By Pitts H.B. No. 1144 A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to title insurance company affidavits as releases of 1-3 certain liens; providing penalties. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. Chapter 12, Property Code, is amended by adding 1-6 Section 12.017 to read as follows: 1-7 Sec. 12.017. TITLE INSURANCE COMPANY AFFIDAVIT AS RELEASE OF 1-8 LIEN; CIVIL PENALTY. (a) In this section: 1-9 (1) "Mortgage" means a deed of trust or other contract 1-10 lien on an interest in real property. 1-11 (2) "Mortgagee" means: 1-12 (A) the grantee of a mortgage; 1-13 (B) if a mortgage has been assigned of record, 1-14 the last person to whom the mortgage has been assigned of record; 1-15 or 1-16 (C) if a mortgage is serviced by a mortgage 1-17 servicer, the mortgage servicer. 1-18 (3) "Mortgage servicer" means the last person to whom 1-19 a mortgagor has been instructed by a mortgagee to send payments for 1-20 the loan secured by a mortgage. A person transmitting a payoff 1-21 statement is considered the mortgage servicer for the mortgage 1-22 described in the payoff statement. 1-23 (4) "Mortgagor" means the grantor of a mortgage. 1-24 (5) "Payoff statement" means a statement of the amount 2-1 of: 2-2 (A) the unpaid balance of a loan secured by a 2-3 mortgage, including principal, interest, and other charges properly 2-4 assessed under the loan documentation of the mortgage; and 2-5 (B) interest on a per diem basis for the unpaid 2-6 balance. 2-7 (6) "Title insurance company" means a corporation or 2-8 other business entity authorized and licensed to transact the 2-9 business of insuring titles to interests in real property in this 2-10 state. 2-11 (b) This section applies only to a mortgage on property 2-12 consisting exclusively of a one-to-four-family residence, including 2-13 a residential unit in a condominium regime. 2-14 (c) If a mortgagee fails to execute and deliver a release of 2-15 mortgage to the mortgagor or the mortgagor's designated agent 2-16 within 60 days after the date of receipt of payment of the mortgage 2-17 by the mortgagee in accordance with a payoff statement furnished by 2-18 the mortgagee or its mortgage servicer, an authorized officer of a 2-19 title insurance company may, on behalf of the mortgagor or a 2-20 transferee of the mortgagor who acquired title to the property 2-21 described in the mortgage, execute an affidavit that complies with 2-22 the requirements of this section and record the affidavit in the 2-23 real property records of each county in which the mortgage was 2-24 recorded. 2-25 (d) An affidavit executed under this section must state 2-26 that: 2-27 (1) the affiant is an authorized officer of a title 3-1 insurance company; 3-2 (2) the affidavit is made on behalf of the mortgagor 3-3 or a transferee of the mortgagor who acquired title to the property 3-4 described in the mortgage; 3-5 (3) the mortgagee provided a payoff statement with 3-6 respect to the loan secured by the mortgage; 3-7 (4) the affiant has ascertained that the mortgagee has 3-8 received payment of the loan secured by the mortgage in accordance 3-9 with the payoff statement, as evidenced by: 3-10 (A) a bank check, certified check, escrow 3-11 account check from the title company or title insurance agent, or 3-12 attorney trust account check that has been negotiated by the 3-13 mortgagee; or 3-14 (B) another documentary evidence of the receipt 3-15 of payment by the mortgagee; 3-16 (5) more than 60 days have elapsed since the date 3-17 payment was received by the mortgagee; 3-18 (6) the title insurance company or its agent has given 3-19 the mortgagee at least 15 days' notice in writing of its intention 3-20 to execute and record an affidavit in accordance with this section, 3-21 with a copy of the proposed affidavit attached to the written 3-22 notice; and 3-23 (7) the mortgagee has not responded in writing to the 3-24 notification, or a request for additional payment made by the 3-25 mortgagee has been complied with at least 15 days before the date 3-26 of the affidavit. 3-27 (e) The affidavit must include the names of the mortgagor 4-1 and the mortgagee, the date of the mortgage, and the volume and 4-2 page or clerk's file number of the real property records where the 4-3 mortgage is recorded, together with similar information for a 4-4 recorded assignment of the mortgage. 4-5 (f) The affiant must attach to the affidavit a photostatic 4-6 copy, certified as a true copy of the original document, of: 4-7 (1) the documentary evidence that payment has been 4-8 received by the mortgagee, including the mortgagee's endorsement of 4-9 a negotiated check if paid by check; and 4-10 (2) the payoff statement. 4-11 (g) An affidavit that is executed and recorded as provided 4-12 by this section operates as a release of the mortgage described in 4-13 the affidavit. 4-14 (h) The county clerk shall index the affidavit in the names 4-15 of the original mortgagee and the last assignee of the mortgage 4-16 appearing of record as the grantors and in the name of the 4-17 mortgagor as grantee. 4-18 (i) A person who knowingly causes an affidavit with false 4-19 information to be executed and recorded under this section is 4-20 liable for the penalties for filing a false affidavit, including 4-21 the penalties for commission of offenses under Section 37.02 of the 4-22 Penal Code, and to a party injured by the affidavit for actual 4-23 damages or $5,000, whichever is greater. The attorney general may 4-24 sue to collect the penalty. If the attorney general or an injured 4-25 party bringing suit substantially prevails in an action under this 4-26 subsection, the court may award reasonable attorney's fees and 4-27 court costs to the prevailing party. 5-1 SECTION 2. The importance of this legislation and the 5-2 crowded condition of the calendars in both houses create an 5-3 emergency and an imperative public necessity that the 5-4 constitutional rule requiring bills to be read on three several 5-5 days in each house be suspended, and this rule is hereby suspended, 5-6 and that this Act take effect and be in force from and after its 5-7 passage, and it is so enacted.