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House Bill 2779 |
House Author: Truitt |
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Effective: 4-1-10 |
Senate Sponsor: Wentworth |
House Bill 2779 amends the Finance Code to provide for the regulation of certain mortgage banker employees who are residential mortgage loan originators by the savings and mortgage lending commissioner of the Finance Commission of Texas. The bill requires the finance commission to adopt rules for the registration of mortgage brokers in accordance with the intentions of the federal Secure and Fair Enforcement (S.A.F.E.) for Mortgage Licensing Act of 2008 and sets out licensure requirements for a residential mortgage loan originator. The bill requires a residential mortgage loan originator, in addition to other requirements, to be licensed by the finance commission, to be enrolled with the Nationwide Mortgage Licensing System and Registry, and to comply with the requirements of the Texas Secure and Fair Enforcement (S.A.F.E.) for Mortgage Licensing Act of 2009 and rules adopted by the finance commission under that act.
House Bill 2779 sets out provisions relating to license application, fees, and denial. The bill provides that a person whose appeal is denied is not eligible to be licensed for two years after the denial is final, but it permits the finance commission to shorten this time. It provides for license renewal and provisional and probationary licenses. The bill requires a mortgage banker to file with the commissioner annually a confidential call report stating the condition of the mortgage banker and the mortgage banker's operations and including financial statements and production activity volumes.
House Bill 2779 authorizes the commissioner to conduct an inspection or investigation of a residential mortgage loan originator to ensure compliance with commission rules adopted under the Mortgage Banker Registration and Residential Mortgage Loan Originator License Act and the Texas S.A.F.E. Mortgage Licensing Act of 2009 and sets forth procedures for an inspection or investigation. It also authorizes the commissioner to conduct an undercover investigation if necessary to prevent immediate harm and carry out purposes of finance commission rules. The bill specifies that information obtained in an investigation is confidential, unless otherwise provided by law, but grants the commissioner discretion in sharing the information with a state or federal agency if the commissioner determines there is a valid reason for doing so. The bill gives the commissioner subpoena authority and the authority to petition a Travis County district court to enforce the subpoena.
House Bill 2779 authorizes the commissioner to impose an administrative penalty capped at $2,500 per day and order other disciplinary action and, if there is reasonable cause, to issue without notice and hearing a cease and desist order. The bill provides that a person against whom such an order is issued is entitled to a hearing before the commissioner or an administrative law judge. The bill authorizes the commissioner to impose an administrative penalty capped at $1,000 for each day of a cease and desist order violation. The bill authorizes the commissioner, with at least a 10-day notice to the residential mortgage loan originator, to suspend the residential mortgage loan originator's license without a hearing if the residential mortgage loan originator fails to pay an administrative penalty that has become final or fails to comply with an order of the commissioner that has become final. The bill authorizes an appeal of this order of suspension and provides for the procedure and conditions of such an appeal.
House Bill 2779 authorizes the commissioner to order a residential mortgage loan originator to make restitution for any amount received in violation of the Mortgage Banker Registration and Residential Mortgage Loan Originator License Act. It authorizes a residential mortgage loan applicant injured by a residential mortgage loan originator's violation of the Mortgage Banker Registration and Residential Mortgage Loan Originator License Act to bring an action for recovery of actual monetary damages, reasonable attorney's fees, and court costs and authorizes the commissioner, the attorney general, or a residential mortgage loan applicant to bring an action to enjoin a violation of the act by a residential mortgage loan originator. The bill places the burden of proving an exemption in a proceeding or action on the person claiming the benefit of the exemption.
House Bill 2779 provides that on disbursement of mortgage proceeds to or on behalf of the residential mortgage loan applicant, the residential mortgage loan originator who assisted the applicant in obtaining the loan is considered to have completed the performance of services for the applicant and owes no additional duties or obligations to the loan applicant. The bill creates a Class B misdemeanor offense for a person who is an employee of a mortgage banker and not exempt under the Mortgage Banker Registration and Residential Mortgage Loan Originator License Act and who acts as a residential mortgage loan originator without first obtaining a license, and it enhances the penalty for a subsequent conviction for such an offense to a Class A misdemeanor. The bill authorizes the commissioner to issue without notice and hearing a cease and desist order against an unlicensed person who the commissioner has reasonable cause to believe has engaged in, or is about to engage in, an act or practice for which a license is required. The bill authorizes the commissioner to assess an administrative penalty capped at $1,000 per day for each such violation. The bill sets out provisions and requirements for a hearing if requested by a person against whom such a cease and desist order is made.
House Bill 2779 provides that certain employees of mortgage bankers are not required to comply with the residential mortgage loan originator licensing requirements until the later of July 31, 2010, or a subsequent date that is approved by the secretary of the U.S. Department of Housing and Urban Development under the authority granted under the federal S.A.F.E. Mortgage Licensing Act of 2008.
House Bill 2779 also amends Finance Code provisions relating to the regulation of mortgage bankers. The bill requires mortgage bankers to submit a list of the banker's employees who are residential mortgage loan originators along with the statement the banker is required to file with the savings and mortgage lending commissioner in order to register under the Mortgage Banker Registration and Residential Mortgage Loan Originator License Act. The bill adds to the grounds on which the savings and mortgage lending commissioner, after considering a complaint, may revoke a mortgage banker's registration the commissioner's conclusion that the banker has engaged in a negligent course of conduct exhibited through pattern or practice.