By: Watson S.B. No. 1596
(In the Senate - Filed March 10, 2009; March 17, 2009, read
first time and referred to Committee on Business and Commerce;
April 17, 2009, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 6, Nays 0; April 17, 2009,
sent to printer.)
COMMITTEE SUBSTITUTE FOR S.B. No. 1596 By: Watson
A BILL TO BE ENTITLED
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. Subsection (a), Section 12.017, Property Code,
is amended by adding Subdivision (5-a) and amending Subdivision (6)
to read as follows:
(5-a) "Title insurance agent" means a person licensed
as a title insurance agent under Chapter 2651, Insurance Code.
(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.
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 a 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
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 title insurance
agent must notify the mortgagee at the location to which the payment
is sent that the company or 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
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 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 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 $10,000 [$5,000], whichever is greater. The attorney
general may sue to collect the penalty. 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 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.
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