By: Lucio, Carona	S.B. No. 1319

	A BILL TO BE ENTITLED
	AN ACT
	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 [A] justice court in the precinct in
	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.