BILL ANALYSIS H.B. 2487 By: Gutierrez (Rosson) Economic Development 5-24-95 Senate Committee Report (Unamended) BACKGROUND Federal law, particularly as expanded by the Riegle Community Development and Regulatory Improvement Act of 1994, requires lenders to obtain or have the borrower obtain flood insurance where such is available. Under current law, secondary mortgage loans made under Article 5069-5.02, V.T.C.S., grant no authorization for the lender to charge directly or indirectly the required determination fee for flood insurance. PURPOSE As proposed, H.B. 2487 authorizes a secondary mortgage loan lender or an assignee of a secondary mortgage loan to collect on or before the closing of a loan, or include in the principal of the secondary mortgage loan, reasonable fees relating to real property offered as security for the loan that are incurred to comply with a federally mandated program. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section (7), Article 5069-5.02, V.T.C.S., to authorize a secondary mortgage loan lender or an assignee of a secondary mortgage loan to collect on or before the closing of a loan, or include in the principal of the secondary mortgage loan, among other items, reasonable fees relating to real property offered as security for the loan that are incurred to comply with a federally mandated program, if the collection of the fees or the participation in the program is required by a federal agency. SECTION 2. Effective date: September 1, 1995. SECTION 3. Emergency clause.