Nationwide Title Clearing recently determined that the deadline for submitting release of mortgage within the state of Louisiana should be 45 days after payoff, not 60 days, which was the period typically used in the past. NTC has recently reviewed the Louisiana revised statute §5165 regarding how long one has to record lien releases after the date of payoff.
In Section B(4), the Louisiana statute states: "(4) The mortgagee shall issue within forty-five days after receipt from the mortgagor or settlement agent of a written request for cancellation of the mortgage accompanied by the fees required by Paragraph (5) of this Subsection, the act of release along with a request for cancellation that complies with Civil Code Article 3366."
Further, Section D of the statute provides: "D. In the event either the mortgagee or settlement agent has failed to comply with the requirements of this Section, the mortgagee and settlement agent shall be provided with written notice of noncompliance identifying the mortgage at issue and the explanation of how they failed to comply with the requirements of this Section, and then the mortgagee and settlement agent shall be given an opportunity to prepare and submit an act of release of mortgage and request for cancellation to the appropriate recorder of mortgages within fifteen days of receiving the notice before any rights accrue pursuant to Subsection E of this Section."
According to these provisions, a written act of release of mortgage must be issued within 45 days after the payoff date. If there is no such issuance within those 45 days, the mortgagee or settlement agent still has an additional 15 days to prepare and record an act of release of mortgage. However, the extra 15 days are available only after the mortgagee has “failed” to comply with the initial statutory requirement. We do not believe our processes should ever result in one of our clients having “failed” to comply with a statutory requirement, even if another two weeks will pass before any penalty will apply.
Thus, although the sum of these two provisions seems to allow 60 days, Nationwide Title Clearing will apply the 45-day requirement to lien release documents recorded in Louisiana to ensure that all work is completed without going out of compliance.
Myron Finley
Chief Legal Officer
Nationwide Title Clearing
To learn more about Nationwide Title Clearing's services, click the below link to download the lien release whitepaper.
