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  H.B. No. 558
 
 
 
 
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.
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
 
         I certify that H.B. No. 558 was passed by the House on April
  13, 2011, by the following vote:  Yeas 148, Nays 0, 1 present, not
  voting.
 
  ______________________________
  Chief Clerk of the House   
 
 
         I certify that H.B. No. 558 was passed by the Senate on May 5,
  2011, by the following vote:  Yeas 31, Nays 0.
 
  ______________________________
  Secretary of the Senate    
  APPROVED:  _____________________
                     Date          
   
            _____________________
                   Governor