HF 704

as introduced - 94th Legislature (2025 - 2026) Posted on 03/20/2025 04:07pm

A bill for an act
relating to financial institutions; modifying provisions governing mortgage payment
satisfaction; amending Minnesota Statutes 2024, sections 47.208, subdivision 1,
by adding a subdivision; 507.41.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2024, section 47.208, subdivision 1, is amended to read:

Subdivision 1.

Delivery required.

deleted text begin Upon written request, deleted text end new text begin Within 45 days of the date full
payment or performance of the loan secured by the mortgage or payment is received, as
provided in a payoff statement as defined in section 507.401, paragraph (h), a mortgagee
or mortgage servicer, as defined in sections 507.401, paragraph (d), and 507.401, paragraph
(e), must issue and submit new text end a good and valid satisfaction of mortgage in recordable form
deleted text begin shall deleted text end new text begin to the county recorder or registrar of titles, as applicable. A good and valid satisfaction
in recordable form must new text end be delivered to any party paying the full and final balance of a
mortgage indebtedness that is secured by Minnesota real estate; such delivery shall be in
hand or by certified mail postmarked within 45 days of the receipt of the written request to
the holder of any interest of record in said mortgage and within 45 days of the payment of
all sums due thereon.

Sec. 2.

Minnesota Statutes 2024, section 47.208, is amended by adding a subdivision to
read:

new text begin Subd. 3. new text end

new text begin Understated payoff statement; reliance. new text end

new text begin (a) If a mortgagee or mortgage
servicer determines the payoff amount provided in a payoff statement was understated, the
mortgagee or mortgage servicer may send a corrected payoff statement.
new text end

new text begin (b) If the mortgagor or the mortgagor's authorized agent, which includes a title insurer
or a title insurer's duly-appointed agent, receives and has reasonable opportunity to act on
a corrected payoff statement issued under paragraph (a) before making payment, the corrected
statement supersedes an earlier statement.
new text end

new text begin (c) A mortgagee or mortgage servicer that sends a payoff statement containing an
understated payoff amount is prohibited from denying the accuracy of the payoff amount
against any person that reasonably and detrimentally relies upon the understated payoff
amount.
new text end

new text begin (d) This section does not: (1) affect the right of a mortgagee or mortgage servicer to
recover any sum that the mortgagee or mortgage servicer did not include in a payoff statement
from any person liable to pay the loan secured by a mortgage; or (2) limit any claim or
defense that a person liable to pay the loan secured by the mortgage may have under law
other than this section.
new text end

Sec. 3.

Minnesota Statutes 2024, section 507.41, is amended to read:

507.41 PENALTY FOR FAILURE TO DISCHARGE.

When any mortgagee, mortgagee's personal representative new text begin , new text end or new text begin mortgagee's new text end assignee,
deleted text begin upon full performance of the conditions of the mortgage, shall fail to discharge the same
within ten days after being thereto requested and after tender of the mortgagee's reasonable
charges therefor, that deleted text end new text begin after receiving full payment or performance of the loan secured by
the mortgage, or payment as provided in a payoff statement, fails to discharge the mortgage
within 45 days, the new text end mortgagee deleted text begin shall be deleted text end new text begin is new text end liable to the mortgagor, the mortgagor's heirs or
assigns, for all actual damages thereby occasioned; and a claim for such damages may be
asserted in an action for discharge of the mortgage. deleted text begin If the defendant be not a resident of the
state, such action may be maintained upon the expiration of 60 days after the conditions of
the mortgage have been performed, without such previous request or tender.
deleted text end