By Combs H.B. No. 725 74R77 DWS-D A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to the transfer of rights under certain residential 1-3 mortgage loan contracts. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. Title 132, Revised Statutes, is amended by adding 1-6 Article 9029 to read as follows: 1-7 Art. 9029. TRANSFER OF LENDER'S RIGHTS UNDER REAL ESTATE 1-8 LOAN 1-9 Sec. 1. A lender may not transfer the lender's rights under 1-10 a contract for a loan secured by residential real property to 1-11 another person, firm, or corporation before the 61st day after the 1-12 date that the borrower receives from the lender written notice of 1-13 the lender's intent to transfer those rights. The notice must be 1-14 sent by United States mail not later than the 10th day after the 1-15 date that the lender and transferee agree to the transfer and must 1-16 state: 1-17 (1) the date the transfer is to occur; 1-18 (2) the name and mailing address of the transferee; 1-19 (3) the amount to be paid for the transfer of the 1-20 rights; and 1-21 (4) that the borrower may satisfy all the borrower's 1-22 obligations under the loan contract by paying the amount stated 1-23 under Subdivision (3) of this section to the lender before the date 1-24 the transfer is to occur. 2-1 Sec. 2. On or after the date the notice is received and 2-2 before the date of the transfer of the lender's rights, the 2-3 borrower is entitled to pay the lender by cashier's check the 2-4 amount stated in the notice, notwithstanding any contrary 2-5 contractual provision. Payment under this section satisfies all of 2-6 the borrower's obligations under the contract. The lender may not 2-7 impose on the borrower a fee or other penalty for payment under 2-8 this section. 2-9 Sec. 3. If the borrower does not exercise the borrower's 2-10 right under Section 2 of this article and the lender makes the 2-11 transfer for an amount that is less than the amount stated in the 2-12 notice, the lender is liable to the borrower for an amount equal to 2-13 the difference between the amount paid for the transfer and the 2-14 amount stated in the notice. 2-15 Sec. 4. A transfer of a lender's rights made without notice 2-16 as required by Section 1 of this article is void. 2-17 SECTION 2. This Act takes effect September 1, 1995, and 2-18 applies only to contracts entered on or after that date. 2-19 SECTION 3. The importance of this legislation and the 2-20 crowded condition of the calendars in both houses create an 2-21 emergency and an imperative public necessity that the 2-22 constitutional rule requiring bills to be read on three several 2-23 days in each house be suspended, and this rule is hereby suspended.