Massachusetts - SB2278

Massachusetts Considering Legislation to Address Mortgage Discharge Issues

The Massachusetts legislature is considering Senate Bill 2278 to address certain mortgage discharge issues. Senate Bill 2278 was introduced on November 14, 2005.  The proposed law addresses the means by which mortgages are to be discharged, the effect of recording a discharge, requirements relating to payoff statements, timing requirements for effectuation of discharge, and disclosure requirements.

The proposed law also provides penalties for various compliance failures in connection with the mortgage discharge process. In particular, the proposed law provides:

·A mortgagor is entitled to recover an amount equal to the greater of $500 or the mortgagor's actual damages plus reasonable attorneys fees and costs from the mortgagee, mortgage servicer or note holder who fails to provide a written payoff statement to the mortgagor to enable the mortgagor to make full payment of the debt within 30 days from the date of the request.

·A mortgagor is entitled to recover an amount equal to the greater of $2500 or the mortgagor's actual damages together with reasonable attorneys fees and costs from the mortgagee, mortgage servicer, or note holder who has accepted full payment and satisfaction of a mortgage in accordance with the payoff statement and fails to record or provide to the closing attorney or settlement agent a duly executed and acknowledged discharge with 45 days of acceptance.

·A mortgagor is entitled to recover an amount equal to the greater of $2500 or the mortgagor's actual damages together with reasonable attorney fees and costs from a closing attorney or settlement agent who has received a discharge of a mortgage and fails to record the discharge within 45 days of the receipt.

·A mortgagor is entitled to recover an amount equal to the greater of the amount of fees charged to or withheld from the mortgagor with interest plus $2500 or the mortgagor's actual damages together with reasonable attorneys fees and costs from the mortgagee, mortgage servicer or note holder who has withheld the recording fee for the discharge from the mortgagor's account and failed to record the discharge within 30 days after receipt of a written demand with respect to any mortgage on one-to-four family residential property.

The bill is attached.