Bill Text: TX HB558 | 2011-2012 | 82nd Legislature | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Relating to payoff statements provided in connection with certain home loans.

Spectrum: Bipartisan Bill

Status: (Passed) 2011-05-17 - Effective on 9/1/11 [HB558 Detail]

Download: Texas-2011-HB558-Introduced.html

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82R575 KFF-F
By: Deshotel H.B. No. 558

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