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Senate Bill 762 |
Senate Author: Carona |
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Effective: 9-1-11 |
House Sponsor: Paxton |
Previous law relating to the transfer of a property tax lien and a tax collector's certification following such a transfer required the collector to certify in one document the transfer of the liens for all the taxes if the property owner has executed an authorization consenting to a transfer of the tax liens for both delinquent and non-delinquent taxes on the property. Senate Bill 762 amends the Tax Code to authorize, rather than require, the certification to be in one document.
The bill prohibits a transferee of a tax lien from charging a fee for any expenses arising after closing, with certain exceptions. The bill authorizes the contract between the property owner and the transferee to provide for interest for default, in addition to interest charged on funds advanced, if any part of the installment remains unpaid after the 10th day after the date the installment is due. If the lien transferred is on residential property owned and used by the property owner for personal, family, or household purposes, the additional interest is capped at five cents for each $1 of a scheduled installment. The bill exempts a transferee from being required to release payoff information following notice of a delinquency of an obligation secured by a preexisting first lien on property unless the notice contains the information prescribed by the Finance Commission of Texas. The bill removes the limit on attorney's fees a transferee is entitled to recover if a foreclosure suit results in foreclosure of the lien.
Senate Bill 762 amends the Finance Code to authorize the contract between a property tax lender and a property owner to require the property owner to pay certain specified costs after closing. The bill requires a property tax lender to provide a property owner one free copy of the transaction documents at closing and an additional free copy on the property owner's request following closing. A property tax lender may not charge any fee, other than interest, after closing in connection with the transfer of a tax lien unless the fee is expressly authorized under certain provisions of the bill, nor any interest that is not expressly authorized under the Tax Code provisions relating to tax lien transfers. The bill requires any amount charged by a property tax lender after closing to be for services performed by a person that is not a lender employee, with certain exceptions. The bill authorizes the finance commission to adopt rules implementing and interpreting the Finance Code provisions relating to authorized charges.
The bill authorizes the consumer credit commissioner to assess an administrative penalty against a transferee who violates a Tax Code requirement to send, in the time and manner specified, to any mortgage servicer and to each holder of a recorded first lien encumbering the property a copy of the property owner's sworn document authorizing another person to pay the property taxes on the person's property, regardless of whether the violation is knowing or wilful.
The bill requires the finance commission to study the expenses charged to property owners by property tax lenders in conjunction with the transfer of property tax liens and the payoff of loans secured by such liens and to report the findings to the legislature not later than June 1, 2012.