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79R2290 DWS-F
By: Orr H.B. No. 491
A BILL TO BE ENTITLED
AN ACT
relating to the Uniform Residential Mortgage Satisfaction Act.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Title 3, Property Code, is amended by adding
Chapter 15 to read as follows:
CHAPTER 15. UNIFORM RESIDENTIAL MORTGAGE SATISFACTION ACT
SUBCHAPTER A. DEFINITIONS AND GENERAL PROVISIONS
Sec. 15.001. SHORT TITLE. This chapter may be cited as the
Uniform Residential Mortgage Satisfaction Act.
Sec. 15.002. DEFINITIONS. In this chapter:
(1) "Address for giving a notification" means, for the
purpose of a particular type of notification, the most recent
address provided in a document by the intended recipient of the
notification to the person giving the notification, unless the
person giving the notification knows of a more accurate address, in
which case the term means that address.
(2) "Day" means calendar day.
(3) "Document" means information that is inscribed on
a tangible medium or that is stored in an electronic or other medium
and is retrievable in perceivable form.
(4) "Electronic" means relating to technology having
electrical, digital, magnetic, wireless, optical, electromagnetic,
or similar capabilities.
(5) "Entitled person" means a person liable for
payment or performance of the obligation secured by the real
property described in a security instrument, or the landowner.
(6) "Good faith" means honesty in fact and the
observance of reasonable commercial standards of fair dealing.
(7) "Landowner" means a person that, before
foreclosure, has the right of redemption in the real property
described in a security instrument, except that for the purposes of
this chapter, the purchaser under an executory contract for
conveyance is considered the landowner. The term does not include:
(A) a person that holds only a lien on the real
property; or
(B) the seller under an executory contract for
conveyance.
(8) "Notification" means a document containing
information required under this chapter and signed by the person
required to provide the information.
(9) "Payoff amount" means the sum necessary to satisfy
a secured obligation.
(10) "Payoff statement" means a document containing
the information specified in Section 15.051(d).
(11) "Person" means an individual, corporation,
business trust, estate, trust, partnership, limited liability
company, association, joint venture, public corporation,
government, or governmental subdivision, agency, or
instrumentality, or any other legal or commercial entity.
(12) "Recording data" means the date and the volume
and page number, film code number, or county clerk file number that
indicate where a document is recorded in the appropriate
governmental office under the law of this state.
(13) "Residential real property" means real property
located in this state that is used primarily for personal, family,
or household purposes, regardless of whether the property is
occupied by the owner or a tenant, and that is improved by one to
four dwelling units or is land that is zoned or otherwise restricted
by law, including restrictive covenants, for improvement by one to
four dwelling units. The term includes a residential unit in a
condominium regime.
(14) "Secured creditor" means a person that holds or
is the beneficiary of a security interest or that is authorized both
to receive payments on behalf of a person that holds a security
interest and to record a satisfaction of the security instrument
upon receiving full performance of the secured obligation. The
term includes the seller under an executory contract for
conveyance. The term does not include a trustee under a security
instrument.
(15) "Secured obligation" means an obligation the
payment or performance of which is secured by a security interest.
(16) "Security instrument" means an agreement,
however denominated, that creates or provides for an interest in
residential real property to secure payment or performance of an
obligation, whether or not it also creates or provides for a lien on
personal property. The term includes an executory contract for
conveyance.
(17) "Security interest" means an interest in
residential real property created by a security instrument. The
term includes the seller's interest under an executory contract for
conveyance.
(18) "Sign" means, with present intent to authenticate
or adopt a document:
(A) to execute or adopt a tangible symbol; or
(B) to attach to or logically associate with the
document an electronic sound, symbol, or process.
(19) "State" means a state of the United States, the
District of Columbia, Puerto Rico, the United States Virgin
Islands, or any territory or insular possession subject to the
jurisdiction of the United States.
(20) "Submit for recording" means to deliver, with
required fees and taxes, a document sufficient to be recorded under
this chapter to the appropriate governmental office under the law
of this state, except as provided by Section 15.053(e).
Sec. 15.003. NOTIFICATION: MANNER OF GIVING AND EFFECTIVE
DATE. (a) A person gives a notification by:
(1) depositing it with the United States Postal
Service with first-class postage paid or with a commercially
reasonable delivery service with cost of delivery provided,
properly addressed to the recipient's address for giving a
notification;
(2) sending it by facsimile transmission, electronic
mail, or other electronic transmission to the recipient's address
for giving a notification, but only if the recipient agreed to
receive notification in that manner; or
(3) causing it to be received at the address for giving
a notification within the time that it would have been received if
given pursuant to Subdivision (1).
(b) A notification is effective:
(1) the day after it is deposited with a commercially
reasonable delivery service for overnight delivery;
(2) three days after it is deposited with the United
States Postal Service, first-class mail with postage prepaid, or
with a commercially reasonable delivery service for delivery other
than by overnight delivery;
(3) the day it is given, if given pursuant to
Subsection (a)(2); or
(4) the day it is received, if given by a method other
than as provided in Subsection (a)(1) or (2).
Sec. 15.004. DOCUMENT OF RESCISSION: EFFECT; LIABILITY FOR
WRONGFUL RECORDING. (a) In this section, "document of rescission"
means a document stating that an identified satisfaction or
affidavit of satisfaction of a security instrument was recorded
erroneously, the secured obligation remains unsatisfied, and the
security instrument remains in force.
(b) If a person records a satisfaction or affidavit of
satisfaction of a security instrument in error, the person may
execute and record a document of rescission. Upon recording, the
document rescinds an erroneously recorded satisfaction or
affidavit.
(c) A recorded document of rescission has no effect on the
rights of a person that:
(1) acquired an interest in the real property
described in a security instrument after the recording of the
satisfaction or affidavit of satisfaction of the security
instrument and before the recording of the document of rescission;
and
(2) would otherwise have priority over or take free of
the lien created by the security instrument under the law of this
state.
(d) A person that erroneously or wrongfully records a
document of rescission is liable to any person injured thereby for
the actual damages caused by the recording and reasonable
attorney's fees and costs.
[Sections 15.005-15.050 reserved for expansion]
SUBCHAPTER B. SECURED CREDITOR TO RECORD SATISFACTION;
LIABILITY FOR FAILURE
Sec. 15.051. PAYOFF STATEMENT: REQUEST AND CONTENT. (a)
An entitled person, or an agent authorized by an entitled person to
request a payoff statement, may give to the secured creditor a
notification requesting a payoff statement for a specified payoff
date not more than 30 days after the notification is given. The
notification must contain:
(1) the entitled person's name;
(2) if given by a person other than an entitled person,
the name of the person giving the notification and a statement that
the person is an authorized agent of the entitled person;
(3) a direction whether the statement is to be sent to
the entitled person or that person's authorized agent;
(4) the address to which the creditor must send the
statement; and
(5) sufficient information to enable the creditor to
identify the secured obligation and the real property encumbered by
the security interest.
(b) If a notification under Subsection (a) directs the
secured creditor to send the payoff statement to a person
identified as an authorized agent of the entitled person, the
secured creditor must send the statement to the agent, unless the
secured creditor knows that the entitled person has not authorized
the request.
(c) Within 10 days after the effective date of a
notification that complies with Subsection (a), the secured
creditor shall issue a payoff statement and send it as directed
pursuant to Subsection (a)(3) in the manner prescribed in Section
15.003 for giving a notification. A secured creditor that sends a
payoff statement to the entitled person or the authorized agent may
not claim that the notification did not satisfy Subsection (a). If
the person to whom the notification is given once held an interest
in the secured obligation but has since assigned that interest, the
person need not send a payoff statement but shall give a
notification of the assignment to the person to whom the payoff
statement otherwise would have been sent, providing the name and
address of the assignee.
(d) A payoff statement must contain:
(1) the date on which it was prepared and the payoff
amount as of that date, including the amount by type of each fee,
charge, or other sum included within the payoff amount;
(2) the information reasonably necessary to calculate
the payoff amount as of the requested payoff date, including the per
diem interest amount; and
(3) the payment cutoff time, if any, the address or
place where payment must be made, and any limitation as to the
authorized method of payment.
(e) A payoff statement may contain the amount of any fees
authorized under this section not included in the payoff amount.
(f) A secured creditor may not qualify a payoff amount or
state that it is subject to change before the payoff date unless the
payoff statement provides information sufficient to permit the
entitled person or the person's authorized agent to request an
updated payoff amount at no charge and to obtain that updated payoff
amount during the secured creditor's normal business hours on the
payoff date or the immediately preceding business day.
(g) A secured creditor must provide upon request one payoff
statement without charge during any six-month period. A secured
creditor may charge a fee of $25 for each additional payoff
statement requested during that six-month period. However, a
secured creditor may not charge a fee for providing an updated
payoff amount under Subsection (f) or a corrected payoff statement
under Section 15.052(a).
(h) Unless the security instrument provides otherwise, a
secured creditor is not required to send a payoff statement by means
other than first-class mail. If the creditor agrees to send a
statement by another means, it may charge a reasonable fee for
complying with the requested manner of delivery.
(i) Except as otherwise provided in Section 15.055, if a
secured creditor to which a notification has been given pursuant to
Subsection (a) does not send a timely payoff statement that
substantially complies with Subsection (d), the creditor is liable
to the entitled person for any actual damages caused by the failure
plus $500, but not punitive damages. A creditor that does not pay
the damages provided in this subsection within 30 days after
receipt of a notification demanding payment may also be liable for
reasonable attorney's fees and costs.
Sec. 15.052. UNDERSTATED PAYOFF STATEMENT: CORRECTION;
EFFECT. (a) If a secured creditor determines that the payoff
amount it provided in a payoff statement was understated, the
creditor may send a corrected payoff statement. If the entitled
person or the person's authorized agent receives and has a
reasonable opportunity to act upon a corrected payoff statement
before making payment, the corrected statement supersedes an
earlier statement.
(b) A secured creditor that sends a payoff statement
containing an understated payoff amount may not deny the accuracy
of the payoff amount as against any person that reasonably and
detrimentally relies upon the understated payoff amount.
(c) This chapter does not:
(1) affect the right of a secured creditor to recover
any sum that it did not include in a payoff amount from any person
liable for payment of the secured obligation; or
(2) limit any claim or defense that a person liable for
payment of a secured obligation may have under law other than this
chapter.
Sec. 15.053. SECURED CREDITOR TO SUBMIT SATISFACTION FOR
RECORDING; LIABILITY FOR FAILURE. (a) A secured creditor shall
submit for recording a satisfaction of a security instrument within
30 days after the creditor receives full payment or performance of
the secured obligation. If a security instrument secures a line of
credit or future advances, the secured obligation is fully
performed only if, in addition to full payment, the secured
creditor has received a notification requesting the creditor to
terminate the line of credit or containing a statement sufficient
to terminate the effectiveness of the provision for future advances
in the security instrument.
(b) Except as otherwise provided in Section 15.055, a
secured creditor that is required to submit a satisfaction of a
security instrument for recording and does not do so by the end of
the period specified in Subsection (a) is liable to the landowner
for any actual damages caused by the failure, but not punitive
damages.
(c) Except as otherwise provided in Subsection (d) and in
Section 15.055, a secured creditor that is required to submit a
satisfaction of a security instrument for recording and does not do
so by the end of the period specified in Subsection (a) is also
liable to the landowner for $500 and any reasonable attorney's fees
and court costs incurred if, after the expiration of the period
specified in Subsection (a):
(1) the landowner gives the creditor a notification,
by any method authorized by Section 15.003 that provides proof of
receipt, demanding that the creditor submit a satisfaction for
recording; and
(2) the creditor does not submit a satisfaction for
recording within 30 days after receipt of the notification.
(d) Subsection (c) does not apply if the secured creditor
received full payment or performance of the secured obligation
before the effective date of this chapter.
(e) A secured creditor is considered to submit a
satisfaction of a security interest for recording if the secured
creditor submits the document, with required fees and taxes, to the
title insurance company or other closing agent overseeing the
transfer of title to the property.
Sec. 15.054. FORM AND EFFECT OF SATISFACTION. (a) A
document is a satisfaction of a security instrument if it:
(1) identifies the security instrument, the original
parties to the security instrument, the recording data for the
security instrument, and the office in which the security
instrument is recorded;
(2) states that the person signing the satisfaction is
the secured creditor;
(3) contains a legal description of the real property
identified in the security instrument, but only if a legal
description is necessary for a satisfaction to be properly indexed;
(4) contains language terminating the effectiveness
of the secured creditor's rights under the security instrument; and
(5) is signed by the secured creditor and acknowledged
as required by law for a conveyance of an interest in real property.
(b) The recording officer shall accept for recording a
satisfaction of a security instrument, unless:
(1) an amount equal to or greater than the applicable
recording fees and taxes is not tendered;
(2) the document is submitted by a method or in a
medium not authorized by the law of this state; or
(3) the document is not signed by the secured creditor
and acknowledged as required by law for a conveyance of an interest
in real property.
Sec. 15.055. LIMITATION OF SECURED CREDITOR'S LIABILITY. A
secured creditor is not liable under this chapter if it:
(1) established a reasonable procedure to achieve
compliance with its obligations under this chapter;
(2) complied with that procedure in good faith; and
(3) was unable to comply with its obligations because
of circumstances beyond its control.
[Sections 15.056-15.100 reserved for expansion]
SUBCHAPTER C. SATISFACTION BY AFFIDAVIT
Sec. 15.101. DEFINITION; ELIGIBILITY TO SERVE AS
SATISFACTION AGENT; REGULATION OF SATISFACTION AGENTS. (a) In
this subchapter, "title insurance company" means an organization
authorized to conduct the business of insuring titles to real
property in this state.
(b) The following may serve as a satisfaction agent under
this subchapter:
(1) a title insurance company, acting directly or
through an agent authorized to sign and submit for recording an
affidavit of satisfaction; or
(2) an attorney licensed to practice law in this state
and in good standing.
Sec. 15.102. AFFIDAVIT OF SATISFACTION: NOTIFICATION TO
SECURED CREDITOR. (a) If a secured creditor has not submitted for
recording a satisfaction of a security instrument within the period
specified in Section 15.053(a), a satisfaction agent acting for and
with authority from the landowner may give the secured creditor a
notification that the satisfaction agent intends to submit for
recording an affidavit of satisfaction of the security instrument.
The notification must include:
(1) the identity and mailing address of the
satisfaction agent;
(2) identification of the security instrument for
which a recorded satisfaction is sought, including the names of the
original parties to, and the recording data for, the security
instrument;
(3) a statement that the satisfaction agent has
reasonable grounds to believe that:
(A) the real property described in the security
instrument is residential real property;
(B) the person to which the notification is being
given is the secured creditor; and
(C) the secured creditor has received full
payment or performance of the secured obligation;
(4) a statement that a satisfaction of the security
instrument does not appear of record; and
(5) a statement that the satisfaction agent, acting
with the authorization of the owner of the real property described
in the security instrument, intends to sign and submit for
recording an affidavit of satisfaction of the security instrument
unless, within 30 days after the effective date of the
notification:
(A) the secured creditor submits a satisfaction
of the security instrument for recording;
(B) the satisfaction agent receives from the
secured creditor a notification stating that the secured obligation
remains unsatisfied; or
(C) the satisfaction agent receives from the
secured creditor a notification stating that the secured creditor
has assigned the security instrument and identifying the name and
address of the assignee.
(b) A notification under Subsection (a) must be sent by a
method authorized by Section 15.003 that provides proof of receipt
to the secured creditor's address for giving a notification for the
purpose of requesting a payoff statement or, if the satisfaction
agent cannot ascertain that address, to the secured creditor's
address for notification for any other purpose.
(c) This chapter does not require a person to agree to serve
as a satisfaction agent.
Sec. 15.103. AFFIDAVIT OF SATISFACTION: AUTHORIZATION TO
SUBMIT FOR RECORDING. (a) Subject to Subsections (b) and (c), a
satisfaction agent may sign and submit for recording an affidavit
of satisfaction of a security instrument complying with Section
15.104 if:
(1) the secured creditor has not, to the knowledge of
the satisfaction agent, submitted for recording a satisfaction of a
security instrument within 30 days after the effective date of a
notification complying with Section 15.102(a); or
(2) the secured creditor authorizes the satisfaction
agent to do so.
(b) A satisfaction agent may not sign and submit for
recording an affidavit of satisfaction of a security instrument if
it has received a notification under Section 15.102(a)(5)(B)
stating that the secured obligation remains unsatisfied.
(c) If a satisfaction agent receives a notification under
Section 15.102(a)(5)(C) stating that the security instrument has
been assigned, the satisfaction agent may not submit for recording
an affidavit of satisfaction of the security instrument without:
(1) giving a notification of intent to submit for
recording an affidavit of satisfaction to the identified assignee
at the identified address; and
(2) complying with Section 15.102 with respect to the
identified assignee.
Sec. 15.104. AFFIDAVIT OF SATISFACTION: CONTENT. An
affidavit of satisfaction of a security instrument must:
(1) identify the original parties to the security
instrument, the secured creditor, the recording data for the
security instrument, and, if necessary for proper indexing of the
affidavit, a legal description of the real property identified in
the security instrument;
(2) state the basis upon which the person signing the
affidavit is a satisfaction agent;
(3) state that the person signing the affidavit has
reasonable grounds to believe that the real property described in
the security instrument is residential real property;
(4) state that the person signing the affidavit has
reasonable grounds to believe that the secured creditor has
received full payment or performance of the secured obligation;
(5) state that the person signing the affidavit,
acting with the authority of the owner of the real property
described in the security instrument, gave notification to the
secured creditor of its intention to sign and submit for recording
an affidavit of satisfaction;
(6) describe the method by which the person signing
the affidavit gave notification in compliance with this chapter;
(7) state that:
(A) more than 30 days have elapsed since the
effective date of that notification, and the person signing the
affidavit has no knowledge that the secured creditor has submitted
a satisfaction for recording and has not received a notification
that the secured obligation remains unsatisfied; or
(B) the secured creditor authorized the person
signing the affidavit to sign and record an affidavit of
satisfaction; and
(8) be signed and acknowledged as required by law for a
conveyance of an interest in real property.
Sec. 15.105. AFFIDAVIT OF SATISFACTION: FORM. No
particular phrasing of an affidavit of satisfaction is required.
The following form of affidavit, when properly completed, is
sufficient to satisfy the requirements of Section 15.104:
[Date of Affidavit]
AFFIDAVIT OF SATISFACTION
The undersigned hereby states as follows:
1. I am: [check appropriate box]
[ ] an officer or a duly appointed agent of [Name of title
insurance company] (the "Company"), which is authorized to transact
the business of insuring titles to interests in real property in
this state, and I have been authorized by the Company to sign and
submit for recording an affidavit of satisfaction.
[ ] an attorney licensed to practice law in this state and
in good standing.
2. I am signing this Affidavit of Satisfaction to evidence
full payment or performance of the obligations secured by real
property covered by the following security instrument (the
"security instrument") currently held by (the "secured creditor"):
Title of security instrument:
Original parties to security instrument:
County and state of recording:
Recording data for security instrument:
3. I have reasonable grounds to believe that:
a. the secured creditor has received full payment or
performance of the balance of the obligations secured by the
security instrument; and
b. the real property described in the security
instrument constitutes residential real property.
4. With the authorization of the owner of the real property
described in the security instrument, I gave notification to the
secured creditor by [method authorized by Section 15.003, Property
Code, that provides proof of receipt] that I would sign and record
an affidavit of satisfaction of the security instrument if, within
30 days after the effective date of the notification, the secured
creditor did not submit a satisfaction of the security interest for
recording or give notification that the secured obligation remains
unsatisfied.
5. [check appropriate box]
[ ] The 30-day period identified in Paragraph 4 has elapsed,
I have no knowledge that the secured creditor has submitted a
satisfaction for recording, and I have not received notification
that the secured obligation remains unsatisfied.
[ ] The secured creditor responded to the notification in
Paragraph 4 by authorizing me to execute and record this affidavit
of satisfaction.
[Signature of Satisfaction Agent]
[Notarization]
Sec. 15.106. AFFIDAVIT OF SATISFACTION: EFFECT. (a) Upon
recording, an affidavit substantially complying with the
requirements of Section 15.104 constitutes a satisfaction of the
security instrument described in the affidavit.
(b) The recording of an affidavit of satisfaction of a
security instrument does not by itself extinguish any liability of
a person for payment or performance of the secured obligation.
(c) The recording officer may not refuse to accept for
recording an affidavit of satisfaction of a security instrument
unless:
(1) an amount equal to or greater than the applicable
recording fees and taxes is not tendered;
(2) the affidavit is submitted by a method or in a
medium not authorized by the law of this state; or
(3) the affidavit is not signed by the satisfaction
agent and acknowledged as required by law for a conveyance of an
interest in real property.
Sec. 15.107. LIABILITY OF SATISFACTION AGENT. (a) Except
as otherwise provided in Subsection (b), a satisfaction agent that
records an affidavit of satisfaction of a security instrument
erroneously or with knowledge that the statements contained in the
affidavit are false is liable to the secured creditor for any actual
damages caused by the recording and reasonable attorney's fees and
costs.
(b) A satisfaction agent that records an affidavit of
satisfaction of a security instrument erroneously is not liable if
the agent properly complied with this subchapter and the secured
creditor did not respond in a timely manner to the notification
pursuant to Section 15.102(a)(5).
(c) If a satisfaction agent records an affidavit of
satisfaction of a security instrument with knowledge that the
statements contained in the affidavit are false, this section does
not preclude:
(1) a court from awarding punitive damages on account
of the conduct;
(2) the secured creditor from proceeding against the
satisfaction agent under law of this state other than this chapter;
or
(3) the enforcement of any criminal statute
prohibiting the conduct.
[Sections 15.108-15.150 reserved for expansion]
SUBCHAPTER D. MISCELLANEOUS PROVISIONS
Sec. 15.151. UNIFORMITY OF APPLICATION AND CONSTRUCTION.
In applying and construing this Uniform Act, consideration must be
given to the need to promote uniformity of the law with respect to
its subject matter among states that enact it.
Sec. 15.152. RELATION TO ELECTRONIC SIGNATURES IN GLOBAL
AND NATIONAL COMMERCE ACT. This chapter modifies, limits, and
supersedes the federal Electronic Signatures in Global and National
Commerce Act (15 U.S.C. Section 7001 et seq.) but does not modify,
limit, or supersede Section 101(c) of that Act (15 U.S.C. Section
7001(c)) or authorize electronic delivery of any of the notices
described in Section 103(b) of that Act (15 U.S.C. Section
7003(b)).
SECTION 2. Section 12.017, Property Code, is repealed.
SECTION 3. This Act does not affect the validity or effect
of an affidavit filed under Section 12.017, Property Code, before
the effective date of this Act.
SECTION 4. This Act takes effect September 1, 2005.