MISSISSIPPI LEGISLATURE

1999 Regular Session

To: Business and Financial Institutions; Judiciary

By: Senator(s) Posey

AN ACT TO AMEND SECTION 89-1-49, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT MORTGAGES AND DEEDS OF TRUST THAT SECURE LINES OF CREDIT SHALL NOT BE EXTINGUISHED UPON PAYMENT OF THE MONEY OWED; TO AMEND SECTION 89-5-21, MISSISSIPPI CODE OF 1972, TO SPECIFY WHEN SATISFACTION OF MORTGAGES OR DEEDS OF TRUST THAT SECURE LINES OF CREDIT SHALL BE ENTERED UPON THE RECORD; TO SPECIFY WHEN EXTINGUISHMENT OF MORTGAGES AND DEEDS OF TRUST THAT SECURE LINES OF CREDIT SHALL OCCUR; AND FOR RELATED PURPOSES.

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

SECTION 1. Section 89-1-49, Mississippi Code of 1972, is amended as follows:

89-1-49. (1) Except as provided in subsections (2) and (3) of this section, payment of the money secured by any mortgage or deed of trust shall extinguish it, and revest the title in the mortgagor as effectually as if reconveyed.

(2) This section shall have no application to security agreements executed under the Mississippi Uniform Commercial Code nor to security interests created by such security agreements.

(3) This section shall not apply to a mortgage or deed of trust which states on its face that it secures a line of credit * * *. * * * Mortgages or deeds of trust not covered by this section shall be extinguished as provided in subsection (2) of Section 89-5-21. As used in this section, the term "line of credit" means any loan, extension of credit or financing arrangement where the lender has agreed to make additional or future advances.

SECTION 2. Section 89-5-21, Mississippi Code of 1972, is amended as follows:

89-5-21. (1) Except as otherwise provided in this section, any mortgagee or cestui que trust, or assignee of any mortgagee or cestui que trust, of real or personal estate, having received full payment of the money due by the mortgage or deed of trust, shall enter satisfaction upon the margin of the record of the mortgage or deed of trust, which entry shall be attested by the clerk of the chancery court and discharge and release the same, and shall bar all actions or suits brought thereon, and the title shall thereby revest in the grantor.

(2) With respect to a mortgage or deed of trust which states on its face that it secures a line of credit, * * * satisfaction of record shall be accomplished as set forth in subsection (3) of this section, and extinguishment shall occur as provided in subsection (4) of this section.

(3) A mortgagee or cestui que trust, or the assignee of a mortgagee or cestui que trust, under a mortgage or deed of trust described in subsection (2) of this section, shall, upon:

(a) The termination or maturity of the line of credit and the payment of all sums owing in connection with the line of credit, or

(b) The payment of all sums owing in connection with the line of credit and the written request by the debtor to cancel the line of credit and mortgage or deed of trust securing the line of credit, enter satisfaction of the mortgage or deed of trust in the same manner as with other mortgages or deeds of trust.

(4) Upon the occurrence of either paragraph (a) or (b) of subsection (3) of this section, a mortgage or deed of trust described in subsection (2) of this section shall be extinguished and title shall revest in the mortgagor as effectually as if reconveyed.

(5) Any such mortgagee or cestui que trust, or such assignee, by himself or his attorney, who does not, after payment of all sums owed, within one (1) month after written request, cancel on the record the mortgage or deed of trust shall forfeit the sum of Two Hundred Dollars ($200.00), which can be recovered by suit on part of the party aggrieved, and if after request, he fails or refuses to make such acknowledgment of satisfaction, the person so neglecting or refusing shall forfeit and pay to the party aggrieved any sum not exceeding the mortgage money, to be recovered by action; but such entry of satisfaction may be made by anyone authorized to do it by the written authorization of the mortgagee or beneficiary, duly acknowledged and recorded, and shall have the same effect as if done by the mortgagee or beneficiary.

(6) As used in this section, the term "line of credit" means any loan, extension of credit or financing arrangement where the lender has agreed to make additional or future advances.

SECTION 3. This act shall take effect and be in force from and after its passage.