Our June 29, 2011 Compliance Memorandum discussed Texas House Bill 558, effective September 11, 2011, which added a section to the Finance Code addressing payoff statements. Pursuant to House Bill 558, the Finance Commission (the “Commission”) recently adopted rules effective January 8, 2012 prescribing a standard Payoff Statement Form that must be used by mortgage servicers to provide those payoff statements.
Texas Rules – 7 TAC §§ 155.1 – 155.3
§ 155.1 Definitions
“Home loan” means a loan that is made to one or more individuals for personal, family, or household purposes and is secured in whole or part by a manufactured home, used or to be used as the borrower’s principal residence or real property improved by a dwelling designed for occupancy for 4 or fewer families and used or to be used as the borrower’s principal residence.
§ 155.2 Payoff Statement Form
Payoff statement requests must be in writing and submitted to a mortgage servicer by mail, e-mail, or facsimile. If the mortgage servicer has designated a specific physical address, e-mail address, and/or a specific representative to receive payoff statement requests, then requests will be submitted in accordance with such designation. Requests for a payoff statement must, at a minimum, include the following:
- Name of borrower;
- Physical address of the underlying collateral of the loan, or a legal description of the property; and
- Proposed closing date of the loan.
Upon receipt of a valid request, a mortgage servicer must provide, in writing, by mail or e-mail, the payoff statement information for the home loan specified in the request, which must be provided on the prescribed Payoff Statement Form or in a substantially similar format, which contains all elements not indicated as optional on the prescribed Payoff Statement Form. The statement must include the following information:
- The proposed closing date for the sale or other transaction, as provided in the request;
- The payoff amount that is valid through the proposed closing date; and
- Sufficient information to identify the loan for which the payoff information is provided.
If applicable, the payoff statement may contain:
- Adjustable rate mortgage information;
- Per diem amount;
- Late charge information;
- Escrow disbursement information;
- A statement regarding which party is responsible for the release of lien; and
- Other information necessary to provide a clear and concise payoff statement.
The Payoff Statement Form may be found at: http://www.sml.texas.gov/ResidentialMortgageLoanServicer/documents/rmls_forms/section_155_2_c_6_payoff_form%20.pdf.
§ 155.3 Time of Delivery of Payoff Statement
A mortgage servicer must deliver a payoff statement to the title company by the 8th business day after the date the request is received unless federal law requires a shorter response time.