81R20417 KFF-F
By: Deshotel H.B. No. 4397
Substitute the following for H.B. No. 4397:
By: Elkins C.S.H.B. No. 4397
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:
(1) "Mortgagee," "mortgage servicer," "mortgagor,"
and "security instrument" have the meanings assigned by Section
51.0001, Property Code.
(2) "Material error" means an error in the payoff
amount contained in a payoff statement in which the correct payoff
amount minus the amount included in the payoff statement is greater
than one-half of one percent of the original amount of the home loan
and the amount of any other debts owed by the mortgagor to the
mortgagee that are secured by the real property securing the home
loan.
(b) Not later than the fifth business day after the date a
mortgage servicer receives a request for a payoff statement with
respect to a home loan from a mortgagor or a person acting on behalf
of the mortgagor, the mortgage servicer shall deliver to the
requestor the requested payoff statement as prescribed by this
section.
(c) A request for a payoff statement must be addressed to
the mortgagee at the address provided in the most recent applicable
security instrument recorded with the county clerk of the county in
which the real property subject to the security instrument is
located.
(d) The finance commission by rule shall adopt a standard
form that must be used by a mortgage servicer in providing a payoff
statement requested under this section. In adopting rules under
this subsection, the commission shall require that a completed
form:
(1) include:
(A) the legal description of the real property
securing the home loan as the description appears in the applicable
security instrument;
(B) the names of each mortgagor, trustee, and
mortgagee named in the applicable security instrument; and
(C) a statement of the original amount of the
home loan;
(2) state the amount of:
(A) the unpaid balance of the original home loan
and any other debts owed by the mortgagor to the mortgagee that are
secured by the real property securing the home loan, including
principal, interest, and other charges properly assessed under the
documentation for the home loan and other debts;
(B) the interest on a per diem basis for the
unpaid balance of the home loan from the date the payoff statement
is prepared until the closing date specified in Subdivision (3);
and
(C) if applicable, the unpaid balance and the
interest on a per diem basis for the unpaid balance of any other
debts owed by the mortgagor to the mortgagee with respect to the
real property that is security for the home loan for the period
prescribed by Paragraph (B);
(3) state the proposed closing date for the sale and
purchase of the real property securing the home loan or for any
other transaction that would involve the payoff of the home loan and
any other debts described by Subsection (d)(2)(A);
(4) be signed by an authorized officer or agent of the
mortgagee; and
(5) include any additional information the finance
commission determines necessary.
(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 in response to a request for
a payoff statement made in accordance with this section, the
mortgage servicer or mortgagee may not 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 notices that a
material 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 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 and the transaction referenced in the payoff statement is
closed, the difference in the amount included in the payoff
statement and the correct payoff amount becomes an unsecured
liability of the former mortgagor owed to the mortgagee.
(h) If a mortgagor pays the unpaid balance and the interest
on a per diem amount calculated through the proposed closing date
specified in the payoff statement received under this section,
including any corrected statement provided in accordance with
Subsection (f):
(1) the home loan and other obligations are considered
paid in full; and
(2) the mortgagee shall execute and deliver to the
mortgagor, within a reasonable time after payment, a release of the
lien on the real property securing the home loan and any other
obligations, or a copy of an endorsement and assignment of the lien
to a lender that is refinancing the home loan.
(i) A mortgage servicer who violates Subsection (b) is
liable to the mortgagor for:
(1) any actual damages suffered by the mortgagor as a
result of the violation;
(2) reasonable attorney's fees; and
(3) court costs.
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, 2009.