H.B. No. 558

	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 on the
	prescribed form within a time specified by finance commission rule,
	which must allow the mortgage servicer at least seven 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 a
	payoff statement is incorrect, 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 submits an incorrect payoff
	statement to a title insurance company 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:
	(1)  remains a liability of the former mortgagor owed
	to the mortgagee; and
	(2)  if the payoff statement is in connection with:
	(A)  the sale of the real property:
	(i)  the deed of trust or other contract lien
	securing an interest in the property is released;
	(ii)  within a reasonable time after receipt
	of payment by the mortgagee or mortgage servicer, the mortgagee or
	mortgage servicer, as applicable, shall deliver to the title
	company a release of the deed of trust or other contract lien
	securing an interest in the property; and
	(iii)  any proceeds disbursed at closing to
	or for the benefit of the mortgagor, excluding closing costs
	related to the transaction, are subject to a constructive trust for
	the benefit of the mortgagee to the extent of the underpayment; or
	(B)  a refinance by the mortgagor of the existing
	home loan:
	(i)  the lien securing the existing home
	loan becomes subordinate to the lien securing the new home loan; and
	(ii)  any proceeds disbursed at closing to
	or for the benefit of the mortgagor, excluding closing costs
	related to the transaction, are subject to a constructive trust for
	the benefit of the mortgagee to the extent of the underpayment.
	SECTION 2.  (a)  As soon as practicable after the effective
	date of this Act, the Finance Commission of Texas shall adopt the
	rules, including the standard payoff statement 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 before the 90th day after the date the Finance Commission of
	Texas adopts the rules required by that section.
	SECTION 3.  This Act takes effect September 1, 2011.
	______________________________	______________________________
	President of the Senate	Speaker of the House
	I certify that H.B. No. 558 was passed by the House on April
	13, 2011, by the following vote:  Yeas 148, Nays 0, 1 present, not
	voting.
	______________________________
	Chief Clerk of the House
	I certify that H.B. No. 558 was passed by the Senate on May 5,
	2011, by the following vote:  Yeas 31, Nays 0.
	______________________________
	Secretary of the Senate
	APPROVED:  _____________________
	Date
	_____________________
	Governor