The bill would amend the Finance Code to define a wrap mortgage loan and to prohibit a person from originating or making a wrap mortgage loan unless the person possesses certain licensures. The bill would allow a wrap mortgage borrower to bring legal action to obtain declaratory or injunctive relief, recover actual damages, or pursue other remedies in relation to their loan. In addition, bill would allow the Department of Savings and Mortgage Lending (DSML) to investigate a wrap lender to determine whether the lender is in compliance with statute. If not, provisions in the bill would grant DSML the authority to issue a cease and desist order and to impose an administrative penalty.
Unless otherwise specified, the bill would take effect on January 1, 2022.
It is assumed that the costs associated with the bill's provisions relating to residential mortgage loans could be absorbed using existing resources. The Department of Savings and Mortgage Lending (DSML) collects revenues sufficient to fully fund its own operations and does not receive general revenue appropriations. The agency estimates costs totaling $258,892 over the 2022-23 biennium for increases in travel, investigation activities, and salaries for 2.0 additional full-time equivalents related to the bill. DSML revenue sources, including licensing fees, may be adjusted to collect enough revenue to fund these items.
Other affected agencies anticipate that any legal work resulting from the passage of this bill could be absorbed with current appropriations.
No fiscal implication to units of local government is anticipated.