H.B. No. 1144
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.