House Bill 860

AN ACT TO AMEND SECTION 89-5-21, MISSISSIPPI CODE OF 1972, TO INCREASE THE AMOUNT OF THE PENALTY ON A MORTGAGEE WHO, AFTER HAVING RECEIVED FULL PAYMENT OF THE MONEY DUE BY THE MORTGAGE, DOES NOT CANCEL THE MORTGAGE WITHIN ONE MONTH AFTER WRITTEN REQUEST TO DO SO BY THE DEBTOR; TO AMEND SECTION 75-9-625, MISSISSIPPI CODE OF 1972, TO INCREASE THE AMOUNT OF THE PENALTY ON A SECURED PARTY UNDER THE UNIFORM COMMERCIAL CODE WHO, AFTER THERE IS NO OBLIGATION SECURED BY THE COLLATERAL COVERED BY THE FINANCING STATEMENT, DOES NOT CAUSE A TERMINATION STATEMENT FOR THE FINANCING STATEMENT TO BE FILED WITHIN TWENTY DAYS AFTER DEMAND TO DO SO BY THE DEBTOR; TO BRING FORWARD SECTION 75-9-513, MISSISSIPPI CODE OF 1972, WHICH SETS OUT THE REQUIREMENTS AND PROCEDURES FOR THE FILING OF A TERMINATION STATEMENT, FOR THE PURPOSES OF AMENDMENT; AND FOR RELATED PURPOSES.

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

SECTION 1. Section 89-5-21, Mississippi Code of 1972, is amended as follows:

89-5-21. (1) Except as otherwise provided in subsections (3), (4) and (5) of 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) 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~~ by the debtor to cancel the mortgage or deed of trust, enter satisfaction on the record of the mortgage or deed of trust as required by subsection (1) of this section, shall forfeit and pay to the debtor the sum of Two Hundred Dollars ($200.00) per day, for each day after one (1) month after the debtor made the written request until the mortgagee, cestui que trust or assignee enters satisfaction on the record of the mortgage or deed of trust, which * * *~~can be~~ sum may be recovered by suit on part of the * * * debtor. The entry of satisfaction required by subsection (1) of this section 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.

(3) 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 and extinguishment shall occur as provided in subsection (5) of this section.

(4) 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.

(5) Any mortgagee or cestui que trust, or the assignee of a mortgagee or cestui que trust, under a mortgage or deed of trust securing a line of credit 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 a written request by the debtor to cancel the line of credit and the mortgage or deed of trust securing the line of credit, 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. Any such mortgagee, cestui que trust or assignee who does not, after payment of all sums owed in connection with the line of credit, within one (1) month after written request by the debtor to cancel the line of credit and the mortgage or deed of trust securing the line of credit, enter satisfaction on the record of the mortgage or deed of trust as required by this subsection, shall forfeit and pay to the debtor the sum of Two Hundred Dollars ($200.00) per day, for each day after one (1) month after the debtor made the written request until the mortgages, cestui que trust or assignee enters satisfaction on the record of the mortgage or deed of trust, which sum may be recovered by suit on part of the debtor. For the purpose of this subsection (5), the requirement of a written request by the debtor may be satisfied by a prospective creditor's delivery of a document, signed by the debtor, requesting cancellation of the line of credit and the mortgage or deed of trust securing the line of credit.

SECTION 2. Section 75-9-625, Mississippi Code of 1972, is amended as follows:

75-9-625. (a) If it is established that a secured party is not proceeding in accordance with this article, a court may order or restrain collection, enforcement, or disposition of collateral on appropriate terms and conditions.

(b) Subject to subsections (c), (d), * * * (f) and (h), a person is liable for damages in the amount of any loss caused by a failure to comply with this article. Loss caused by a failure to comply may include loss resulting from the debtor's inability to obtain, or increased costs of, alternative financing.

(1) A person that, at the time of the failure, was a debtor, was an obligor, or held a security interest in or other lien on the collateral may recover damages under subsection (b) for its loss; and

(2) If the collateral is consumer goods, a person that was a debtor or a secondary obligor at the time a secured party failed to comply with this part may recover for that failure in any event an amount not less than the credit service charge plus ten percent (10%) of the principal amount of the obligation or the time-price differential plus ten percent (10%) of the cash price.

(d) A debtor whose deficiency is eliminated under Section 75-9-626 may recover damages for the loss of any surplus. However, a debtor or secondary obligor whose deficiency is eliminated or reduced under Section 75-9-626 may not otherwise recover under subsection (b) for noncompliance with the provisions of this part relating to collection, enforcement, disposition, or acceptance.

(e) In addition to any damages recoverable under subsection (b), the debtor, consumer obligor, or person named as a debtor in a filed record, as applicable, may recover Five Hundred Dollars ($500.00) in each case from a person that:

(1) Fails to comply with Section 75-9-208;

(2) Fails to comply with Section 75-9-209;

(3) Files a record that the person is not entitled to file under Section 75-9-509(a) and fails to file a termination statement with respect to the filed record within ten (10) days after receiving an authenticated demand by the debtor, consumer obligor, or person named as a debtor in the filed record;

(4) * * * [Deleted]

(5) Fails to comply with Section 75-9-616(b)(1) and whose failure is part of a pattern, or consistent with a practice, of noncompliance; or

(6) Fails to comply with Section 75-9-616(b)(2).

(f) A debtor or consumer obligor may recover damages under subsection (b) and, in addition, Five Hundred Dollars ($500.00) in each case from a person that, without reasonable cause, fails to comply with a request under Section 75-9-210. A recipient of a request under Section 75-9-210 which never claimed an interest in the collateral or obligations that are the subject of a request under that section has a reasonable excuse for failure to comply with the request within the meaning of this subsection.

(g) If a secured party fails to comply with a request regarding a list of collateral or a statement of account under Section 75-9-210, the secured party may claim a security interest only as shown in the list or statement included in the request as against a person that is reasonably misled by the failure.

(h) In addition to any damages recoverable under subsection (b), the debtor may recover from a secured party that fails to cause the secured party of record to file or send a termination statement within twenty (20) days after the secured party receives an authenticated demand from the debtor, as required by Section 75-9-513(a), (b) or (c), the sum of Two Hundred Dollars ($200.00) per day, for each day after twenty (20) days after the debtor made the demand to the secured party until the secured party of record files or sends a termination statement.

SECTION 3. Section 75-9-513, Mississippi Code of 1972, is brought forward as follows:

75-9-513. Termination statement.

(a) A secured party shall cause the secured party of record for a financing statement to file a termination statement for the financing statement if the financing statement covers consumer goods and:

(1) There is no obligation secured by the collateral covered by the financing statement and no commitment to make an advance, incur an obligation, or otherwise give value; or

(2) The debtor did not authorize the filing of the initial financing statement.

(b) To comply with subsection (a), a secured party shall cause the secured party of record to file the termination statement:

(1) Within one (1) month after there is no obligation secured by the collateral covered by the financing statement and no commitment to make an advance, incur an obligation, or otherwise give value; or

(2) If earlier, within twenty (20) days after the secured party receives an authenticated demand from a debtor.

(c) In cases not governed by subsection (a), within twenty (20) days after a secured party receives an authenticated demand from a debtor, the secured party shall cause the secured party of record for a financing statement to send to the debtor a termination statement for the financing statement or file the termination statement in the filing office if:

(1) Except in the case of a financing statement covering accounts or chattel paper that has been sold or goods that are the subject of a consignment, there is no obligation secured by the collateral covered by the financing statement and no commitment to make an advance, incur an obligation, or otherwise give value;

(2) The financing statement covers accounts or chattel paper that has been sold but as to which the account debtor or other person obligated has discharged its obligation;

(3) The financing statement covers goods that were the subject of a consignment to the debtor but are not in the debtor's possession; or

(4) The debtor did not authorize the filing of the initial financing statement.

(d) Except as otherwise provided in Section 75-9-510, upon the filing of a termination statement with the filing office, the financing statement to which the termination statement relates ceases to be effective. Except as otherwise provided in Section 75-9-510, for purposes of Sections 75-9-519(g), 75-9-522(a) and 75-9-523(c), the filing with the filing office of a termination statement relating to a financing statement that indicates that the debtor is a transmitting utility also causes the effectiveness of the financing statement to lapse.

SECTION 4. This act shall take effect and be in force from and after July 1, 2014.