H.B. No. 3945
AN ACT
relating to a title insurance company affidavit as a release of
lien.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 12.017(a), Property Code, is amended by
amending Subdivision (6) and adding Subdivision (7) to read as
follows:
(6) "Title insurance company" means a corporation or
other business entity authorized [and licensed] to engage in
[transact] the business of insuring titles to interests in real
property in this state.
(7) "Authorized title insurance agent," with respect
to an Affidavit as Release of Lien under this section, means a
person licensed as a title insurance agent under Chapter 2651,
Insurance Code, and authorized in writing by a title insurance
company by instrument recorded in the real property records in the
county in which the property to which the affidavit relates is
located to execute one or more Affidavits as Release of Lien in
compliance with this section, subject to any terms, limitations,
and conditions that are set forth in the instrument executed by the
title insurance company.
SECTION 2. Section 12.017, Property Code, is amended by
amending Subsections (b), (c), (d), (e), (f), (g), (h), and (i) and
adding Subsections (j) and (k) to read as follows:
(b) This section applies only to a mortgage on:
(1) property consisting exclusively of a
one-to-four-family residence, including a residential unit in a
condominium regime; or
(2) property other than property described by
Subdivision (1), if the original face amount of the indebtedness
secured by the mortgage on the property is less than $1.5 million.
(c) An [If a mortgagee fails to execute and deliver a
release of mortgage to the mortgagor or the mortgagor's designated
agent within 60 days after the date of receipt of payment of the
mortgage by the mortgagee in accordance with a payoff statement
furnished by the mortgagee or its mortgage servicer, an] authorized
officer of a title insurance company or an authorized title
insurance agent may, on behalf of the mortgagor or a transferee of
the mortgagor who acquired title to the property described in the
mortgage, execute an affidavit that complies with the requirements
of this section and record the affidavit in the real property
records of each county in which the mortgage was recorded.
(d) An affidavit executed under Subsection (c) [this
section] must be in substantially the following form [state that]:
AFFIDAVIT AS RELEASE OF LIEN
Before me, the undersigned authority, on this day personally
appeared (insert name of affiant) ("Affiant") who, being first duly
sworn, upon his/her oath states:
1. My name is (insert name of Affiant), and I am an
authorized officer of (insert name of title insurance company or
authorized title insurance agent) ("Title Company").
2. This affidavit is made on behalf of the mortgagor or a
transferee of the mortgagor who acquired title to the property
described in the following mortgage:
(describe mortgage, the name of the mortgagor, and the property
described in the mortgage)
3. (Insert name of Mortgagee) ("Mortgagee") provided a
payoff statement with respect to the loan secured by the mortgage.
4. Affiant has ascertained that Title Company delivered to
Mortgagee payment of the loan secured by the mortgage in the amount
and time and to the location required by the payoff statement.
5. The mortgage relates to:
(A) property consisting exclusively of a
one-to-four-family residence, which may include a residential unit
in a condominium regime; or
(B) property, other than property described by
Paragraph (A) above, for which the original face amount of the
indebtedness secured by the mortgage on the property is less than
$1.5 million.
6. Pursuant to Section 12.017, Texas Property Code, this
affidavit constitutes a full and final release of the mortgage from
the property.
Signed this___ day of ___________, ____.
__________________________________________ (signature of affiant)
State of ______________
County of _____________
Sworn to and subscribed to before me on __________ (date) by
____________ (insert name of affiant).
_________________________________ (signature of notarial officer)
(Seal, if any, of notary) __________
___________________________________________________ (printed
name)
My commission expires:
______________________
[(1) the affiant is an authorized officer of a title
insurance company;
[(2) the affidavit is made on behalf of the mortgagor
or a transferee of the mortgagor who acquired title to the property
described in the mortgage;
[(3) the mortgagee provided a payoff statement with
respect to the loan secured by the mortgage;
[(4) the affiant has ascertained that the mortgagee
has received payment of the loan secured by the mortgage in
accordance with the payoff statement, as evidenced by:
[(A) a bank check, certified check, escrow
account check from the title company or title insurance agent, or
attorney trust account check that has been negotiated by the
mortgagee; or
[(B) another documentary evidence of the receipt
of payment by the mortgagee;
[(5) more than 60 days have elapsed since the date
payment was received by the mortgagee;
[(6) the title insurance company or its agent has
given the mortgagee at least 15 days' notice in writing of its
intention to execute and record an affidavit in accordance with
this section, with a copy of the proposed affidavit attached to the
written notice; and
[(7) the mortgagee has not responded in writing to the
notification, or a request for additional payment made by the
mortgagee has been complied with at least 15 days before the date of
the affidavit.]
(e) An [The] affidavit filed under Subsection (c) or (f)
must include the names of the mortgagor and the mortgagee, the date
of the mortgage, and the volume and page or clerk's file number of
the real property records where the mortgage is recorded, together
with similar information for a recorded assignment of the mortgage.
(f) On or after the date of the payment to which the
affidavit relates, the title insurance company or authorized title
insurance agent must notify the mortgagee at the location to which
the payment is sent that the title insurance company or authorized
title insurance agent may file for record at any time the affidavit
as a release of lien. If notice required by this section is not
provided to the mortgagee, the title insurance company or
authorized title insurance agent may not file for record the
affidavit as a release of lien. The mortgagee may file a separate
affidavit describing the mortgage and property and controverting
the affidavit by the title insurance company or authorized title
insurance agent as a release of lien on or before the 45th day after
the date the mortgagee receives the notice if the mortgagee mails a
copy of the mortgagee's affidavit to the title insurance company or
authorized title insurance agent within that 45-day period. [The
affiant must attach to the affidavit a photostatic copy, certified
as a true copy of the original document, of:
[(1) the documentary evidence that payment has been
received by the mortgagee, including the mortgagee's endorsement of
a negotiated check if paid by check; and
[(2) the payoff statement.]
(g) An affidavit under Subsection (c) [that is executed and
recorded as provided by this section] operates as a release of the
mortgage described in the affidavit if the affidavit, as provided
by this section:
(1) is executed;
(2) is recorded; and
(3) is not controverted by a separate affidavit by the
mortgagee in accordance with the requirements of Subsection (f).
(h) The county clerk shall index an [the] affidavit filed
under this section in the names of the original mortgagee and the
last assignee of the mortgage appearing of record as the grantors
and in the name of the mortgagor as grantee.
(i) A person who knowingly causes an affidavit with false
information to be executed and recorded under this section is
liable for the penalties for filing a false affidavit, including
the penalties for commission of offenses under Section 37.02 of the
Penal Code[, and to a party injured by the affidavit for actual
damages or $5,000, whichever is greater]. The attorney general may
sue to collect the penalty. A person who negligently causes an
affidavit with false information to be executed and recorded under
this section is liable to a party injured by the affidavit for
actual damages. If the attorney general or an injured party
bringing suit substantially prevails in an action under this
subsection, the court may award reasonable attorney's fees and
court costs to the prevailing party.
(j) A title insurance company or authorized title insurance
agent that, at any time after payment of the mortgage, files for
record an affidavit executed under Subsection (c) may use any
recording fee collected for the recording of a release of the
mortgage for the purpose of filing the affidavit.
(k) This section does not affect any agreement or obligation
of a mortgagee to execute and deliver a release of mortgage.
SECTION 3. The change in law made by this Act applies only
to an affidavit filed on or after the effective date of this Act. An
affidavit filed before the effective date of this Act is governed by
the law in effect immediately before the effective date of this Act,
and that law is continued in effect for that purpose.
SECTION 4. This Act takes effect September 1, 2009.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 3945 was passed by the House on May 4,
2009, by the following vote: Yeas 143, Nays 0, 2 present, not
voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 3945 was passed by the Senate on May
26, 2009, by the following vote: Yeas 31, Nays 0.
______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor