terms of the contract and
17   to protect his interest in the property.
18         4.||"Payoff deed" means the deed that the seller is obligated to
19   deliver to the purchaser on payment in full of all monies due under the
20   contract to convey to the purchaser the remainder of the seller’s title in
21   the property, whether legal or equitable, as prescribed by the terms of the
22   contract.
23         4.||5.||"Property" means the real property described in the contract
24   and any personal property included under the contract.
25         5.||6.||"Purchaser" means the person or any successor in interest to
26   the person who has contracted to purchase the seller’s title to the property
27   which is the subject of the contract.
28         6.||7.||"Seller" means the person or any successor in interest to the
29   person who has contracted to convey his title to the property which is the
30   subject of the contract.
31         Sec.|3.||Title 33, chapter 6, article 3, Arizona Revised Statutes, is
32   amended by adding section 33-750, to read:
33         33-750.||Conveyance by seller; payment in full; payoff deed
34         A.||A seller who is entitled to payment and who receives full payment
35   of all monies due under the contract shall deliver to the person who made
36   full payment a payoff deed that conveys to the purchaser the real property
37   described in the contract. The deed shall be entitled "payoff deed", shall
38   state that it is being delivered to consummate a contract and shall include
39   the docket and page number or recording number of the contract.
40         B.||for a contract that provides for a purchase price obligation of
41   five hundred thousand dollars or less exclusive of interest, if a seller does
42   not deliver a payoff deed pursuant to subsection A within sixty days of
43   payment in full of all monies due under the contract, a title insurer as


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     H.B. 2662




 1   defined in section 20-1562 may prepare, execute and record a payoff deed.
 2   At least thirty days before issuing and recording a payoff deed pursuant to
 3   this subsection, the title insurer shall mail notice of its intention to
 4   record the payoff deed and a copy of the payoff deed by certified mail with
 5   postage prepaid and return receipt requested to all of the following:
 6         1.||The seller of record and the seller’s respective successors in
 7   interest of record at their last known addresses shown of record.
 8         2.||The account servicing agent if known.
 9         3.||Any person who received payment in full of the monies due under the
10   contract according to the records of the title insurer at the address shown
11   in the title insurer’s records.
12         C.||The payoff deed prescribed by subsection B of this section shall
13   set forth all of the following:
14         1.||The name of the original seller and the seller’s successors in
15   interest of record.
16         2.||The name of the original account servicing agent and the successors
17   in interest of the account servicing agent if of record or if known to the
18   title insurer.
19         3.||The name of the original purchaser and any successors in interest
20   of record of that purchaser.
21         4.||The date of recording and docket and page number or recording
22   number of the contract.
23         5.||The date and amount of payment.
24         6.||A statement that the title insurer has actual knowledge that the
25   monies due under the contract have been paid in full.
26         D.||The title insurer or a duly appointed attorney-in-fact of the title
27   insurer shall execute the payoff deed.      Any delegation pursuant to this
28   subsection does not relieve the title insurer from any liability pursuant to
29   this section.
30         E.||A payoff deed issued pursuant to subsection B of this section is
31   entitled to recordation and, when recorded, constitutes a payoff deed issued
32   pursuant to subsection A of this section.
33         F.||In addition to any other remedy provided by law, a title insurer
34   preparing or recording the payoff deed pursuant to subsection B of this
35   section is liable to any party for actual damage, including attorney fees,
36   that any person may sustain by reason of the issuance and recording of the
37   payoff deed.
38         G.||The title insurer shall not record a payoff deed if the title
39   insurer receives notice before the expiration of the thirty day period
40   prescribed by subsection B of this section from the seller or account
41   servicing agent that the monies due under the contract have not been paid in
42   full.
43         H.||The title insurer may charge a reasonable fee to the owner of the
44   land or any other person who requests a payoff deed including a fee for

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    H.B. 2662




1   performing a title search, document preparation and mailing services and in
2   addition may collect recording or other official fees.
3         Sec.|4.||Section 42-18202, Arizona Revised Statutes, is amended to
4   read:




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     H.B. 2662




 1         42-18202.||Notice
 2         A.||At least thirty days before filing an action to foreclose the right
 3   to redeem under this article, the purchaser shall send notice of intent to
 4   file the foreclosure action by certified mail to:
 5         1.||The property owner of record on the current tax roll according to
 6   the records of the county recorder in the county in which the property is
 7   located.
 8         2.||The treasurer of the county in which the real property is located.
 9         B.||The notice shall include:
10         1.||The property owner’s name.
11         2.||The real property tax parcel identification number.
12         3.||The legal description of the real property.
13         4.||The certificate of purchase number.
14         5.||The proposed date of filing the action.




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