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Senate Bill 1124 |
Senate Author: Carona |
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Effective: See below |
House Sponsor: Truitt et al. |
Senate Bill 1124, pursuant to the Texas Secure and Fair Enforcement for Mortgage Licensing Act of 2009, amends Finance Code provisions relating to the licensing and regulation of certain persons involved in residential mortgage lending. Among other provisions, the bill also:
· renames the Mortgage Broker License Act as the Residential Mortgage Loan Company and Residential Mortgage Loan Originator Licensing and Registration Act (the act);
· makes the licensing and registration procedures and other provisions established by previous law applicable instead to residential mortgage loan originators and residential mortgage loan companies, as applicable;
· adjusts the membership of the mortgage industry advisory committee;
· prohibits an exclusive agent of a registered financial services company from acting or attempting to act as a residential mortgage loan originator unless the exclusive agent at the time is licensed and sponsored by a registered financial services company and is acting for the company;
· requires a residential mortgage loan originator to be sponsored by at least one residential mortgage loan company;
· establishes a list of individuals and entities who are exempt from application of the Residential Mortgage Loan Company and Residential Mortgage Loan Originator Licensing and Registration Act and authorizes the finance commission to grant certain exemptions from the residential mortgage loan originator licensing requirements;
· establishes the qualifications and requirements for a mortgage company license, a credit union subsidiary organization license, and an auxiliary mortgage loan activity company license, each of which authorizes the holder to act as a residential mortgage loan originator on residential real estate located in Texas;
· establishes the qualifications and requirements for an independent contractor loan processor or underwriter company license;
· establishes the qualifications and requirements for the issuance of a financial services company registration and financial services company exclusive agent license;
· revises provisions relating to the term of validity, imposition of fees, renewal, and reinstatement of a license issued under the act;
· establishes office location requirements for a residential mortgage loan company;
· revises the reporting requirements for each licensed residential mortgage loan company or licensed residential mortgage loan originator; and
· increases the cap on the amount of an administrative penalty for each violation for a license holder under the act and authorizes the savings and mortgage lending commissioner to rescind or vacate any revocation order previously issued under that act.
Senate Bill 1124 requires the savings and mortgage lending commissioner to establish, administer, and maintain one recovery fund for the purposes of reimbursing residential mortgage loan applicants for actual damages incurred because of acts committed by licensed residential mortgage loan originators when the act was committed and requires an application for a residential mortgage loan originator license to be accompanied by a recovery fund fee. The bill authorizes the commissioner to revoke or suspend a license issued under both the act and the Mortgage Banker Registration and Residential Mortgage Loan Originator License Act on proof that the commissioner has made a payment from the recovery fund of any amount toward satisfaction of a claim against a licensed residential mortgage loan originator. The bill authorizes the commissioner to seek to collect from the residential mortgage loan originator the amount paid from the fund on behalf of the residential mortgage loan originator and certain other costs and interest, to be deposited to the credit of the recovery fund.
Senate Bill 1124 revises the registration requirements for a mortgage banker, specifies that the registration of a mortgage banker is valid on approval of the commissioner and may be denied if the commissioner determines that the mortgage banker does not meet those requirements, and establishes reinstatement and annual registration renewal requirements and procedures. The bill requires a mortgage banker that is a residential mortgage loan originator to include a specified disclosure statement regarding complaints and recovery fund claims to a residential mortgage loan applicant with an application for a residential mortgage loan and requires the finance commission by rule to adopt a standard form to be used by the mortgage banker. The bill prohibits an employee of a mortgage banker from acting in the capacity of a residential mortgage loan originator unless the employee is, among other requirements, sponsored by a registered mortgage banker, revises the eligibility requirements for an employee of a mortgage banker to be eligible for licensure as a residential mortgage loan originator, and requires a mortgage banker employee who is a residential mortgage loan originator to notify the commissioner of a change of sponsorship. The bill also requires each mortgage banker to file a mortgage call report as frequently as required by the Nationwide Mortgage Licensing System and Registry, increases the cap on the penalty amount for a violation under the Mortgage Banker Registration and Residential Mortgage Loan Originator License Act, and authorizes the commissioner to rescind or vacate any cease and desist order previously issued under that act.
Senate Bill 1124 expands the list of entities that are exempt from the Texas Secure and Fair Enforcement for Mortgage Licensing Act of 2009 and authorizes the finance commission to grant an exemption from the licensing requirements of that act to certain entities administering the Texas HOME Investment Partnerships program. The bill also exempts from that act certain individuals who, in any 12-consecutive-month period, originate five or fewer closed residential mortgage loans exclusively for a single federally chartered depository institution. Instead, such an individual is required to enroll as a financial exclusive agent with the Department of Savings and Mortgage Lending until the time any registration with the Nationwide Mortgage Licensing System and Registry is required for that individual and a suitable category is created for that registration. The bill requires an individual who fails to maintain a residential mortgage loan originator license for at least five consecutive years to retake the prelicensing education requirements prescribed by the S.A.F.E. Mortgage Licensing Act. The bill takes effect September 1, 2011, except for provisions relating to the requirement that certain individuals enroll as a financial exclusive agent with the Department of Savings and Mortgage Lending, which take effect November 1, 2011.