SRC-SLL H.B. 1755 75(R)   BILL ANALYSIS


Senate Research Center   H.B. 1755
By: Burnam (Moncrief)
Economic Development
5-14-97
Engrossed


DIGEST 

Private mortgage insurance is usually required by mortgage lenders on any
home loan in which the borrower is unable to make a 20 percent down
payment.  The purpose of the insurance is to protect the lender against
any deficiency should there be a foreclosure.  Once the borrower's equity
in the home reaches 20 percent or more, most borrowers are able to cancel
the insurance.  Because lenders are not required to notify a homeowner
when the insurance becomes unnecessary, many homeowners continue to pay
for the coverage for the life of the mortgage.  This insurance can cost
homeowners between $20 and $100 a month.  This bill will provide
regulations regarding a mortgage guaranty insurance policy. 

PURPOSE

As proposed, H.B. 1755 provides regulations regarding a mortgage guaranty
insurance policy. 

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Article 21.50, Insurance Code, by adding Section 1B, as
follows: 

Sec.  1B.  NOTICE TO BORROWER.  Requires a lender that requires a borrower
to purchase mortgage guaranty insurance to provide annually to the
borrower a copy of a written notice printed in at least 10-point
bold-faced type containing certain information. Requires the lender, if a
lender receives a refund of an unearned mortgage guaranty insurance
premium paid by a borrower, to remit the refund to the borrower within a
certain time period.  Defines "lender." 

SECTION 2. Effective date: January 1, 1998.

SECTION 3. Emergency clause.