SECTION 89.802. Payoff Statements

(a) Scope. This section applies to a payoff statement described by Texas Tax Code, §32.06(a-6) that a property tax lender provides in response to a request described by §89.801(a) of this title (relating to Requests for Payoff Statements).

(b) Definitions. In this section, the following terms have the following definitions:

(1) Balance date--The date used to calculate the total payoff amount. The balance date must be the same date as the requested balance date on the request, if possible. If it is not possible for the property tax lender to provide a balance date that is the same as the requested balance date, then the balance date must be as close as possible to the requested balance date.

(2) Business day--A day on which a property tax lender is open for business.

(3) Requestor--A person who sends a request described by §89.801(a) of this title.

(4) Total payoff amount--The total amount due under a property tax loan as of the balance date.

(c) Required elements. A payoff statement under this section must include:

(1) the date of the payoff statement;

(2) the name and address of the property tax lender;

(3) the name of the borrower;

(4) the address or a legal description of the property subject to the property tax loan;

(5) one of the following:

(A) the tax account number used by the taxing unit(s);

(B) the property identification number used by the taxing unit(s); or

(C) the property tax loan number used by the property tax lender;

(6) the total payoff amount;

(7) the balance date;

(8) a statement substantially similar to the following: "The total payoff amount is the total amount due under the property tax loan, as of the balance date stated above.";

(9) an itemization of the total payoff amount, which must include:

(A) the unpaid principal balance on the property tax loan;

(B) the accrued interest as of the balance date;

(C) any refundable amount resulting from unearned legitimate discount points described by §89.601(d) of this title (relating to Fees for Closing Costs); and

(D) any other fees that are part of the total amount due under the property tax loan, with a specific description for each fee;

(10) the due date of the next payment; and

(11) the per diem interest that will accrue after the balance date, expressed as a dollar amount;

(12) a statement indicating the purpose of the payoff statement, substantially similar to one of the following:

(A) "We are providing this payoff statement for informational purposes under Texas Tax Code, §32.06(a-6). This information does not create a right to pay off the property tax loan.";

(B) "We are providing this payoff statement because of a statutory right to pay off the property tax loan under Texas Tax Code, §32.06(f), (f-1) or §32.065(b-1)."; or

(C) "We are providing this payoff statement for another purpose."; and

(13) the signature of the property tax lender.

(d) Permissible elements. A payoff statement under this section may include:

(1) additional contact information for the property tax lender;

(2) the name of one or more co-borrowers on the property tax loan; and

(3) a statement substantially similar to the following: "Certain additional charges may be added to the property tax loan after the date of this statement, to the extent authorized by law."

(e) Calculation of total payoff amount.

(1) For amounts other than the unpaid principal balance and the accrued interest as of the balance date, the total payoff amount may only include amounts charged on or before the date of the payoff statement. This paragraph does not prohibit a property tax lender from imposing lawful additional charges after the date of the payoff statement and before the balance date, if the property tax lender provides the notification and an amended payoff statement described by subsection (f)(3) or (4) of this section.

(2) If the due date of the next payment is before the balance date, then the property tax lender must calculate the total payoff amount as if the borrower will not make the next payment.

(f) Ensuring accuracy and providing updated payoff statement.

(1) A property tax lender must ensure that all information is accurate in a payoff statement under this section.

(2) After the date of the payoff statement and before the balance date, if the property tax lender learns that any of the information was inaccurate as of the date of the payoff statement, then the property tax lender must immediately:

(A) notify the requestor of the inaccuracy; and

(B) send an amended, accurate payoff statement to the requestor in the same manner the payoff statement was sent.

(3) After the date of the payoff statement and before the balance date, if the property tax lender imposes a one-time lawful additional charge that it did not reasonably anticipate on the date of the payoff statement (e.g., a nonsufficient funds fee), then the property tax lender must immediately send an amended, accurate payoff statement to the requestor in the same manner the payoff statement was sent. The amended payoff statement must include the additional charge in the total payoff amount.

(4) If the property tax lender reasonably anticipates that it will impose recurring, lawful additional charges after the date of the payoff statement and before the balance date (e.g., attorney's fees for services performed during a foreclosure), then the property tax lender must notify the requestor in writing of the types of recurring charges that the property tax lender anticipates. The property tax lender must send this notification either on the same date that it sends the payoff statement, or immediately after it learns that the additional charges are likely to be imposed. If the property tax lender imposes additional charges described by this paragraph, then on the balance date, it must send an amended, accurate payoff statement to the requestor in the same manner the payoff statement was sent. The amended payoff statement's total payoff amount must include all additional charges as of the balance date.

(5) After the date of the payoff statement and before the balance date, if any information on the payoff statement changes other than the information described by this subsection (e.g., the property tax lender's address), then the property tax lender must immediately notify the requestor of the change.

(g) Multiple property tax loans on the same property. If a property tax lender receives a request relating to real property on which the property tax lender holds more than one property tax loan, then the property tax lender must provide a separate payoff statement for each of those property tax loans. Each payoff statement must comply with this section. In addition, the property tax lender may provide a combined payoff statement showing the total amount required to pay off all of the property tax loans on the real property.

(h) Method of delivery. The payoff statement must be delivered by the method specified in the request, if the request includes a valid delivery method as provided by §89.801(b)(9) of this title. Delivery to a mailing address must be made by one or more of the following methods:

(1) U.S. mail with prepaid first-class postage;

(2) U.S. certified mail with return receipt requested;

(3) a commercial delivery service with tracking abilities; or

(4) a courier service.

(i) Timing of delivery. The payoff statement must be delivered within seven business days after the date on which the property tax lender receives the request.

(j) Verification of delivery. Verifying delivery of the payoff statement is a best practice for a property tax lender. A property tax lender may rely on an established system of verifiable procedures to verify delivery of a payoff statement under this section. A property tax lender may use any of the following verification methods:

(1) U.S. mail. The property tax lender must allow a reasonable period of time for delivery by mail. A period of three calendar days, not including Sundays and federal legal public holidays, constitutes a rebuttable presumption for sufficient mailing and delivery.

(2) Commercial delivery service with tracking abilities. For payoff statements delivered by commercial delivery service, a dated receipt indicating that the payoff statement was successfully delivered to the mailing address provided in the request will constitute verification of delivery.

(3) Courier service. For payoff statements delivered by courier service, a dated receipt indicating that the payoff statement was successfully delivered to the mailing address provided in the request will constitute verification of delivery.

(4) Fax. For payoff statements delivered via facsimile, a dated fax confirmation page indicating that the payoff statement was successfully transmitted to the fax number provided in the request will constitute a rebuttable presumption for sufficient delivery.

(5) E-mail. For payoff statements delivered via e-mail, a dated reply e-mail indicating that the payoff statement was successfully delivered to the e-mail address provided in the request will constitute verification of delivery.

(k) Deficient request. If the request does not contain an element required by §89.801(b) of this title, or if the request contains a material mistake in a required element, then the property tax lender is not required to send a payoff statement under this section. However, the property tax lender must notify the requestor in writing that the request is deficient. The property tax lender must send this notification within two business days of discovery that the request is deficient, and within seven business days of receiving the request. A property tax lender is not required to provide this notification if the request provides no valid method of communicating with the requestor in writing.

(l) Payoff statement returned undeliverable. If a property tax lender attempts delivery of the payoff statement by the method specified in the request, and the payoff statement is returned undeliverable, then the property tax lender must notify the requestor in writing that the payoff statement was returned undeliverable within two business days of discovery that the payoff statement was returned undeliverable. A property tax lender is not required to provide this notification if:

(1) the request provides no valid method of communicating with the requestor in writing; or

(2) the property tax lender delivers the payoff statement by a different method to which the requestor agrees.

Source Note: The provisions of this §89.802 adopted to be effective November 7, 2013, 38 TexReg 7693; amended to be effective July 9, 2015, 40 TexReg 4347