74R11633 E
By Jones of Lubbock H.B. No. 2163
Substitute the following for H.B. No. 2163:
By Elkins C.S.H.B. No. 2163
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to loan processing and preparation fees.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section (8), Article 3.15, Title 79, Revised
1-5 Statutes (Article 5069-3.15, Vernon's Texas Civil Statutes), is
1-6 amended to read as follows:
1-7 (8) In addition to the authorized charges provided in this
1-8 chapter no further or other charge or amount whatsoever shall be
1-9 directly<, or indirectly,> charged, contracted for, or received by
1-10 the lender. This includes <(but is not limited by)> all charges
1-11 such as fees, compensation, bonuses, commissions, brokerage,
1-12 discounts, <expenses> and every other charge of any nature
1-13 whatsoever<, whether of the types listed herein or not>. Without
1-14 limitation of the foregoing, such charges may be any form of costs
1-15 or compensation whether contracted for or not, received by the
1-16 lender, <or any other person,> in connection with (a) the
1-17 investigating, arranging, negotiation, procuring, guaranteeing,
1-18 making, servicing, collecting or enforcing of a loan; or (b) for
1-19 the forbearance of money<, credit, goods or things in action; or
1-20 (c) for any other service or services performed or offered>.
1-21 However, (a) brokerage fees, discount fees, and fees for the
1-22 investigating, arranging, negotiation, procuring, guaranteeing,
1-23 making, servicing, collecting, or enforcing of a loan that are paid
1-24 to a disinterested third party are exempt from this Chapter and are
2-1 not interest; and (b) the prohibition set out herein shall not
2-2 apply to a fee not to exceed $25 to defray the costs necessary to
2-3 prepare or process a loan; a fee contracted for or paid to a third
2-4 party who has no ownership interest in the lender, unless the
2-5 lender is a state or nationally chartered bank and the person
2-6 receiving the fee has an ownership interest of less than five
2-7 percent in the bank and does not serve as an officer or director of
2-8 the bank; amounts actually incurred by an authorized lender as
2-9 court costs; attorney fees assessed by a court; lawful fees for
2-10 filing, recording, or releasing in any public office any security
2-11 for a loan; the reasonable cost actually expended for repossessing,
2-12 storing, preparing for sale, or selling any security; or fees for
2-13 noting a lien on or transferring a certificate of title to any
2-14 motor vehicle offered as security for a loan made under this
2-15 Chapter, or premiums or identifiable charge received in connection
2-16 with the sale of insurance authorized under this Chapter.
2-17 SECTION 2. Section (7), Article 4.01, Title 79, Revised
2-18 Statutes (Article 5069-4.01, Vernon's Texas Civil Statutes), is
2-19 amended to read as follows:
2-20 (7) In addition to the authorized charges provided in this
2-21 Chapter no further or other charge or amount whatsoever shall be
2-22 directly<, or indirectly,> charged, contracted for, or received by
2-23 the lender. This includes <(but is not limited by)> all charges
2-24 such as fees, compensation, bonuses, commissions, brokerage,
2-25 discounts, <expenses> and every other charge of any nature
2-26 whatsoever<, whether of the types listed herein or not>. Without
2-27 limitation of the foregoing, such charges may be any form of costs
3-1 or compensation whether contracted for or not, received by the
3-2 lender, <or any other person,> in connection with (a) the
3-3 investigating, arranging, negotiation, procuring, guaranteeing,
3-4 making, servicing, collecting or enforcing of a loan; or (b) for
3-5 the forbearance of money<, credit, goods or things in action; or
3-6 (c) for any other service or services performed or offered>.
3-7 However, (a) brokerage fees, discount fees, and fees for the
3-8 investigating, arranging, negotiation, procuring, guaranteeing,
3-9 making, servicing, collecting, or enforcing of a loan that are paid
3-10 to a disinterested third party are exempt from this Chapter and are
3-11 not interest; and (b) the prohibition set out herein shall not
3-12 apply to a fee not to exceed $25 to defray the costs necessary to
3-13 prepare or process a loan; a fee contracted for or paid to a third
3-14 party who has no ownership interest in the lender, unless the
3-15 lender is a state or nationally chartered bank and the person
3-16 receiving the fee has an ownership interest of less than five
3-17 percent in the bank and does not serve as an officer or director of
3-18 the bank; amounts actually incurred by a lender as court costs,
3-19 attorney fees assessed by a court, lawful fees for filing,
3-20 recording, or releasing to any public office any instrument
3-21 securing a loan; the reasonable cost actually expended for
3-22 repossessing, storing, preparing for sale, or selling any security;
3-23 or fees for noting a lien on or transferring a certificate of title
3-24 to any motor vehicle offered as security for a loan made under this
3-25 Chapter, or premiums or identifiable charge received in connection
3-26 with the sale of insurance authorized under this Chapter.
3-27 SECTION 3. Section (7), Article 5.02, Title 79, Revised
4-1 Statutes (Article 5069-5.02, Vernon's Texas Civil Statutes), is
4-2 amended to read as follows:
4-3 (7) In addition to the authorized charges provided in the
4-4 Chapter no further or other charge or amount whatsoever shall be
4-5 directly<, or indirectly,> charged, contracted for, or received by
4-6 the lender. This includes <(but is not limited by)> all charges
4-7 such as fees, compensation, bonuses, commissions, brokerage,
4-8 discounts, <expenses> and every other charge of any nature
4-9 whatsoever<, whether of the types listed herein or not>. Without
4-10 limitation of the foregoing, such charges may be any form of costs
4-11 or compensation whether contracted for or not, received by the
4-12 lender, <or any other person,> in connection with (a) the
4-13 investigating, arranging, negotiation, procuring, guaranteeing,
4-14 making, servicing, collecting or enforcing a loan; or (b) for the
4-15 forbearance of money. However, brokerage fees, discount fees, and
4-16 fees for the investigating, arranging, negotiation, procuring,
4-17 guaranteeing, making, servicing, collecting, or enforcing of a loan
4-18 that are paid to a disinterested third party are exempt from this
4-19 Chapter and are not interest<, credit, goods or things in action;
4-20 or (c) for any other service or services performed or offered>. A
4-21 secondary mortgage loan lender or an assignee of a secondary
4-22 mortgage loan may collect on or before the closing of a loan, or
4-23 include in the principal of the secondary mortgage loan, the
4-24 following:
4-25 (A) reasonable fees for title examination and
4-26 preparation of an abstract of title by an attorney not an employee
4-27 of the lender, or a title company or property search company
5-1 authorized to do business in this State; or premiums or fees for
5-2 title insurance or title search for the benefit of the mortgagee,
5-3 and, at mortgagor's option, title insurance or title search for the
5-4 benefit of the mortgagor;
5-5 (B) reasonable fees charged to the lender by an
5-6 attorney, provided the attorney is not a salaried employee of the
5-7 lender, for preparation of the loan documents in connection with
5-8 the mortgage loan, if the fees are evidenced by a statement for
5-9 services rendered addressed to the lender;
5-10 (C) charges prescribed by law that are or will be paid
5-11 to public officials for determining the existence of and for
5-12 perfecting, releasing, and satisfying a security interest;
5-13 (D) reasonable fees for an appraisal of real property
5-14 offered as security for the loan prepared by a certified appraiser
5-15 who is not an employee of the lender;
5-16 (E) reasonable cost of any credit report;
5-17 (F) reasonable fees for a survey of real property
5-18 offered as security for the loan prepared by a registered surveyor
5-19 who is not a salaried employee of the lender; <and>
5-20 (G) the premiums received in connection with the sale
5-21 of credit life insurance, credit accident and health insurance, and
5-22 insurance which protects the mortgagee in the event of default by
5-23 the mortgagor, the benefits of which go in whole or in part to
5-24 reduce or extinguish the loan balance. Premiums for property
5-25 insurance written in conformity with Section (2) of Article 5.03 of
5-26 this Title may be added to the loan contract;
5-27 (H) reasonable fees in an amount not to exceed $25 to
6-1 defray the costs necessary to prepare or process a loan; and
6-2 (I) any fee contracted for and disclosed in a
6-3 transaction in which the consumer has a three-day right of
6-4 recision, such as a fee charged by a credit services organization
6-5 registered under Chapter 18, Business & Commerce Code.
6-6 In addition, the contract for a secondary mortgage loan may
6-7 provide for:
6-8 (A) reasonable fees or charges paid to the trustee in
6-9 connection with a deed of trust or similar instrument executed in
6-10 connection with the secondary mortgage loan, including but not
6-11 limited to fees for enforcing the lien, posting for sale, selling,
6-12 or releasing the property secured by the deed of trust;
6-13 (B) reasonable fees paid to an attorney who is not an
6-14 employee of the creditor in the collection of a delinquent
6-15 secondary mortgage loan and any court costs and fees incurred in
6-16 the collection of, or foreclosure of, any lien created by the loan;
6-17 (C) a fee of Fifteen Dollars or less for the return by
6-18 a depository institution of a dishonored check, negotiable order of
6-19 withdrawal, or share draft offered in full or partial payment of a
6-20 secondary mortgage loan.
6-21 SECTION 4. This Act takes effect September 1, 1995.
6-22 SECTION 5. The importance of this legislation and the
6-23 crowded condition of the calendars in both houses create an
6-24 emergency and an imperative public necessity that the
6-25 constitutional rule requiring bills to be read on three several
6-26 days in each house be suspended, and this rule is hereby suspended.