| (a) Definition. "Collected funds" means cash or any other form of payment that is or has become final. For example, an electronic funds transfer that is actually received by the authorized lender from the borrower's financial institution would be deemed to be collected funds. (b) Procedure. Upon discharge of an indebtedness by payment, renewal, or refinancing, a lender must return an original or true and correct copy of the instrument creating the indebtedness marked "PAID" or, in lieu of a marked original or copy, provide a discharge and release of all obligations under the loan to satisfy the requirements of Texas Finance Code, §342.454. In addition, if a loan has been paid off, a lender must give the borrower, in a recordable form, a release of the lien, including a lien on a motor vehicle title or on real estate, or must provide documentation of the release to the borrower, at the option of the lender whose loan has been paid, a copy of an endorsement, with or without recourse, representation or warranty, and assignment of the lien to a lender that is refinancing the loan. A lender must comply with the requirements of this section within a reasonable time not to exceed 30 days after receipt of collected funds by the lender. An authorized lender must discharge or release a lien on a motor vehicle not later than the 10th day after the date of receipt of the collected funds by the lender pursuant to Texas Transportation Code, §501.115. |
