1-1 By: Pitts (Senate Sponsor - Harris of Tarrant) H.B. No. 1144
1-2 (In the Senate - Received from the House April 19, 1993;
1-3 April 19, 1993, read first time and referred to Committee on
1-4 Economic Development; May 19, 1993, reported favorably by the
1-5 following vote: Yeas 8, Nays 0; May 19, 1993, sent to printer.)
1-6 COMMITTEE VOTE
1-7 Yea Nay PNV Absent
1-8 Parker x
1-9 Lucio x
1-10 Ellis x
1-11 Haley x
1-12 Harris of Dallas x
1-13 Harris of Tarrant x
1-14 Leedom x
1-15 Madla x
1-16 Rosson x
1-17 Shapiro x
1-18 Wentworth x
1-19 A BILL TO BE ENTITLED
1-20 AN ACT
1-21 relating to title insurance company affidavits as releases of
1-22 certain liens; providing penalties.
1-23 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-24 SECTION 1. Chapter 12, Property Code, is amended by adding
1-25 Section 12.017 to read as follows:
1-26 Sec. 12.017. TITLE INSURANCE COMPANY AFFIDAVIT AS RELEASE OF
1-27 LIEN; CIVIL PENALTY. (a) In this section:
1-28 (1) "Mortgage" means a deed of trust or other contract
1-29 lien on an interest in real property.
1-30 (2) "Mortgagee" means:
1-31 (A) the grantee of a mortgage;
1-32 (B) if a mortgage has been assigned of record,
1-33 the last person to whom the mortgage has been assigned of record;
1-34 or
1-35 (C) if a mortgage is serviced by a mortgage
1-36 servicer, the mortgage servicer.
1-37 (3) "Mortgage servicer" means the last person to whom
1-38 a mortgagor has been instructed by a mortgagee to send payments for
1-39 the loan secured by a mortgage. A person transmitting a payoff
1-40 statement is considered the mortgage servicer for the mortgage
1-41 described in the payoff statement.
1-42 (4) "Mortgagor" means the grantor of a mortgage.
1-43 (5) "Payoff statement" means a statement of the amount
1-44 of:
1-45 (A) the unpaid balance of a loan secured by a
1-46 mortgage, including principal, interest, and other charges properly
1-47 assessed under the loan documentation of the mortgage; and
1-48 (B) interest on a per diem basis for the unpaid
1-49 balance.
1-50 (6) "Title insurance company" means a corporation or
1-51 other business entity authorized and licensed to transact the
1-52 business of insuring titles to interests in real property in this
1-53 state.
1-54 (b) This section applies only to a mortgage on property
1-55 consisting exclusively of a one-to-four-family residence, including
1-56 a residential unit in a condominium regime.
1-57 (c) If a mortgagee fails to execute and deliver a release of
1-58 mortgage to the mortgagor or the mortgagor's designated agent
1-59 within 60 days after the date of receipt of payment of the mortgage
1-60 by the mortgagee in accordance with a payoff statement furnished by
1-61 the mortgagee or its mortgage servicer, an authorized officer of a
1-62 title insurance company may, on behalf of the mortgagor or a
1-63 transferee of the mortgagor who acquired title to the property
1-64 described in the mortgage, execute an affidavit that complies with
1-65 the requirements of this section and record the affidavit in the
1-66 real property records of each county in which the mortgage was
1-67 recorded.
1-68 (d) An affidavit executed under this section must state
2-1 that:
2-2 (1) the affiant is an authorized officer of a title
2-3 insurance company;
2-4 (2) the affidavit is made on behalf of the mortgagor
2-5 or a transferee of the mortgagor who acquired title to the property
2-6 described in the mortgage;
2-7 (3) the mortgagee provided a payoff statement with
2-8 respect to the loan secured by the mortgage;
2-9 (4) the affiant has ascertained that the mortgagee has
2-10 received payment of the loan secured by the mortgage in accordance
2-11 with the payoff statement, as evidenced by:
2-12 (A) a bank check, certified check, escrow
2-13 account check from the title company or title insurance agent, or
2-14 attorney trust account check that has been negotiated by the
2-15 mortgagee; or
2-16 (B) another documentary evidence of the receipt
2-17 of payment by the mortgagee;
2-18 (5) more than 60 days have elapsed since the date
2-19 payment was received by the mortgagee;
2-20 (6) the title insurance company or its agent has given
2-21 the mortgagee at least 15 days' notice in writing of its intention
2-22 to execute and record an affidavit in accordance with this section,
2-23 with a copy of the proposed affidavit attached to the written
2-24 notice; and
2-25 (7) the mortgagee has not responded in writing to the
2-26 notification, or a request for additional payment made by the
2-27 mortgagee has been complied with at least 15 days before the date
2-28 of the affidavit.
2-29 (e) The affidavit must include the names of the mortgagor
2-30 and the mortgagee, the date of the mortgage, and the volume and
2-31 page or clerk's file number of the real property records where the
2-32 mortgage is recorded, together with similar information for a
2-33 recorded assignment of the mortgage.
2-34 (f) The affiant must attach to the affidavit a photostatic
2-35 copy, certified as a true copy of the original document, of:
2-36 (1) the documentary evidence that payment has been
2-37 received by the mortgagee, including the mortgagee's endorsement of
2-38 a negotiated check if paid by check; and
2-39 (2) the payoff statement.
2-40 (g) An affidavit that is executed and recorded as provided
2-41 by this section operates as a release of the mortgage described in
2-42 the affidavit.
2-43 (h) The county clerk shall index the affidavit in the names
2-44 of the original mortgagee and the last assignee of the mortgage
2-45 appearing of record as the grantors and in the name of the
2-46 mortgagor as grantee.
2-47 (i) A person who knowingly causes an affidavit with false
2-48 information to be executed and recorded under this section is
2-49 liable for the penalties for filing a false affidavit, including
2-50 the penalties for commission of offenses under Section 37.02 of the
2-51 Penal Code, and to a party injured by the affidavit for actual
2-52 damages or $5,000, whichever is greater. The attorney general may
2-53 sue to collect the penalty. If the attorney general or an injured
2-54 party bringing suit substantially prevails in an action under this
2-55 subsection, the court may award reasonable attorney's fees and
2-56 court costs to the prevailing party.
2-57 SECTION 2. The importance of this legislation and the
2-58 crowded condition of the calendars in both houses create an
2-59 emergency and an imperative public necessity that the
2-60 constitutional rule requiring bills to be read on three several
2-61 days in each house be suspended, and this rule is hereby suspended,
2-62 and that this Act take effect and be in force from and after its
2-63 passage, and it is so enacted.
2-64 * * * * *
2-65 Austin,
2-66 Texas
2-67 May 19, 1993
2-68 Hon. Bob Bullock
2-69 President of the Senate
2-70 Sir:
3-1 We, your Committee on Economic Development to which was referred
3-2 H.B. No. 1144, have had the same under consideration, and I am
3-3 instructed to report it back to the Senate with the recommendation
3-4 that it do pass and be printed.
3-5 Parker,
3-6 Chairman
3-7 * * * * *
3-8 WITNESSES
3-9 FOR AGAINST ON
3-10 ___________________________________________________________________
3-11 Name: Jim Gosdin x
3-12 Representing: Stewart Title
3-13 City: Houston
3-14 -------------------------------------------------------------------
3-15 Name: Gayle Vickers x
3-16 Representing: Texas Bankers Assn.
3-17 City: Austin
3-18 -------------------------------------------------------------------
3-19 Name: Karen Neeley x
3-20 Representing: Ind. Bankers Assn. of Texas
3-21 City: Austin
3-22 -------------------------------------------------------------------
3-23 Name: Randy M. Lee x
3-24 Representing: Stewart Title
3-25 City: Austin
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