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.