By: Deshotel H.B. No. 4397
A BILL TO BE ENTITLED
AN ACT
relating to payoff statements in connection with mortgage loans.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 343 Finance Code is amended to add a new
section 343.207 to read as follows:
343.207: Pay off statement form required; right of borrower and
third parties to rely thereon
1. The Finance Commission shall promulgate a form of payoff
statement for use in connection with all loans secured by real
property in this State. Such form shall:
a. be addressed to the secured party shown on the last
recorded lien instrument in the public records for the county in
which the land is located,
b. shall identify the land charged with the lien by the
legal description contained in the lien instrument,
c. shall identify the lien instrument by reference to
the borrowers, trustee, lender and original amount of the loan;
d. Request a payoff of all amounts owed by the
borrowers attributable by the lender to the real property secured
by the lien instrument, whether one or multiple notes;
e. States the proposed closing date of any
transactions at which the loan is proposed to be paid;
f. Requests per diem interest necessary to fully pay
the loan from the date the payoff letter is returned to the borrower
or third party requesting the payoff statement on behalf of the
borrower to the proposed closing date set out in the request;
g. Provision for such payoff amount to be stated by the
lender or mortgage servicer signed by an authorized officer or
agent of the entity owning the note and loan.
2. When a payoff is properly requested as provided in
subsection 1 of this section and the lender or mortgage servicer has
provided the completed form to the borrower or third party
requesting it on behalf of the borrower the lender or mortgage
servicer is bound to the borrower and to the third party requesting
the payoff statement on behalf of the borrower and the borrower and
any third party requesting the payoff statement on the borrower's
behalf for such amount and the lender of mortgage servicer cannot
demand or collect a different amount after the proposed closing
date as set out in the payoff statement request. Any amounts
remaining owed because of a mistake by the lender or mortgage
servicer does not constitute a lien against the property but shall
remain the personal liability of the borrower.
3. When the payoff has been properly requested and provided
as set out in this section, the lender or mortgage servicer who
notices a material error in the payment statement provided to the
borrower or a third party requesting the payment statement on
behalf of the borrower, the lender or mortgage servicer may provide
a corrected payoff statement 2 business days before the closing
date set out on the payoff request. Such corrected payoff statement
shall be provided via electronic means as well as certified mail or
receipted delivery service. A material error is defined as an error
in the amount of the payoff of more than 1/2 of 1% of the loan
amount. If no corrected payoff statement is issued by the lender or
mortgage servicer, the lender is bound by the original payoff
statement.
SECTION 2. This Act takes effect September 1, 2009.