Bill Text: AZ HB2323 | 2012 | Fiftieth Legislature 2nd Regular | Chaptered
Bill Title: Home equity credit line; release
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2012-04-04 - Governor Signed [HB2323 Detail]
Download: Arizona-2012-HB2323-Chaptered.html
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Senate Engrossed House Bill |
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State of Arizona House of Representatives Fiftieth Legislature Second Regular Session 2012
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CHAPTER 175
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HOUSE BILL 2323 |
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AN ACT
amending title 33, chapter 4, article 2, Arizona Revised Statutes, by adding section 33-420.01; amending section 33-715, Arizona Revised Statutes; relating to real property security interest payoffs.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Title 33, chapter 4, article 2, Arizona Revised Statutes, is amended by adding section 33-420.01, to read:
33-420.01. Suspension of line of credit; payoff demand statement; definitions
A. A secured lender under a revolving line of credit against real property shall suspend the revolving line of credit for a minimum of forty‑five days on receipt of a request for a payoff demand statement as defined in section 33-715 from an escrow agent who is licensed pursuant to title 6, chapter 7.
B. This section shall not be construed to validate, invalidate or otherwise affect the foreclosure of a mortgage, the exercise of a trustee's power of sale or the exercise of a seller's right to a forfeiture under an agreement for sale of real property.
C. For the purposes of this section:
1. "revolving line of credit" means an open end revolving loan that is established pursuant to a written agreement between a borrower and a lender in which the lender agrees to lend the borrower money on a continuing basis for as long as the outstanding principal amount owed by the borrower does not exceed a specified amount.
2. "Secured lender" means any one of the following:
(a) A mortgagee on a mortgage.
(b) A beneficiary on a deed of trust.
(c) A person who holds or retains legal title to real property as security for financing the purchase of the real property under an agreement for sale of real property.
(d) A person who holds or retains a security interest in real property to SECURE the repayment of a loan.
(e) The authorized agent of those listed in this paragraph.
3. "Suspend" means to forbid the borrower from increasing or incurring any additional debt on the revolving line of credit.
Sec. 2. Section 33-715, Arizona Revised Statutes, is amended to read:
33-715. Payoff demands; definitions
A. On the written demand of an entitled person or that person's authorized agent, a beneficiary or the beneficiary's authorized agent secured lender shall prepare and deliver a payoff demand statement to the person who has requested it within fourteen days after receipt of the demand. Any written demand for a payoff demand statement prescribed in section 33‑420.01 shall include a statement that the entitled person is acting as an agent of the borrower and that the line of credit is to be suspended.
B. The payoff demand statement shall provide the amounts required as of the date of preparation, and shall include the information reasonably necessary to calculate the payoff amount on a per diem basis for the time that the per diem amount remains unchanged as provided in the note but not to exceed a period of at least thirty days and include the following information:
1. The name and address of the person who or department that is to receive the payoff payment.
2. The name and address of the person who or department that is to receive the request to close the debt, line of credit or other obligation to pay.
3. The name and address of the person who or department that is to receive the request for release of lien.
C. The entitled person or that person's authorized agent may rely on a payoff demand statement for the purpose of establishing the amount necessary to pay the obligation in full and obtain a release of the mortgage or deed of trust that secures the obligation through and including the time set forth in the payoff demand statement as provided in subsection I, paragraph 5. the entitled person must submit the payoff funds, instructions to close the revolving line of credit and request for release of lien to the secured lender as directed by the secured lender on the payoff demand statement prepared in CONJUNCTION with subsection b of this section.
D. The entitled person or that person's authorized agent may rely on an amended payoff demand statement if the beneficiary secured lender delivers that amended payoff demand statement to the entitled person or that person's authorized agent before the earlier of:
1. The transfer of title to the mortgaged or trust property or any portion of the property.
2. The recordation of a mortgage or deed of trust describing the mortgaged or trust property or any portion of the property.
E. For notes created or renegotiated after the effective date of this section August 22, 2002, any sums that were due the beneficiary secured lender and that were not included in the payoff demand statement or in any amended statement constitute an unsecured obligation of the obligor pursuant to the terms of the note and are recoverable by the beneficiary secured lender pursuant to the terms of the note and as otherwise provided by law.
F. A beneficiary secured lender who willfully fails to prepare and deliver a payoff demand statement for fourteen or more days after receipt of a written demand is liable to the entitled person for all damages sustained for failure to deliver the statement. The beneficiary secured lender is also liable to the entitled person for five hundred dollars whether or not actual damages are sustained. Each failure of the beneficiary secured lender to prepare and deliver the payoff demand statement when required to do so pursuant to this section constitutes a separate cause of action. A judgment that awards an entitled person a forfeiture or damages, or both, for any failure to prepare and deliver a payoff demand statement bars recovery of any other damages or forfeiture for any other failure to prepare and deliver a statement with respect to the same obligation, if the other demand for the statement was made within six months before or after the demand was made that resulted in the award. For the purposes of this subsection, "willfully" means a failure to comply with this section without just cause or excuse.
G. If the beneficiary secured lender has more than one branch, office or other place of business, the payoff statement demand shall be made to the branch or office address provided in the payment billing notice or payment book. Unless the payoff demand statement provides otherwise, the statement is deemed to apply only to the unpaid balance of the single obligation that is named in the demand and that is secured by the mortgage or deed of trust that is payable at the address that is provided in the payment billing notice or payment book.
H. The demand for and preparation and delivery of a payoff demand statement pursuant to this section does not change any date or time period that is prescribed in the note or that is otherwise provided by law.
I. The beneficiary of a mortgagee secured lender may assess a fee of no more than thirty dollars for furnishing each payoff demand statement. This is conclusively presumed to be reasonable.
J. For the purposes of this section, unless the context otherwise requires:
1. "Beneficiary" means a mortgagee or beneficiary of a mortgage or deed of trust or an assignee of a mortgagee or beneficiary.
2. 1. "Deliver" or "delivery" means depositing or causing to be deposited into the United States mail an envelope with postage prepaid that contains a copy of the documents to be delivered and that is addressed to the person whose name and address are provided in the payoff demand. Delivery includes transmitting those documents by telefacsimile machine to the person. Delivery includes transmitting those documents electronically pursuant to title 44, chapter 26 if the payoff demand specifically requests and authorizes that the documents be transmitted in electronic form.
3. 2. "Entitled person" means the trustor or mortgagor of the mortgaged or trust property or any part of that property, any successor in interest to the trustor or mortgagor, any person with a lien or encumbrance of record on the mortgaged or trust property and an escrow agent that is licensed pursuant to title 6.
4. 3. "Payoff demand" means a written demand for a payoff demand statement made by an entitled person or that person's authorized agent.
5. 4. "Payoff demand statement" means a written statement that is prepared in response to a written demand made by an entitled person or that person's authorized agent that sets forth the amounts required by the beneficiary secured lender to fully satisfy all of the obligations secured by the loan that is the subject of the demand.
5. "Secured lender" has the same meaning prescribed in section 33‑420.01.
APPROVED BY THE GOVERNOR APRIL 4, 2012.
FILED IN THE OFFICE OF THE SECRETARY OF STATE APRIL 4, 2012.
