1.1                          A bill for an act 
  1.2             relating to real property; title insurance; modifying 
  1.3             mortgage release certificate language to include 
  1.4             assignment of rents and profits; amending Minnesota 
  1.5             Statutes 1998, sections 507.401, subdivisions 1, 3, 6, 
  1.6             and 7; and 559.17, by adding a subdivision. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 1998, section 507.401, 
  1.9   subdivision 1, is amended to read: 
  1.10     Subdivision 1.  [DEFINITIONS.] (a) The definitions in this 
  1.11  subdivision apply to this section. 
  1.12     (b) "Assignment of rents and profits" means an assignment, 
  1.13  whether in a separate document or in a mortgage, of any of the 
  1.14  benefits accruing under a recorded or unrecorded lease or 
  1.15  tenancy existing, or subsequently created, on property 
  1.16  encumbered by a mortgage, which is given as additional security 
  1.17  for the debt secured by the mortgage. 
  1.18     (c) "Mortgage" means a mortgage or mortgage lien, including 
  1.19  any assignment of rents and profits given as additional security 
  1.20  for the debt secured by that lien, on an interest in real 
  1.21  property in this state given to secure a loan in the original 
  1.22  principal amount of $500,000 or less. 
  1.23     (c) (d) "Mortgagee" means: 
  1.24     (1) the grantee of a mortgage; or 
  1.25     (2) if a mortgage has been assigned of record, the last 
  1.26  person to whom the mortgage has been assigned of record. 
  2.1      (d) (e) "Mortgage servicer" means the last person to whom a 
  2.2   mortgagor or the mortgagor's successor in interest has been 
  2.3   instructed by a mortgagee to send payments on a loan secured by 
  2.4   a mortgage.  A person transmitting a payoff statement is the 
  2.5   mortgage servicer for the mortgage described in the payment 
  2.6   payoff statement.  
  2.7      (e) (f) "Mortgagor" means the grantor of a mortgage. 
  2.8      (g) "Partial release" means the release of specified 
  2.9   parcels of land from a mortgage. 
  2.10     (f) (h) "Payoff statement" means a statement of the amount 
  2.11  of: 
  2.12     (1) the unpaid balance of a loan secured by a mortgage, 
  2.13  including principal, interest, and any other charges properly 
  2.14  due under or secured by the mortgage;, and 
  2.15     (2) interest on a per day basis for the unpaid balance; or 
  2.16     (2) the portion of the unpaid balance of the loan secured 
  2.17  by the mortgage required by the mortgagee or mortgage servicer 
  2.18  to be paid as a condition for the issuance of a partial release. 
  2.19     (g) (i) "Record" means to record with the county recorder 
  2.20  or file with the registrar of titles. 
  2.21     (h) (j) "Title insurance company" means a corporation or 
  2.22  other business entity authorized and licensed to transact the 
  2.23  business of insuring titles to interests in real property in 
  2.24  this state under chapter 68A. 
  2.25     Sec. 2.  Minnesota Statutes 1998, section 507.401, 
  2.26  subdivision 3, is amended to read: 
  2.27     Subd. 3.  [CONTENTS.] A certificate of release executed 
  2.28  under this section must contain substantially all of the 
  2.29  following: 
  2.30     (1) the name of the mortgagor, the name of the original 
  2.31  mortgagee, and, if applicable, the mortgage servicer, the date 
  2.32  of the mortgage, the date of recording, and volume and page or 
  2.33  document number in the real property records where the mortgage 
  2.34  is recorded, together with similar information for the last 
  2.35  recorded assignment of the mortgage; 
  2.36     (2) if applicable, the date of any assignment of rents and 
  3.1   profits, the date of its recording, and its volume and page or 
  3.2   document number in the real property records where it has been 
  3.3   recorded or filed, together with similar information for the 
  3.4   last recorded assignment thereof; 
  3.5      (3) a statement that the mortgage was in the original 
  3.6   principal amount of $500,000 $1,000,000 or less; 
  3.7      (3) (4) a statement that the person executing the 
  3.8   certificate of release is an officer or a duly appointed agent 
  3.9   of a title insurance company authorized and licensed to transact 
  3.10  the business of insuring titles to interests in real property in 
  3.11  this state under chapter 68A; 
  3.12     (4) (5) a statement that the certificate of release is made 
  3.13  on behalf of the mortgagor or a person who acquired title from 
  3.14  the mortgagor to all or a part of the property described in the 
  3.15  mortgage; 
  3.16     (5) (6) a statement that the mortgagee or mortgage servicer 
  3.17  provided a payoff statement which was used to make full or 
  3.18  partial payment in full of the unpaid balance of the loan 
  3.19  secured by the mortgage; and 
  3.20     (6) (7) a statement that full or partial payment in full of 
  3.21  the unpaid balance of the loan secured by the mortgage was made 
  3.22  in accordance with the written or verbal payoff statement; and 
  3.23     (8) where the certificate of release affects only a portion 
  3.24  of the land encumbered by the mortgage, a legal description of 
  3.25  the portion being released. 
  3.26     Sec. 3.  Minnesota Statutes 1998, section 507.401, 
  3.27  subdivision 6, is amended to read: 
  3.28     Subd. 6.  [RECORDING.] If a mortgage is recorded in more 
  3.29  than one county and a certificate of release is recorded in one 
  3.30  of them, a certified copy of the certificate of release may be 
  3.31  recorded in another county with the same effect as the 
  3.32  original.  In all cases, the certificate of release shall be 
  3.33  entered and indexed as satisfactions of mortgage and releases of 
  3.34  assignments of rents and profits are entered and indexed. 
  3.35     Sec. 4.  Minnesota Statutes 1998, section 507.401, 
  3.36  subdivision 7, is amended to read: 
  4.1      Subd. 7.  [APPLICATION.] This section applies only to a 
  4.2   mortgage in the original principal amount of $500,000 $1,000,000 
  4.3   or less. 
  4.4      Sec. 5.  Minnesota Statutes 1998, section 559.17, is 
  4.5   amended by adding a subdivision to read: 
  4.6      Subd. 3.  [SATISFACTION, RELEASE, AND ASSIGNMENT.] (a) An 
  4.7   assignment of rents and profits under this section, whether in 
  4.8   the mortgage or in a separate instrument, shall expire: 
  4.9      (1) with respect to the rents and profits from all of the 
  4.10  mortgaged property, upon recording in the office of the county 
  4.11  recorder or filing in the office of the registrar of titles of 
  4.12  the county where the mortgaged property is located, of a 
  4.13  satisfaction of the mortgage or a certificate of release 
  4.14  complying with section 507.401 in lieu of a satisfaction of the 
  4.15  mortgage; or 
  4.16     (2) with respect to the rents and profits from a portion of 
  4.17  the mortgaged property, upon recording in the office of the 
  4.18  county recorder or filing in the office of the registrar of 
  4.19  titles of the county where that portion of the mortgaged 
  4.20  property is located, of a release of that portion of the 
  4.21  mortgaged property from the lien of the mortgage, or a 
  4.22  certificate of release complying with section 507.401 in lieu of 
  4.23  a release of that portion of the mortgaged property. 
  4.24  No separate reassignment of the rents and profits or 
  4.25  satisfaction or release of the assignment is required. 
  4.26     (b) An assignment of a mortgage, whether or not the 
  4.27  mortgage mentions an assignment of rents and profits, is 
  4.28  sufficient to assign both the mortgage and the assignment of 
  4.29  rents and profits permitted by this subdivision which secures 
  4.30  the debt secured by the mortgage, and no separate assignment of 
  4.31  the assignment of rents and profits shall be required. 
  4.32     Sec. 6.  [APPLICATION.] 
  4.33     Sections 1 to 5 apply to all mortgages and assignments of 
  4.34  rents and profits, whenever executed, except as to those 
  4.35  mortgages and assignments of rents and profits, the rights to 
  4.36  which have been fully adjudicated or which are the subject of 
  5.1   pending litigation as of the effective date of this act.