Texas House Bill HB4397

Texas 2009 - 81st Regular

• Out of House Committee: 4/21/09
• Voted on by House: 5/2/09

Caption

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

Impact

By implementing HB4397, Texas law will stipulate that lenders and mortgage servicers are bound by the payoff amounts they specify in the statements provided to borrowers or their authorized representatives. This means that once a borrower has requested a payoff statement and the lender has responded, any subsequent attempts by the lender to collect a different amount will be restricted, thereby reducing the risk of miscommunication or error during loan settlements. The bill is expected to strengthen consumer trust in financial transactions related to home loans.

Summary

House Bill 4397 aims to enhance borrower protection by regulating the requirements for payoff statements associated with residential mortgage loans in Texas. This legislation instructs the Finance Commission to develop a standardized form of payoff statement, which will include crucial details such as the identification of the lien instrument and an accurate request for the total amount owed, including per diem interest calculations. By establishing clear guidelines, the bill seeks to bring transparency and consistency to payoff statements, which can be a source of confusion for borrowers striving to settle their loans.

Contention

A potential point of contention surrounding this bill could arise from the responsibilities imposed on lenders and mortgage servicers regarding the accuracy of billing in payoff statements. While proponents argue that protecting borrower rights is essential, lenders may raise concerns about the additional regulatory burden presented by these stipulations. They might argue that the requirement to issue corrected statements within a limited timeframe could complicate operations, especially in cases where calculation errors might occur. Overall, the balance between consumer protection and lender operational efficiency is likely to be a focal point of discussion.