By: Carona S.B. No. 251
A BILL TO BE ENTITLED
AN ACT
1-1 relating to certain charges for the administration of loans and
1-2 loan applications.
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 amounts actually incurred by an authorized
1-22 lender as court costs; attorney fees assessed by a court; lawful
1-23 fees for filing, recording, or releasing in any public office any
2-1 security for a loan; the reasonable cost actually expended for
2-2 repossessing, storing, preparing for sale, or selling any security;
2-3 or fees for noting a lien on or transferring a certificate of title
2-4 to any motor vehicle offered as security for a loan made under this
2-5 Chapter, or premiums or identifiable charge received in connection
2-6 with the sale of insurance authorized under this Chapter; or, on a
2-7 loan made under this Chapter, an administrative fee not to exceed
2-8 $25 for a loan of more than $1,000 or $10 for a loan of $1,000 or
2-9 less which is considered earned at the time the loan is made or
2-10 refinanced, which is not subject to refund, which may not be
2-11 contracted for or received by the lender refinancing the loan more
2-12 than once in any 180-day period if the loan is refinanced, and for
2-13 which 50 cents of the fee charged is deposited with the comptroller
2-14 for the purpose of fulfilling the responsibilities of the Finance
2-15 Commission as required under Section 1.011(f), Texas Banking Act
2-16 (Article 342-1.011, Vernon's Texas Civil Statutes).
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.
2-23 This includes (but is not limited by) all charges such as fees,
2-24 compensation, bonuses, commissions, brokerage, discounts, expenses
2-25 and every other charge of any nature whatsoever, whether of the
3-1 types listed herein or not. Without limitation of the foregoing,
3-2 such charges may be any form of costs or compensation whether
3-3 contracted for or not, received by the lender, or any other person,
3-4 in connection with (a) the investigating, arranging, negotiation,
3-5 procuring, guaranteeing, making, servicing, collecting or enforcing
3-6 of a loan; or (b) for the forbearance of money, credit, goods or
3-7 things in action; or (c) for any other service or services
3-8 performed or offered. However, the prohibition set out herein
3-9 shall not apply to amounts actually incurred by a lender as court
3-10 costs, attorney fees assessed by a court, lawful fees for filing,
3-11 recording, or releasing to any public office any instrument
3-12 securing a loan; the reasonable cost actually expended for
3-13 repossessing, storing, preparing for sale, or selling any security;
3-14 or fees for noting a lien on or transferring a certificate of title
3-15 to any motor vehicle offered as security for a loan made under this
3-16 Chapter, or premiums or identifiable charge received in connection
3-17 with the sale of insurance authorized under this Chapter; or an
3-18 administrative fee not to exceed $25 for a loan of more than $1,000
3-19 or $10 for a loan of $1,000 or less which is considered earned at
3-20 the time the loan is made or refinanced, which is not subject to
3-21 refund, which may not be contracted for or received by the lender
3-22 refinancing the loan more than once in any 180-day period if the
3-23 loan is refinanced, and for which 50 cents of the fee charged is
3-24 deposited with the comptroller for the purpose of fulfilling the
3-25 responsibilities of the Finance Commission as required under
4-1 Section 1.011(f), Texas Banking Act (Article 342-1.011, Vernon's
4-2 Texas Civil Statutes).
4-3 SECTION 3. Section (7), Article 5.02, Title 79, Revised
4-4 Statutes (Article 5069-5.02, Vernon's Texas Civil Statutes), is
4-5 amended to read as follows:
4-6 (7) In addition to the authorized charges provided in the
4-7 Chapter no further or other charge or amount whatsoever shall be
4-8 directly, or indirectly, charged, contracted for, or received.
4-9 This includes (but is not limited by) all charges such as fees,
4-10 compensation, bonuses, commissions, brokerage, discounts, expenses
4-11 and every other charge of any nature whatsoever, whether of the
4-12 types listed herein or not. Without limitation of the foregoing,
4-13 such charges may be any form of costs or compensation whether
4-14 contracted for or not, received by the lender, or any other person,
4-15 in connection with (a) the investigating, arranging, negotiation,
4-16 procuring, guaranteeing, making, servicing, collecting or enforcing
4-17 a loan; or (b) for the forbearance of money, credit, goods or
4-18 things in action; or (c) for any other service or services
4-19 performed or offered. A secondary mortgage loan lender or an
4-20 assignee of a secondary mortgage loan may collect on or before the
4-21 closing of a loan, or include in the principal of the secondary
4-22 mortgage loan, the following:
4-23 (A) reasonable fees for title examination and
4-24 preparation of an abstract of title by an attorney not an employee
4-25 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;
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
6-1 this Title may be added to the loan contract; and
6-2 (H) reasonable fees relating to real property offered
6-3 as security for the loan that are incurred to comply with a
6-4 federally mandated program if the collection of the fees or the
6-5 participation in the program is required by a federal agency.
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 (D) an administrative fee not to exceed $25 for a loan
6-22 of more than $1,000 or $10 for a loan of $1,000 or less which is
6-23 considered earned at the time the loan is made or refinanced, which
6-24 is not subject to refund, which may not be contracted for or
6-25 received by the lender refinancing the loan more than once in any
7-1 180-day period if the loan is refinanced, and for which 50 cents of
7-2 the fee charged is deposited with the comptroller for the purpose
7-3 of fulfilling the responsibilities of the Finance Commission as
7-4 required under Section 1.011(f), Texas Banking Act (Article
7-5 342-1.011, Vernon's Texas Civil Statutes).
7-6 SECTION 4. This Act takes effect September 1, 1997.
7-7 SECTION 5. The importance of this legislation and the
7-8 crowded condition of the calendars in both houses create an
7-9 emergency and an imperative public necessity that the
7-10 constitutional rule requiring bills to be read on three several
7-11 days in each house be suspended, and this rule is hereby suspended.