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  H.B. No. 3945
 
 
 
 
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.  Section 12.017(a), Property Code, is amended by
  amending Subdivision (6) and adding Subdivision (7) to read as
  follows:
               (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.
               (7)  "Authorized title insurance agent," with respect
  to an Affidavit as Release of Lien under this section, means a
  person licensed as a title insurance agent under Chapter 2651,
  Insurance Code, and authorized in writing by a title insurance
  company by instrument recorded in the real property records in the
  county in which the property to which the affidavit relates is
  located to execute one or more Affidavits as Release of Lien in
  compliance with this section, subject to any terms, limitations,
  and conditions that are set forth in the instrument executed by the
  title insurance company.
         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 an authorized 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
  authorized 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 authorized title
  insurance agent must notify the mortgagee at the location to which
  the payment is sent that the title insurance company or authorized
  title insurance 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
  authorized 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 authorized 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
  authorized 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 $5,000, whichever is greater]. The attorney general may
  sue to collect the penalty. A person who negligently causes an
  affidavit with false information to be executed and recorded under
  this section is liable to a party injured by the affidavit for
  actual damages. 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 authorized 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.
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
 
         I certify that H.B. No. 3945 was passed by the House on May 4,
  2009, by the following vote:  Yeas 143, Nays 0, 2 present, not
  voting.
 
  ______________________________
  Chief Clerk of the House   
 
 
         I certify that H.B. No. 3945 was passed by the Senate on May
  26, 2009, by the following vote:  Yeas 31, Nays 0.
 
  ______________________________
  Secretary of the Senate    
  APPROVED:  _____________________
                     Date          
   
            _____________________
                   Governor