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A BILL TO BE ENTITLED
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AN ACT
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relating to payoff statements provided in connection with certain |
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home loans. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter B, Chapter 343, Finance Code, is |
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amended by adding Section 343.106 to read as follows: |
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Sec. 343.106. PAYOFF STATEMENTS. (a) In this section, |
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"mortgagee," "mortgage servicer," and "mortgagor" have the |
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meanings assigned by Section 51.0001, Property Code. |
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(b) The finance commission shall adopt rules governing |
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requests by title insurance companies for payoff information from |
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mortgage servicers related to home loans and the provision of that |
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information, including rules prescribing a standard payoff |
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statement form that must be used by mortgage servicers to provide |
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those payoff statements. |
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(c) In adopting rules under Subsection (b), the finance |
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commission shall require a mortgage servicer who receives a request |
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for a payoff statement with respect to a home loan from a title |
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insurance company to deliver the requested payoff statement within |
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a time prescribed by finance commission rule, which must allow the |
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mortgage servicer at least three business days after the date the |
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request is received to deliver the payoff statement. |
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(d) The standard payoff statement form prescribed by the |
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finance commission under Subsection (b) must require that a |
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completed form: |
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(1) state the proposed closing date for the sale and |
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conveyance of the real property securing the home loan or for any |
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other transaction that would involve the payoff of the home loan, as |
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specified by the title insurance company's request; and |
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(2) provide a payoff amount that is valid through that |
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date. |
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(e) Except as provided by Subsection (f) or (g), if the |
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mortgage servicer provides a completed payoff statement form that |
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meets the requirements of this section and rules adopted under this |
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section in response to a request for a payoff statement, the |
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mortgage servicer or mortgagee may not, on or before the proposed |
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closing date, demand that a mortgagor pay an amount in excess of the |
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payoff amount specified in the payoff statement. |
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(f) If a mortgage servicer or mortgagee discovers that an |
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error has been made in a payoff statement, the mortgage servicer or |
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mortgagee may correct and deliver the statement on or before the |
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second business day before the specified proposed closing date. |
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The corrected payoff statement must be delivered to the requestor |
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by: |
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(1) certified mail with return receipt requested; and |
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(2) electronic means, if the requestor provides the |
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mortgage servicer with a means to deliver the corrected statement |
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electronically. |
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(g) If a mortgage servicer makes an error in a payoff amount |
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contained in a payoff statement that results in the mortgage |
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servicer requesting an amount that is less than the correct payoff |
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amount, the mortgage servicer or mortgagee does not deliver a |
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corrected payoff statement in accordance with Subsection (f), and |
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the mortgage servicer receives payment in the amount specified in |
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the payoff statement, the difference between the amount included in |
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the payoff statement and the correct payoff amount becomes an |
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unsecured liability of the former mortgagor owed to the mortgagee, |
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notwithstanding Subsection (h)(1). |
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(h) If the mortgage servicer receives payment in the amount |
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specified in the payoff statement, including any corrected |
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statement provided in accordance with Subsection (f): |
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(1) the home loan covered by the payoff statement is |
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considered paid in full; and |
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(2) the mortgagee shall execute and deliver to the |
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mortgagor, within a reasonable time after receipt of the payment by |
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the mortgage servicer: |
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(A) a release of the lien on the real property |
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securing the home loan; or |
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(B) a copy of an endorsement and assignment of |
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the lien to a lender that is refinancing the home loan. |
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SECTION 2. (a) As soon as practicable after the effective |
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date of this Act, the Finance Commission of Texas shall adopt the |
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form required by Section 343.106, Finance Code, as added by this |
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Act. |
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(b) Notwithstanding Section 343.106, Finance Code, as added |
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by this Act, a mortgage servicer is not required to comply with that |
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section until the Finance Commission of Texas adopts the form |
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required by that section. |
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SECTION 3. This Act takes effect September 1, 2011. |