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NO. 105. AN ACT RELATING TO THE LIABILITY OF MORTGAGEES FOR FAILURE TO PROVIDE PAYOFF STATEMENTS AND DISCHARGE MORTGAGES .

(H.815)

It is hereby enacted by the General Assembly of the State of Vermont:

Sec. 1. 27 V.S.A. § 464 is amended to read:

§ 464. LIABILITY OF MORTGAGEE FOR FAILURE TO PROVIDE

PAYOFF STATEMENTS AND REFUSAL TO DISCHARGE

*[After performance of the condition, either before or after the breach thereof, if a mortgagee, assignee or the executor or administrator of either, fails to execute a discharge mentioned in sections 461-463 of this title within ten days after being requested to do so and after a tender of his reasonable charges, or to make, execute and acknowledge a deed of release of the mortgage, he shall be liable for damages occasioned thereby to be recovered in an action on this statute. Such mortgagor, his heirs, executors, administrators or assigns may have such further relief in a superior court as is just.]*

(a) Within five business days after the mortgagee’s receipt of a written request for a statement of the amount of funds or other obligations required to satisfy a note or other obligation secured by a mortgage, the mortgagee shall provide a written payoff statement to the mortgagor. The mortgagee shall not impose a fee or other charge for providing the payoff statement, unless the request specifically asks for expedited service. A request for a payoff statement shall include the name of the mortgagor, the loan number assigned to the loan, and the address of the property securing the loan. If a written payoff statement is not deposited in the U.S. mail, delivered to a courier service, sent by facsimile, or sent by other method of service customarily used for delivery of messages, within five business days after receiving the request, the holder and any servicer shall be jointly and severally liable to any aggrieved party in a civil action for statutory damages equal to $25.00 per day after the expiration of the five business days, up to an aggregate maximum of $5,000.00 for all aggrieved parties; provided, however, any servicer not authorized to issue a payoff statement shall not be liable as set forth herein.

(b) Within 30 days after full performance of the conditions of the mortgage, the mortgagee of record shall execute and deliver a valid and complete discharge as provided in sections 461-463 of this title, together with any instrument necessary to establish the mortgagee’s record ownership of the mortgage and to establish the authority to execute the discharge. As used in this section, the term “mortgagee” shall mean both the holder of the mortgage at the time it is satisfied and any servicer who receives the final payment satisfying the debt. If a discharge is not executed and delivered within 30 days, the holder and any servicer shall be jointly and severally liable to any aggrieved party in a civil action for statutory damages equal to $25.00 per day after the expiration of the 30 days, up to an aggregate maximum of $5,000.00 for all aggrieved parties; provided, however, any servicer not authorized to execute such discharge shall not be liable as set forth in this subsection. With respect to a mortgagee securing an open-end line of credit, the 30-day period to deliver a discharge commences after the mortgagor delivers to the address designated for payments under the line of credit a written request to terminate the line of credit and mortgage, together with payment in full of all amounts secured by the mortgage.

(c) The aggrieved party may file an action under subsection (a) or (b) of this section in superior court or, if the action is for monetary damages only and if the ad damnum requested is equal to or less than the maximum jurisdiction of a small claims proceeding, the complaint may be filed as a small claims action.

(d) In addition to any statutory damages, the mortgagee shall also be liable for consequential damages, punitive damages, court costs and reasonable attorney’s fees to any aggrieved party who substantially prevails in an action under this section. An aggrieved party may file an action to recover such damages, costs and fees in superior court. The court shall equitably allocate punitive damages among multiple aggrieved parties and may grant such other relief as the court deems appropriate.

Sec. 2. EFFECTIVE DATE

This act shall apply to all requests for payoffs and mortgage discharges received on or after October 1, 2000.

Approved: May 4, 2000