The Finance Commission of Texas Adopts New Rules Regarding Payoff Statements
The Commission recently reached a decision regarding the rules associated with insurance and lending companies providing payoff information. These decisions were reached based on recent objections from Texas mortgage industry leaders.
A meeting was held where stakeholders provided their thoughts on the payoff statement regulations. They voiced how the new set of rules can be improved, for instance that the “loan type” item should be removed from the form to avoid confusion for people who are not familiar with the industry. While this line item wasn’t removed from the form completely, a compromise was reached where “loan type” is now optional.
Other concerns also resulted in adaptations to the new regulations. For instance “One commenter suggested the form indicate that the form must be sent to the mortgage servicer’s designated address and appropriate contact person for requesting payoff statement information, if either is so designated. Another commenter suggested this include e-mail addresses. The Commission accepted these comments and incorporated the suggested changes into the new rule.”
Or in this instance where, “One commenter suggested the form include a notice stating that the statute provides mortgage servicers with at least seven business days after the date the payoff statement is received to provide the payoff statement to the requesting title company. To enhance clarity and ease transition to requirements under the new rule, the Commission accepted this comment and has modified the form to include a notice of the time requirement prescribed by the new rule.” [Source]
The standard payoff statement form is what mortgage services must use when issuing the official payoff statement to a title company’s request for a home loan. The terms of this agreement also include the number of days a mortgage service official must deliver this statement.
Generally, the Payoff Statement Form includes the name of the mortgage holders, the physical address of the loan’s underlying collateral, and the proposed closing date of the loan. The form also asks for such things as the payoff amount and sufficient information about the loan. Other information such as the adjustable rate mortgage information is only needed when applicable.
It’s pretty hard to digest but it’s important to understand all the underlying significance of the adopted rules for the payoff statements and how everyone has been affected.
The new rules have been effective since January 8, 2012.