Nebraska Modifies Provisions Regarding Real Property
The state of Nebraska modified its provisions relating to real property and the recording of instruments and the rights and duties of secured creditors with respect to the Residential Mortgage Licensing Act. These provisions are effective on July 17, 2018.
Section 1 of the amendment provides that a “licensee licensed as a mortgage banker shall record or cause to be recorded a release of mortgage or in the case of a trust deed, record or cause to be recorded a reconveyance.” Section 2 provides that “the transfer of any debt secured by a mortgage shall also operate as a transfer of the security of such debt.”
Section 3 provides that “Section 76-2803 shall govern a mortgagee’s obligation to record or cause to be recorded a release of mortgage and the liability of the mortgagee for failure to timely record or cause to be recorded a release of mortgage.”
Section 4 also provides that the “beneficiary’s obligation to record or cause to be recorded a deed of reconveyance and the liability of the beneficiary for failure to timely record or cause to be recorded a deed of reconveyance shall be governed by Section 76-2803.”
Section 5 provides that a secured creditor “shall record or cause to be recorded, a deed of reconveyance or a release satisfaction of a mortgage or other security instrument, as applicable, in the real property records of each county in which the trust deed, mortgage, or other security instrument is recorded after receiving a full payment or performance of the secured obligation and a written request by the trustor, mortgagor, or grantor, or the trustor’s, mortgagor’s, or grantor’s successor in interest or designated representative or by the holder of a junior trust deed, junior mortgage, or other junior security interest.”
Section 5 also provides that “a secured creditor who fails to record a deed of reconveyance or a release or satisfaction of mortgage or other security instrument within sixty days after receiving full payment or performance of the secured obligation and receiving a written request will be liable to the trustor, mortgagor, or grantor, or the successor in interest of such trustor, mortgagor, or grantor, if such written request was made by such trustor, mortgagor, or grantor, or a designated representative of such trustor, mortgagor, or grantor, for the greater of five thousand dollars or actual damages caused by such failure, plus reasonable attorney’s fees and costs.”
“The secured creditor shall also be liable to the a successor in interest of the trustor, mortgagor, or grantor or of a landowner, purchaser, or holder of a junior trust deed, junior mortgage, or other junior security interest, as if such written request was made by such successor in interest of the trustor, mortgagor, or grantor, or by such landowner, purchaser, or holder of a junior trust deed, junior mortgage, or other junior security interest, for actual damages caused by such failure plus reasonable attorney’s fees and costs.”
“The court may further order the trustee to reconvey the property or the mortgagee or grantee to record a release or satisfaction of the mortgage or other security instrument. This subsection does not apply if the secured creditor received full payment or performance before the effective date of this act.”
Section 5 further states that “a beneficiary under a deed of trust shall not be liable if the beneficiary established a reasonable procedure to achieve compliance with its obligations, complied with the procedure in good faith and was unable to comply with its obligations due to circumstances beyond its control.”
The amendment additionally provides that “a beneficiary shall also not be liable if the beneficiary delivered to the trustee under such deed of trust a written request to execute a deed of reconveyance and the trustee failed to execute such deed of reconveyance, provided that the beneficiary delivered such request within the time provided herein for recording of a deed of reconveyance and the beneficiary subsequently appointed a successor trustee who executed and recorded or caused to be recorded a deed of reconveyance within a reasonable time thereafter.”
The amendment also provides under Section 5 that “a successor in interest of a trustor, mortgagor, or grantor shall include the current owner of the real property and the person issuing a payoff check in accordance with the terms of a payoff letter from a beneficiary or mortgagee.”
Rhona Kyeyune, LLM, is a regulatory compliance consultant with CLA. She is a graduate of Makerere University and earned her master of laws at Boston University School of Law.
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