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#2197464 - 11/06/18 07:35 PM Paid Promissory Notes
swiggles Offline
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swiggles
Joined: Aug 2001
Posts: 7,351
Other than for home equity loans, is there a state law requirement that a paid promissory note must be marked "paid" and returned to the borrower?
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#2197471 - 11/06/18 07:49 PM Re: Paid Promissory Notes swiggles
DoubleNickel Offline
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Joined: Jan 2013
Posts: 25
Texas Finance Code Chapter 342 – Consumer Loans

SUBCHAPTER J. AUTHORIZED LENDER'S DUTIES AND AUTHORITY

Sec. 342.454. RETURN OF INSTRUMENTS TO BORROWER ON REPAYMENT. Within a reasonable time after a loan is repaid in full or an open-end account is terminated according to the terms of the contract, a lender shall cancel and return to a borrower any instrument, including a note, assignment, security agreement, or mortgage that:
(1) secured the loan; and
(2) does not secure another indebtedness of the borrower to the lender.

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#2197486 - 11/06/18 08:26 PM Re: Paid Promissory Notes swiggles
swiggles Offline
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swiggles
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Many thanks, DoubleNickel. We were trying to determine if we were overkilling the process.....guess not.
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#2197490 - 11/06/18 08:29 PM Re: Paid Promissory Notes swiggles
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,227
Galveston, TX
Of course that Chapter only covers consumer loans with an interest rate greater than 10%.
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#2197501 - 11/06/18 09:02 PM Re: Paid Promissory Notes rlcarey
swiggles Offline
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swiggles
Joined: Aug 2001
Posts: 7,351
Of course!!...........no....didn't realize that. I suspect that zero of our consumer loans are at a rate greater than 10%. BUT....I just HATE to give lenders (or actually the lender's administrative assistant) decision making duties, like deciding if the rate is over 10% or if the loan is a Texas home equity loan....seems simple enough, but.....frontline staff, well, you get the picture.

Seems easier to simply mail consumer loans back, as a practice/procedure. We're too small to centralize such a function. Each branch maintains the loans made at that branch. But would it fulfill the requirement to "cancel" a printout of an imaged copy of a promissory note/security instrument and mail the copies?
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#2197932 - 11/09/18 03:50 PM Re: Paid Promissory Notes swiggles
swiggles Offline
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swiggles
Joined: Aug 2001
Posts: 7,351
Quote:
But would it fulfill the requirement to "cancel" a printout of an imaged copy of a promissory note/security instrument and mail the copies?


Would this be allowed? Or does it have to be the original signed note?
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#2215706 - 06/13/19 07:24 PM Re: Paid Promissory Notes swiggles
banker-12 Offline
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Joined: May 2007
Posts: 1,240
What is the requirement under the HE law If a copy of the paid home equity note was not sent to the customers for the past 4 or 5 years? Do we have to take corrective action and mail them out now?

I was looking for something in the law and I couldn't find anything.

Thank you.

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