By Goodman H.B. No. 2735 74R6216 DWS-F A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to preparation of certain secondary loan documents by an 1-3 attorney. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. Chapter 5, Title 79, Revised Statutes (Article 1-6 5069-5.01 et seq., Vernon's Texas Civil Statutes), is amended by 1-7 adding Article 5.04A to read as follows: 1-8 Art. 5.04A. DOCUMENT PREPARATION BY ATTORNEY. (a) A 1-9 document that is prepared in connection with a secondary mortgage 1-10 loan and that affects title to real property may be prepared only 1-11 by an attorney who is licensed by and resides in this state and who 1-12 is not an employee of the lender. For the purposes of this 1-13 article, "employee" means a person who receives a salary for 1-14 performing services under the direction of the lender and does not 1-15 include an independent contractor. 1-16 (b) A deed of trust or other security instrument prepared in 1-17 connection with a secondary mortgage loan must contain a notice of 1-18 the attorney or law firm that prepared the document. The notice 1-19 must be in at least 10-point bold type or its equivalent and must 1-20 be in the following form with the blanks appropriately filled: 1-21 NOTICE 1-22 Your loan documents have been prepared by the following 1-23 attorney or law firm: ______________________________. 1-24 The business address of the attorney or firm 2-1 is _________________________________________. 2-2 The telephone number of the attorney or firm 2-3 is _________________________________________. 2-4 If you have a question regarding the terms and 2-5 conditions of this document, call the following 2-6 person at the office of the attorney or 2-7 firm: ___________________________. 2-8 You may call between ___a.m. and ___p.m. on the 2-9 following days: ____________________________________ . 2-10 If you sign this document and you fail to meet the 2-11 terms and conditions of this document, you may lose 2-12 your legal ownership rights in your home. KNOW YOUR 2-13 RIGHTS AND DUTIES UNDER THE LAW. 2-14 (c) A deed of trust or other security instrument that does 2-15 not contain the notice required by this article is not notice of 2-16 the security interest created by the document to persons who are 2-17 not parties to the document, except that if other requirements for 2-18 the document to be notice are satisfied, the document becomes 2-19 notice to those persons when a copy of the notice required by this 2-20 article, signed by the borrower, is recorded with the document. 2-21 SECTION 2. This Act applies only to a document executed on 2-22 or after the effective date of this Act. A document executed 2-23 before the effective date of this Act is covered by the law in 2-24 effect when the document was executed, and the former law is 2-25 continued in effect for that purpose. 2-26 SECTION 3. This Act takes effect September 1, 1995. 2-27 SECTION 4. The importance of this legislation and the 3-1 crowded condition of the calendars in both houses create an 3-2 emergency and an imperative public necessity that the 3-3 constitutional rule requiring bills to be read on three several 3-4 days in each house be suspended, and this rule is hereby suspended.