By Jones of Lubbock                                   H.B. No. 2163
       74R7713 CLG-F
                                 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.
   1-10  This includes (but is not limited by) all charges such as fees,
   1-11  compensation, bonuses, commissions, brokerage, discounts, expenses
   1-12  and every other charge of any nature whatsoever, whether of the
   1-13  types listed herein or not.  Without limitation of the foregoing,
   1-14  such charges may be any form of costs or compensation whether
   1-15  contracted for or not, received by the lender, or any other person,
   1-16  in connection with (a) the investigating, arranging, negotiation,
   1-17  procuring, guaranteeing, making, servicing, collecting or enforcing
   1-18  of a loan; or (b) for the forbearance of money, credit, goods or
   1-19  things in action; or (c) for any other service or services
   1-20  performed or offered.  However, the prohibition set out herein
   1-21  shall not apply to a fee not to exceed $25 to defray the costs
   1-22  necessary to prepare or process a loan application; amounts
   1-23  actually incurred by an authorized lender as court costs; attorney
   1-24  fees assessed by a court; lawful fees for filing, recording, or
    2-1  releasing in any public office any security for a loan; the
    2-2  reasonable cost actually expended for repossessing, storing,
    2-3  preparing for sale, or selling any security; or fees for noting a
    2-4  lien on or transferring a certificate of title to any motor vehicle
    2-5  offered as security for a loan made under this Chapter, or premiums
    2-6  or identifiable charge received in connection with the sale of
    2-7  insurance authorized under this Chapter.
    2-8        SECTION 2.  Section (7), Article 4.01, Title 79, Revised
    2-9  Statutes (Article 5069-4.01, Vernon's Texas Civil Statutes), is
   2-10  amended to read as follows:
   2-11        (7)  In addition to the authorized charges provided in this
   2-12  Chapter no further or other charge or amount whatsoever shall be
   2-13  directly, or indirectly, charged, contracted for, or received.
   2-14  This includes (but is not limited by) all charges such as fees,
   2-15  compensation, bonuses, commissions, brokerage, discounts, expenses
   2-16  and every other charge of any nature whatsoever, whether of the
   2-17  types listed herein or not.  Without limitation of the foregoing,
   2-18  such charges may be any form of costs or compensation whether
   2-19  contracted for or not, received by the lender, or any other person,
   2-20  in connection with (a) the investigating, arranging, negotiation,
   2-21  procuring, guaranteeing, making, servicing, collecting or enforcing
   2-22  of a loan; or (b) for the forbearance of money, credit, goods or
   2-23  things in action; or (c) for any other service or services
   2-24  performed or offered.  However, the prohibition set out herein
   2-25  shall not apply to a fee not to exceed $25 to defray the costs
   2-26  necessary to prepare or process a loan application; amounts
   2-27  actually incurred by a lender as court costs, attorney fees
    3-1  assessed by a court, lawful fees for filing, recording, or
    3-2  releasing to any public office any instrument securing a loan; the
    3-3  reasonable cost actually expended for repossessing, storing,
    3-4  preparing for sale, or selling any security; or fees for noting a
    3-5  lien on or transferring a certificate of title to any motor vehicle
    3-6  offered as security for a loan made under this Chapter, or premiums
    3-7  or identifiable charge received in connection with the sale of
    3-8  insurance authorized under this Chapter.
    3-9        SECTION 3.  Section (7), Article 5.02, Title 79, Revised
   3-10  Statutes (Article 5069-5.02, Vernon's Texas Civil Statutes), is
   3-11  amended to read as follows:
   3-12        (7)  In addition to the authorized charges provided in the
   3-13  Chapter no further or other charge or amount whatsoever shall be
   3-14  directly, or indirectly, charged, contracted for, or received.
   3-15  This includes (but is not limited by) all charges such as fees,
   3-16  compensation, bonuses, commissions, brokerage, discounts, expenses
   3-17  and every other charge of any nature whatsoever, whether of the
   3-18  types listed herein or not.  Without limitation of the foregoing,
   3-19  such charges may be any form of costs or compensation whether
   3-20  contracted for or not, received by the lender, or any other person,
   3-21  in connection with (a) the investigating, arranging, negotiation,
   3-22  procuring, guaranteeing, making, servicing, collecting or enforcing
   3-23  a loan; or (b) for the forbearance of money, credit, goods or
   3-24  things in action; or (c) for any other service or services
   3-25  performed or offered.  A secondary mortgage loan lender or an
   3-26  assignee of a secondary mortgage loan may collect on or before the
   3-27  closing of a loan, or include in the principal of the secondary
    4-1  mortgage loan, the following:
    4-2              (A)  reasonable fees for title examination and
    4-3  preparation of an abstract of title by an attorney not an employee
    4-4  of the lender, or a title company or property search company
    4-5  authorized to do business in this State; or premiums or fees for
    4-6  title insurance or title search for the benefit of the mortgagee,
    4-7  and, at mortgagor's option, title insurance or title search for the
    4-8  benefit of the mortgagor;
    4-9              (B)  reasonable fees charged to the lender by an
   4-10  attorney, provided the attorney is not a salaried employee of the
   4-11  lender, for preparation of the loan documents in connection with
   4-12  the mortgage loan, if the fees are evidenced by a statement for
   4-13  services rendered addressed to the lender;
   4-14              (C)  charges prescribed by law that are or will be paid
   4-15  to public officials for determining the existence of and for
   4-16  perfecting, releasing, and satisfying a security interest;
   4-17              (D)  reasonable fees for an appraisal of real property
   4-18  offered as security for the loan prepared by a certified appraiser
   4-19  who is not an employee of the lender;
   4-20              (E)  reasonable cost of any credit report;
   4-21              (F)  reasonable fees for a survey of real property
   4-22  offered as security for the loan prepared by a registered surveyor
   4-23  who is not a salaried employee of the lender; <and>
   4-24              (G)  the premiums received in connection with the sale
   4-25  of credit life insurance, credit accident and health insurance, and
   4-26  insurance which protects the mortgagee in the event of default by
   4-27  the mortgagor, the benefits of which go in whole or in part to
    5-1  reduce or extinguish the loan balance.  Premiums for property
    5-2  insurance written in conformity with Section (2) of Article 5.03 of
    5-3  this Title may be added to the loan contract; and
    5-4              (H)  reasonable fees in an amount not to exceed $25 to
    5-5  defray the costs necessary to prepare or process a loan
    5-6  application.
    5-7        In addition, the contract for a secondary mortgage loan may
    5-8  provide for:
    5-9              (A)  reasonable fees or charges paid to the trustee in
   5-10  connection with a deed of trust or similar instrument executed in
   5-11  connection with the secondary mortgage loan, including but not
   5-12  limited to fees for enforcing the lien, posting for sale, selling,
   5-13  or releasing the property secured by the deed of trust;
   5-14              (B)  reasonable fees paid to an attorney who is not an
   5-15  employee of the creditor in the collection of a delinquent
   5-16  secondary mortgage loan and any court costs and fees incurred in
   5-17  the collection of, or foreclosure of, any lien created by the loan;
   5-18              (C)  a fee of Fifteen Dollars or less for the return by
   5-19  a depository institution of a dishonored check, negotiable order of
   5-20  withdrawal, or share draft offered in full or partial payment of a
   5-21  secondary mortgage loan.
   5-22        SECTION 4.  This Act takes effect September 1, 1995.
   5-23        SECTION 5.  The importance of this legislation and the
   5-24  crowded condition of the calendars in both houses create an
   5-25  emergency and an imperative public necessity that the
   5-26  constitutional rule requiring bills to be read on three several
   5-27  days in each house be suspended, and this rule is hereby suspended.