Louisiana Amends Provisions Regarding Cancellation of Mortgages
The state of Louisiana has passed HB 400 which amends provisions relating to the cancellation of mortgages and adds provisions relating to the partial cancellation of mortgages. These amendments include changes to the model form for cancellation of mortgages and the addition of a model form for the partial cancellation of mortgages. The provisions of HB 400 take effect August 1, 2017.
HB 400 amends provisions in R.S. 9:5172 that allow for a method of cancellation or partial cancellation of a mortgage in lieu of compliance with R.S. 9:5169, 5170, and 5171 by allowing the attachment of a signed written act of a licensed financial institution to a request for cancellation or partial cancellation of a mortgage. The signed, written act of the financial institution must be represented by one of its officers, duly executed or acknowledged before a notary public, or may take such other form that is self-proving under the Code of Evidence Article 902(1), (2), (3), or (8). Alternatively, a signed act by two authorized officers of the financial institution along with a declaration that the obligee is a licensed financial institution as defined in Subsection C of R.S. 9:5172 shall also be allowed so long as the following requirements are met by the institution: The financial institution must have been the obligee or agent of the obligee at the time the obligation was extinguished and the obligation must have been paid, satisfied, or extinguished; the financial institution releases the mortgage and directs the recorder to cancel its recordation, or; in the event of a partial release, the financial institution partially releases the mortgage and directs the recorder to partially cancel its recording.
In addition, Amended R.S. 9:5172 contains revisions to the model form for the cancellation of mortgages and adds a model form for the partial cancellation of mortgages; the new model forms are contained within the text of amended R.S. 9:5173.1. A financial institution may use the model forms and the recorder of mortgages shall accept the model forms as compliant with the requirements of the statute. The model forms are not, however, the only forms that may be used and any form that meets the requirements of R.S. 9:5172 may be filed to effect the cancellation or partial cancellation of a mortgage.
The full text of HB 400 may be found at https://legiscan.com/LA/text/HB400/2017 and contains the amended model form for the cancellation of a mortgage and the new model form for the partial cancellation of a mortgage.
Adam Faria, JD, is a regulatory compliance consultant with CLA. He is a graduate of Northeastern University and earned his juris doctor at Suffolk University Law School. He is admitted to the bar in Massachusetts and New Hampshire.
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