1-1                                   AN ACT

 1-2     relating to a mortgage guaranty insurance policy.

 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-4           SECTION 1.  Article 21.50, Insurance Code, is amended by

 1-5     adding Section 1B to read as follows:

 1-6           Sec. 1B.  NOTICE TO BORROWER.  (a)  A lender that requires a

 1-7     borrower to purchase mortgage guaranty insurance shall provide

 1-8     annually to the borrower a copy of the following written notice

 1-9     printed in at least 10-point bold-faced type:

1-10           "NOTICE OF RIGHT TO CANCEL PRIVATE MORTGAGE INSURANCE:  If

1-11     you currently pay private mortgage insurance premiums, you may have

1-12     the right to cancel the insurance and cease paying premiums.  This

1-13     would permit you to make a lower total monthly mortgage payment and

1-14     to possibly receive a refund of any unearned premiums on the

1-15     policy.  In most cases, you have the right to cancel private

1-16     mortgage insurance if the principal balance of your loan is 80

1-17     percent or less of the current fair market appraised value of your

1-18     home.  If you want to learn whether you are eligible to cancel this

1-19     insurance, please contact us at (address and telephone number of

1-20     lender) or the Texas Department of Insurance consumer help line at

1-21     (the appropriate toll-free telephone number)."

1-22           (b)  If a lender receives a refund of an unearned mortgage

1-23     guaranty insurance premium paid by a borrower, the lender shall

1-24     remit the refund to the borrower not later than the 10th business

 2-1     day after the date on which the lender receives the refund.

 2-2           (c)  If federal law requires a lender to provide a borrower

 2-3     with a written notice containing substantially the same information

 2-4     required by Subsection (a) of this section, a lender who provides

 2-5     the notice required by federal law within the period prescribed by

 2-6     federal law satisfies the notice requirement of Subsection (a)  of

 2-7     this section.

 2-8           (d)  In this section, "lender" has the meaning assigned by

 2-9     Section 1(1), Article 21.48A, of this code.

2-10           SECTION 2.  This Act takes effect January 1, 1998.

2-11           SECTION 3.  The importance of this legislation and the

2-12     crowded condition of the calendars in both houses create an

2-13     emergency and an imperative public necessity that the

2-14     constitutional rule requiring bills to be read on three several

2-15     days in each house be suspended, and this rule is hereby suspended.

         _______________________________     _______________________________

             President of the Senate              Speaker of the House

               I certify that H.B. No. 1755 was passed by the House on May

         8, 1997, by a non-record vote; and that the House concurred in

         Senate amendments to H.B. No. 1755 on May 24, 1997, by a non-record

         vote.

                                             _______________________________

                                                 Chief Clerk of the House

               I certify that H.B. No. 1755 was passed by the Senate, with

         amendments, on May 21, 1997, by a viva-voce vote.

                                             _______________________________

                                                 Secretary of the Senate

         APPROVED:  _____________________

                            Date

                    _____________________

                          Governor