Bill Text: TX HB3088 | 2017-2018 | 85th Legislature | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Relating to exemptions for certain residential property owners from the applicability of certain regulations of residential mortgage loan companies and residential mortgage loan originators.
Spectrum: Slight Partisan Bill (Democrat 3-1)
Status: (Introduced - Dead) 2017-05-08 - Placed on General State Calendar [HB3088 Detail]
Download: Texas-2017-HB3088-Introduced.html
Bill Title: Relating to exemptions for certain residential property owners from the applicability of certain regulations of residential mortgage loan companies and residential mortgage loan originators.
Spectrum: Slight Partisan Bill (Democrat 3-1)
Status: (Introduced - Dead) 2017-05-08 - Placed on General State Calendar [HB3088 Detail]
Download: Texas-2017-HB3088-Introduced.html
85R6360 GRM-D | ||
By: Ortega | H.B. No. 3088 |
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relating to the licensing and other regulation of wrap lenders. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Section 156.002, Finance Code, is amended by | ||
adding Subdivision (16) to read as follows: | ||
(16) "Wrap mortgage loan" has the meaning assigned by | ||
Section 180.002. | ||
SECTION 2. 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, none of which is a wrap mortgage loan, to purchasers | ||
of the property for all or part of the purchase price of the | ||
residential 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 3. Section 157.002, Finance Code, is amended by | ||
adding Subdivision (7) to read as follows: | ||
(7) "Wrap mortgage loan" has the meaning assigned by | ||
Section 180.002. | ||
SECTION 4. Sections 157.0121(b) and (c), Finance Code, are | ||
amended to read as follows: | ||
(b) The following individuals are exempt from this chapter: | ||
(1) a registered mortgage loan originator when acting | ||
for: | ||
(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; | ||
(2) an individual who offers or negotiates the terms | ||
of a residential mortgage loan with or on behalf of an immediate | ||
family member of the individual; | ||
(3) a licensed attorney who negotiates the terms of a | ||
residential mortgage loan on behalf of a client as an ancillary | ||
matter to the attorney's representation of the client, unless the | ||
attorney: | ||
(A) takes a residential mortgage loan | ||
application; and | ||
(B) offers or negotiates the terms of a | ||
residential mortgage loan; | ||
(4) an individual who offers or negotiates terms of a | ||
residential mortgage loan secured by a dwelling that serves as the | ||
individual's residence; | ||
(5) any owner of residential real estate who in any | ||
12-consecutive-month period makes no more than five residential | ||
mortgage loans, none of which is a wrap mortgage loan, to purchasers | ||
of the property for all or part of the purchase price of the | ||
residential real estate against which the mortgage is secured; and | ||
(6) an individual who is exempt as provided by Section | ||
180.003(b). | ||
(c) Employees of the following entities, when acting for the | ||
benefit of those entities, are exempt from the licensing and other | ||
requirements of this chapter applicable to residential mortgage | ||
loan originators: | ||
(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) any owner of residential real estate who in any | ||
12-consecutive-month period makes no more than five residential | ||
mortgage loans, none of which is a wrap mortgage loan, to purchasers | ||
of the property for all or part of the purchase price of the | ||
residential real estate against which the mortgage is secured; and | ||
(3) 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 5. Section 158.002, Finance Code, is amended by | ||
adding Subdivisions (8) and (9) to read as follows: | ||
(8) "Wrap lender" has the meaning assigned by Section | ||
180.002. | ||
(9) "Wrap mortgage loan" has the meaning assigned by | ||
Section 180.002. | ||
SECTION 6. Section 158.052, Finance Code, is amended by | ||
amending Subsection (a) and adding Subsection (d) to read as | ||
follows: | ||
(a) This chapter does not require registration by: | ||
(1) a federal or state depository institution, or a | ||
subsidiary or affiliate of a federal or state depository | ||
institution; | ||
(2) a person registered under Chapter 157; | ||
(3) a person licensed under Chapter 342 or regulated | ||
under Chapter 343, if the person does not act as a residential | ||
mortgage loan servicer servicing first-lien secured loans; or | ||
(4) except as provided by Subsection (d), a person | ||
making a residential mortgage loan with the person's own funds, or | ||
to secure all or a portion of the purchase price of real property | ||
sold by that person. | ||
(d) This chapter applies to a wrap lender who services a | ||
wrap mortgage loan. | ||
SECTION 7. Section 180.002, Finance Code, is amended by | ||
adding Subdivisions (24), (25), and (26) to read as follows: | ||
(24) "Wrap borrower" means a person obligated to pay a | ||
wrap mortgage loan. | ||
(25) "Wrap lender" means a person who makes a wrap | ||
mortgage loan. | ||
(26) "Wrap mortgage loan" means a residential mortgage | ||
loan: | ||
(A) made to finance the purchase of residential | ||
real estate that will continue to be subject to an unreleased lien | ||
that: | ||
(i) attached to the residential real estate | ||
before the loan was made; and | ||
(ii) secures a debt incurred by a person | ||
other than the wrap borrower that was not paid off at the time the | ||
loan was made; and | ||
(B) obligating the wrap borrower to the wrap | ||
lender for payment of a debt the principal amount of which includes: | ||
(i) the outstanding balance of the debt | ||
described by Paragraph (A)(ii); and | ||
(ii) any remaining amount of the purchase | ||
price financed by the wrap lender. | ||
SECTION 8. Section 180.003(a), Finance Code, is amended to | ||
read as follows: | ||
(a) The following persons are exempt from this chapter: | ||
(1) a registered mortgage loan originator when acting | ||
for an entity described by Section 180.002(16)(A)(i), (ii), or | ||
(iii); | ||
(2) an individual who offers or negotiates terms of a | ||
residential mortgage loan with or on behalf of an immediate family | ||
member of the individual; | ||
(3) a licensed attorney who negotiates the terms of a | ||
residential mortgage loan on behalf of a client as an ancillary | ||
matter to the attorney's representation of the client, unless the | ||
attorney: | ||
(A) takes a residential mortgage loan | ||
application; and | ||
(B) offers or negotiates the terms of a | ||
residential mortgage loan; | ||
(4) an individual who offers or negotiates terms of a | ||
residential mortgage loan secured by a dwelling that serves as the | ||
individual's residence; | ||
(5) an owner of residential real estate who in any | ||
12-consecutive-month period makes no more than five residential | ||
mortgage loans, none of which is a wrap mortgage loan, to purchasers | ||
of the property for all or part of the purchase price of the | ||
residential real estate against which the mortgage is secured; and | ||
(6) an owner of a dwelling who in any | ||
12-consecutive-month period makes no more than five residential | ||
mortgage loans, none of which is a wrap mortgage loan, to purchasers | ||
of the property for all or part of the purchase price of the | ||
dwelling against which the mortgage or security interest is | ||
secured. | ||
SECTION 9. This Act takes effect September 1, 2017. |