Bill Text: TX SB1319 | 2011-2012 | 82nd Legislature | Engrossed
Bill Title: Relating to certain loans secured by a lien on residential real property and to other transactions involving residential real property; providing civil penalties.
Spectrum: Bipartisan Bill
Status: (Engrossed - Dead) 2011-05-20 - Committee report sent to Calendars [SB1319 Detail]
Download: Texas-2011-SB1319-Engrossed.html
By: Lucio, Carona | S.B. No. 1319 |
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relating to certain loans secured by a lien on residential real | ||
property and to other transactions involving residential real | ||
property; providing civil penalties. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Title 5, Finance Code, is amended by adding | ||
Chapter 397 to read as follows: | ||
CHAPTER 397. INFORMATION FURNISHED BY RESIDENTIAL MORTGAGE | ||
SERVICERS | ||
SUBCHAPTER A. GENERAL PROVISIONS | ||
Sec. 397.001. DEFINITION. In this chapter, "mortgage | ||
servicer" has the meaning assigned by Section 51.0001, Property | ||
Code. | ||
Sec. 397.002. APPLICABILITY. (a) This chapter applies | ||
only to a loan secured by a first or subordinate lien on residential | ||
real property that is not: | ||
(1) a federally related mortgage loan, as defined by | ||
12 U.S.C. Section 2602; or | ||
(2) a loan that is primarily for business, commercial, | ||
or agricultural purposes, or for temporary financing, such as a | ||
construction loan, as referred to under 12 U.S.C. Section 2602. | ||
(b) This chapter does not apply to a loan if the mortgage | ||
servicer is a natural person who is related to the borrower within | ||
the second degree by consanguinity or affinity, as determined under | ||
Subchapter B, Chapter 573, Government Code. | ||
[Sections 397.003-397.050 reserved for expansion] | ||
SUBCHAPTER B. BORROWER REQUESTS FOR INFORMATION | ||
Sec. 397.051. RULES. The Finance Commission of Texas may | ||
adopt rules necessary to implement this subchapter. | ||
Sec. 397.052. RECEIPTS FOR PAYMENTS REQUIRED. Each time a | ||
mortgage servicer accepts payment from a borrower, the mortgage | ||
servicer shall provide a receipt to the borrower that clearly and | ||
conspicuously states: | ||
(1) the amount received by the mortgage servicer as | ||
payment toward the loan; and | ||
(2) how the amount described by Subdivision (1) was | ||
applied to the borrower's account. | ||
Sec. 397.053. ANNUAL ACCOUNTING STATEMENT. A mortgage | ||
servicer shall provide to the borrower an annual statement in | ||
January of each year for the term of the loan. The statement must | ||
clearly and conspicuously state the following information: | ||
(1) the amount of each payment that was received by the | ||
mortgage servicer as payment toward the loan during the preceding | ||
calendar year; | ||
(2) how each payment described by Subdivision (1) was | ||
applied to the borrower's account, including a statement of the | ||
amount of each payment that was applied to: | ||
(A) the borrower's principal obligation under | ||
the loan; | ||
(B) the interest charged on the loan; | ||
(C) any escrow or suspense account associated | ||
with the loan; and | ||
(D) any fee or other charge assessed against the | ||
borrower during the preceding calendar year; and | ||
(3) the outstanding balance of the borrower's | ||
principal obligation under the loan. | ||
Sec. 397.054. PAYOFF STATEMENTS. (a) In this section, | ||
"payoff statement" has the meaning assigned by Section 12.017, | ||
Property Code. | ||
(b) Except as provided by Subsection (c) and subject to | ||
Subsection (d), a mortgage servicer may not charge a fee for | ||
preparing or transmitting a payoff statement to a borrower or other | ||
person requesting a payoff statement on behalf of the borrower. | ||
(c) A mortgage servicer may charge a reasonable processing | ||
fee to cover the cost of providing a payoff statement by facsimile | ||
transmission or by a courier service if, before charging the fee, | ||
the mortgage servicer discloses to the requestor that payoff | ||
statements are available for free if the requestor requests that | ||
the statement be provided in a manner that will not result in the | ||
charging of a processing fee. | ||
(d) After a mortgage servicer has provided two payoff | ||
statements during a calendar year to or on behalf of a borrower | ||
under Subsection (b) without charge, other than processing fees | ||
authorized under Subsection (c), the mortgage servicer may charge a | ||
reasonable fee for providing a payoff statement to or on behalf of | ||
the borrower during the remainder of the calendar year. | ||
(e) A mortgage servicer shall provide a payoff statement not | ||
later than the 10th day after the date the lender receives the | ||
request for the payoff statement from or on behalf of a borrower, | ||
and the statement must be valid for a reasonable time after being | ||
provided to the requestor. | ||
Sec. 397.055. PROVISION OF INFORMATION REGARDING DISPUTE OR | ||
ERROR. (a) A mortgage servicer shall provide a written statement | ||
to a borrower in response to a borrower's written request for | ||
information regarding a dispute or error involving the borrower's | ||
account that includes the following information, if requested: | ||
(1) whether the account is current and an explanation | ||
of any default and the date the account went into default; | ||
(2) the current balance due on the loan, including the | ||
principal due, the amount of any funds held in a suspense account, | ||
the amount of any escrow balance known to the servicer, and whether | ||
there are any escrow deficiencies or shortages known to the | ||
servicer; | ||
(3) the identity, address, and other relevant | ||
information about the current holder, owner, or assignee of the | ||
loan; and | ||
(4) the telephone number and mailing address of a | ||
servicer representative with the information and authority to | ||
answer questions and resolve disputes. | ||
(b) A mortgage servicer must provide a statement under | ||
Subsection (a) on or before the 10th day after the date the servicer | ||
receives a written request from the borrower that: | ||
(1) includes or otherwise enables the servicer to | ||
identify the name and account of the borrower; and | ||
(2) includes a statement that the account is or may be | ||
in error or otherwise provides sufficient detail to the servicer | ||
regarding information sought by the borrower. | ||
[Sections 397.056-397.100 reserved for expansion] | ||
SUBCHAPTER C. REMEDIES | ||
Sec. 397.101. ENFORCEMENT GENERALLY. The Department of | ||
Savings and Mortgage Lending, the attorney general, or any party to | ||
a loan to which this chapter applies may enforce this chapter. | ||
Sec. 397.102. ACTION BY BORROWER. In addition to any other | ||
legal and equitable remedy available, a borrower injured by a | ||
violation of this chapter may bring an action: | ||
(1) for injunctive relief to require compliance with | ||
this chapter; and | ||
(2) to recover: | ||
(A) actual damages, including reasonable | ||
attorney's fees; and | ||
(B) $500 for each violation of this chapter. | ||
Sec. 397.103. ACTION BY ATTORNEY GENERAL. (a) The | ||
attorney general may bring an action on behalf of the state: | ||
(1) for injunctive relief to require compliance with | ||
this chapter; | ||
(2) to recover a civil penalty of $500 for each | ||
violation of this chapter; or | ||
(3) for both injunctive relief and to recover the | ||
civil penalty. | ||
(b) The attorney general is entitled to recover reasonable | ||
expenses incurred in obtaining injunctive relief or a civil | ||
penalty, or both, under this section, including court costs, | ||
reasonable attorney's fees, and investigatory costs. | ||
(c) The court may make such additional orders or judgments | ||
as are necessary to compensate identifiable persons for actual | ||
damages or to restore money or property, real or personal, that may | ||
have been acquired by means of any violation of this chapter. | ||
Damages may not include any damages incurred beyond a point two | ||
years before the institution of the action by the attorney general. | ||
Orders of the court may also include the appointment of a receiver | ||
or a sequestration of assets if a person who has been ordered by a | ||
court to make restitution under this section has failed to do so | ||
within three months after the order to make restitution has become | ||
final and nonappealable. | ||
(d) In bringing or participating in an action under this | ||
chapter, the attorney general acts in the name of the state and does | ||
not establish an attorney-client relationship with another person, | ||
including a person to whom the attorney general requests that the | ||
court award relief. | ||
SECTION 2. Title 2, Business & Commerce Code, is amended by | ||
adding Chapter 21 to read as follows: | ||
CHAPTER 21. EXECUTION OF DEEDS IN CERTAIN TRANSACTIONS INVOLVING | ||
RESIDENTIAL REAL ESTATE | ||
Sec. 21.001. DEFINITION. In this chapter, "residential | ||
real estate" means real property on which a dwelling designed for | ||
occupancy for one to four families is constructed or intended to be | ||
constructed. | ||
Sec. 21.002. PROHIBITION OF EXECUTION OF DEEDS CONVEYING | ||
RESIDENTIAL REAL ESTATE IN CERTAIN TRANSACTIONS. (a) A seller of | ||
residential real estate or a person who makes an extension of credit | ||
and takes a security interest or mortgage against residential real | ||
estate may not, before or at the time of the conveyance of the | ||
residential real estate to the purchaser or the extension of credit | ||
to the borrower, request or require the purchaser or borrower to | ||
execute and deliver to the seller or person making the extension of | ||
credit a deed conveying the residential real estate to the seller or | ||
person making the extension of credit. | ||
(b) A deed executed in violation of this section is voidable | ||
unless a subsequent purchaser of the residential real estate, for | ||
valuable consideration, obtains an interest in the property after | ||
the deed was recorded without notice of the violation, including | ||
notice provided by actual possession of the property by the grantor | ||
of the deed. The residential real estate continues to be subject to | ||
the security interest of a creditor who, without notice of the | ||
violation, granted an extension of credit to a borrower based on the | ||
deed executed in violation of this section. | ||
(c) A purchaser or borrower must bring an action to void a | ||
deed executed in violation of this section not later than the fourth | ||
anniversary of the date the deed was recorded. | ||
Sec. 21.003. CIVIL ACTION FOR DAMAGES. A person who | ||
violates Section 21.002 is liable to the purchaser or borrower for: | ||
(1) actual damages; | ||
(2) exemplary damages in an amount equal to or greater | ||
than $5,000 and not more than three times the amount of actual | ||
damages; | ||
(3) court costs; and | ||
(4) reasonable attorney's fees. | ||
SECTION 3. Section 24.004, Property Code, is amended to | ||
read as follows: | ||
Sec. 24.004. JURISDICTION; DISMISSAL. (a) Except as | ||
provided by Subsection (b), a [ |
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which the real property is located has jurisdiction in eviction | ||
suits. Eviction suits include forcible entry and detainer and | ||
forcible detainer suits. | ||
(b) A justice court does not have jurisdiction in a forcible | ||
entry and detainer or forcible detainer suit and shall dismiss the | ||
suit if the defendant files a sworn statement alleging the suit is | ||
based on a deed executed in violation of Chapter 21, Business & | ||
Commerce Code. | ||
SECTION 4. This Act takes effect September 1, 2011. |