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Bill 351

Indicates Matter Stricken

Indicates New Matter

RECALLED

April 8, 1999

S. 351

Introduced by Senators McConnell, Matthews, Courtney, Patterson, Reese, Hayes, Jackson and Passailaigue

S. Printed 4/8/99--S.

Read the first time January 19, 1999.

TO AMEND SECTION 29-3-325, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO RECORDING SATISFACTION OR CANCELLATION OF A MORTGAGE, SO AS TO DELETE CERTAIN PROVISIONS AND PROVIDE, THAT UPON PAYMENT IN FULL OF A MORTGAGE DEBT, WRITTEN REQUEST FOR SATISFACTION OF THE MORTGAGE, AND PAYMENT OF ANY REQUIRED SATISFACTION FEE, THE HOLDER OF RECORD OF THE MORTGAGE IS RESPONSIBLE FOR RECORDING THE SATISFACTION OR CANCELLATION OF THE MORTGAGE IT HOLDS AND TO FURTHER PROVIDE FOR THE DAMAGES AND PENALTIES FOR FAILURE TO SO SATISFY THE MORTGAGE; AND TO REPEAL SECTION 29-3-320, RELATING TO LIABILITY FOR FAILURE TO ENTER SATISFACTION OF A MORTGAGE.

Be it enacted by the General Assembly of the State of South Carolina:

SECTION 1. Section 29-3-325 of the 1976 Code, as added by Act 452 of 1992, is amended to read:

"Section 29-3-325. When no written instructions to the contrary are given by the mortgagor or a closing agent, acting on behalf of the mortgagor, to the mortgagee or to an assignee of the mortgage, and when the mortgagee or assignee of the mortgage is a financial institution, Upon payment in full of a mortgage debt, written request for satisfaction of the mortgage, and payment of any required satisfaction fee, the mortgagee or assignee holder of record of the mortgage is responsible for recording the satisfaction or cancellation of the mortgage it holds. Notwithstanding any limitations under Sections 37-2-202 and 37-3-202, The the financial institution holder of record of the mortgage may charge a reasonable fee at the time of the satisfaction not to exceed twenty-five dollars to cover the cost of processing and recording the satisfaction or cancellation. If the mortgagor instructs the holder of record of the mortgage that the mortgagor will be responsible for filing the satisfaction, the holder of the mortgage may mail or deliver the satisfied mortgage to the mortgagor, with no satisfaction fee charged.

If the financial institution holder of record of the mortgage fails to record the satisfaction or cancellation, or fails to send the satisfaction or cancellation to the mortgagor if so instructed, within ninety days of receipt of (1) the full amount necessary to satisfy the debt or obligation secured by the mortgage, (2) a written request to satisfy the mortgage, and (3) payment of up to the above-described fee, if applicable, it must pay to the mortgagor upon demand a penalty in the amount of one five hundred dollars or in the alternative the mortgagor is entitled to the remedies provided by Sections 29-3-310 and 29-3-320 if these sections apply. However, a violation of this section is not considered to be a violation of Sections 29-3-310 and 29-3-320. Failure to pay this one five hundred dollar penalty within ten days after demand subjects the financial institution holder of record of the mortgage to additional penalties of one five hundred dollars for each ten days or portion thereof the penalty remains unpaid after receipt of demand not to exceed a total penalty of six thousand dollars per mortgage transaction, plus actual damages as awarded, and reasonable attorney's fees and costs. In determining attorney's fees, the amount of the recovery on behalf of the debtor is not controlling.

A holder of record of the mortgage may not be held liable in any action brought under this section if the holder of record of the mortgage shows by a preponderance of the evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adopted to avoid any error.

The provisions of this section do not apply to 'open-end credit' plans as defined by federal law, or to mortgages containing future advance clauses even though they secure closed-end transactions."

SECTION 2. Section 29-3-320 of the 1976 Code is repealed.

SECTION 3. This act takes effect upon approval by the Governor.

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