Bill Text: TX HB2656 | 2017-2018 | 85th Legislature | Comm Sub
Bill Title: Relating to the regulation of residential mortgage loan companies, including the registration of mortgage lot lender companies; authorizing a fee.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2017-05-10 - Placed on General State Calendar [HB2656 Detail]
Download: Texas-2017-HB2656-Comm_Sub.html
85R25947 EES-F | |||
By: Longoria | H.B. No. 2656 | ||
Substitute the following for H.B. No. 2656: | |||
By: Stephenson | C.S.H.B. No. 2656 |
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relating to the regulation of residential mortgage loan companies, | ||
including the registration of mortgage lot lender companies; | ||
authorizing a fee. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Section 156.002, Finance Code, is amended by | ||
adding Subdivision (8-b) and amending Subdivisions (10-b) and (13) | ||
to read as follows: | ||
(8-b) "Mortgage lot lender company" means a | ||
corporation, company, partnership, or sole proprietorship that | ||
engages in the business of residential mortgage loan origination on | ||
residential real estate located in this state on which no dwelling | ||
is constructed to purchasers of the residential real estate for all | ||
or part of the purchase price of the residential real estate against | ||
which the mortgage is secured. | ||
(10-b) "Qualifying individual" means an individual | ||
who is: | ||
(A) except as provided by Section | ||
156.2045(a)(3), licensed under Chapter 157 as a residential | ||
mortgage loan originator; and | ||
(B) designated by a residential mortgage loan | ||
company as the company's representative. | ||
(13) "Residential mortgage loan company" means a | ||
person, other than an individual, that engages in the business of | ||
residential mortgage loan origination on residential real estate | ||
located in this state. The term includes a credit union subsidiary | ||
organization, auxiliary mortgage loan activity company, mortgage | ||
company, independent contractor loan processor or underwriter | ||
company, mortgage lot lender company, and financial services | ||
company. | ||
SECTION 2. Section 156.201, Finance Code, is amended to | ||
read as follows: | ||
Sec. 156.201. LICENSES REQUIRED. (a) A person may not act | ||
in the capacity of, engage in the business of, or advertise or hold | ||
that person out as engaging in or conducting the business of a | ||
residential mortgage loan company in this state unless the person | ||
holds an active residential mortgage loan company license, is | ||
registered under Section 156.2012, is registered under Section | ||
156.2045, or is exempt under Section 156.202. | ||
(c) Each residential mortgage loan company and the | ||
company's qualifying individual are [ |
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responsible to the commissioner and members of the public for any | ||
act or conduct performed by the residential mortgage loan | ||
originator sponsored by or acting for the residential mortgage loan | ||
company in connection with: | ||
(1) the origination of a residential mortgage loan; or | ||
(2) a transaction that is related to the origination | ||
of a residential mortgage loan in which the qualifying individual | ||
knew or should have known of the transaction. | ||
SECTION 3. Section 156.202(a-1), Finance Code, is amended | ||
to read as follows: | ||
(a-1) The following entities are exempt from this chapter: | ||
(1) a nonprofit organization: | ||
(A) providing self-help housing that originates | ||
zero interest residential mortgage loans for borrowers who have | ||
provided part of the labor to construct the dwelling securing the | ||
loan; or | ||
(B) that has designation as a Section 501(c)(3) | ||
organization by the Internal Revenue Service and originates | ||
residential mortgage loans for borrowers who, through a self-help | ||
program, have provided at least 200 labor hours or 65 percent of the | ||
labor to construct the dwelling securing the loan; | ||
(2) a mortgage banker registered under Chapter 157; | ||
(3) any owner of residential real estate who in any | ||
12-consecutive-month period makes no more than five residential | ||
mortgage loans to purchasers of the residential real estate | ||
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real estate against which the mortgage is secured; and | ||
(4) an entity that is: | ||
(A) a depository institution; | ||
(B) a subsidiary of a depository institution that | ||
is: | ||
(i) owned and controlled by the depository | ||
institution; and | ||
(ii) regulated by a federal banking agency; | ||
or | ||
(C) an institution regulated by the Farm Credit | ||
Administration. | ||
SECTION 4. Section 156.203, Finance Code, is amended by | ||
adding Subsection (a-3) to read as follows: | ||
(a-3) An application for a mortgage lot lender company | ||
registration under Section 156.2045 must be: | ||
(1) in writing; | ||
(2) under oath; and | ||
(3) on the form prescribed by the commissioner. | ||
SECTION 5. Subchapter C, Chapter 156, Finance Code, is | ||
amended by adding Section 156.2045 to read as follows: | ||
Sec. 156.2045. QUALIFICATIONS AND REQUIREMENTS FOR | ||
REGISTRATION: MORTGAGE LOT LENDER COMPANY. (a) To be registered as | ||
a mortgage lot lender company, an applicant must: | ||
(1) submit a completed application together with the | ||
payment of applicable fees through the Nationwide Mortgage | ||
Licensing System and Registry; | ||
(2) designate control persons for the company through | ||
the Nationwide Mortgage Licensing System and Registry; | ||
(3) designate an individual as the company's | ||
qualifying individual who is either: | ||
(A) an owner, officer, or partner of the company; | ||
or | ||
(B) a residential mortgage loan originator who is | ||
licensed under Chapter 157; | ||
(4) properly sponsor one or more residential mortgage | ||
loan originators who are licensed under Chapter 157; | ||
(5) not be in violation of this chapter, a rule adopted | ||
under this chapter, or any order previously issued by the | ||
commissioner to the applicant; | ||
(6) have the company name or assumed name properly | ||
filed with either the secretary of state or the appropriate county | ||
clerk's office; | ||
(7) maintain a physical office in this state; and | ||
(8) provide any other information required by the | ||
commissioner. | ||
(b) If the commissioner determines that a person has met the | ||
requirements of Subsection (a), the commissioner shall issue a | ||
registration to the person. The registration is valid for one year, | ||
expires on December 31 of each year, and must be renewed annually by | ||
meeting the requirements under Subsection (a) and paying a renewal | ||
fee in an amount not to exceed $500. A person must renew an expired | ||
registration in the manner determined by the commissioner. | ||
(c) A registered mortgage lot lender company is subject to | ||
Subchapters D and E as if the company were licensed as a residential | ||
mortgage loan company. | ||
SECTION 6. As soon as practicable after the effective date | ||
of this Act, the Finance Commission of Texas shall adopt the rules | ||
necessary to implement the changes in law made by this Act, and the | ||
savings and mortgage lending commissioner shall begin registering | ||
persons as mortgage lot lender companies as required by Section | ||
156.2045, Finance Code, as added by this Act. | ||
SECTION 7. This Act takes effect September 1, 2017. |