82R17515 KFF-F
By: Deshotel H.B. No. 558
Substitute the following for H.B. No. 558:
By: Quintanilla C.S.H.B. No. 558
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,
"mortgagee," "mortgage servicer," and "mortgagor" have the
meanings assigned by Section 51.0001, Property Code.
(b) The finance commission shall adopt rules governing
requests by title insurance companies for payoff information from
mortgage servicers related to home loans and the provision of that
information, including rules prescribing a standard payoff
statement form that must be used by mortgage servicers to provide
those payoff statements.
(c) In adopting rules under Subsection (b), the finance
commission shall require a mortgage servicer who receives a request
for a payoff statement with respect to a home loan from a title
insurance company to deliver the requested payoff statement on the
prescribed form within a time specified by finance commission rule,
which must allow the mortgage servicer at least seven business days
after the date the request is received to deliver the payoff
statement.
(d) The standard payoff statement form prescribed by the
finance commission under Subsection (b) must require that a
completed form:
(1) state the proposed closing date for the sale and
conveyance of the real property securing the home loan or for any
other transaction that would involve the payoff of the home loan, as
specified by the title insurance company's request; and
(2) provide a payoff amount that is valid through that
date.
(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 and rules adopted under this
section in response to a request for a payoff statement, the
mortgage servicer or mortgagee may not, on or before the proposed
closing date, 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 discovers that a
payoff statement is incorrect, the mortgage servicer or mortgagee
may correct and deliver the statement on or before the second
business day before the specified proposed 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 submits an incorrect payoff
statement to a title insurance company that results in the mortgage
servicer requesting an amount that is less than the correct payoff
amount, the mortgage servicer or mortgagee does not deliver a
corrected payoff statement in accordance with Subsection (f), and
the mortgage servicer receives payment in the amount specified in
the payoff statement, the difference between the amount included in
the payoff statement and the correct payoff amount:
(1) remains a liability of the former mortgagor owed
to the mortgagee; and
(2) if the payoff statement is in connection with:
(A) the sale of the real property:
(i) the deed of trust or other contract lien
securing an interest in the property is released;
(ii) within a reasonable time after receipt
of payment by the mortgagee or mortgage servicer, the mortgagee or
mortgage servicer, as applicable, shall deliver to the title
company a release of the deed of trust or other contract lien
securing an interest in the property; and
(iii) any proceeds disbursed at closing to
or for the benefit of the mortgagor, excluding closing costs
related to the transaction, are subject to a constructive trust for
the benefit of the mortgagee to the extent of the underpayment; or
(B) a refinance by the mortgagor of the existing
home loan:
(i) the lien securing the existing home
loan becomes subordinate to the lien securing the new home loan; and
(ii) any proceeds disbursed at closing to
or for the benefit of the mortgagor, excluding closing costs
related to the transaction, are subject to a constructive trust for
the benefit of the mortgagee to the extent of the underpayment.
SECTION 2. (a) As soon as practicable after the effective
date of this Act, the Finance Commission of Texas shall adopt the
rules, including the standard payoff statement 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 before the 90th day after the date the Finance Commission of
Texas adopts the rules required by that section.
SECTION 3. This Act takes effect September 1, 2011.