HBA-TYH H.B. 2743 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 2743 By: Wise Financial Institutions 3/26/1999 Introduced BACKGROUND AND PURPOSE Currently, there are many fees associated with residential mortgage loans and closing costs involved in purchasing a home that may not be readily apparent to the borrower. They include document preparation fees, appraisal review fees, credit report fees, application fees, overnight mail fees, inspection fees, recording fees, attorney's fees, and settlement fees. Some of these fees can be duplicative or may be otherwise unnecessary. H.B. 2743 requires lenders to disclose to the borrower in good faith, and in writing, all of the closing costs required to be paid by the borrower in connection with a mortgage loan, within three days of the closing of the deal. The bill also requires the lender to state the exact amount of each fees as outlined in the legislation. Failure to provide such information constitutes a Class C misdemeanor. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Title 5, Finance Code, by adding Chapter 396, as follows: CHAPTER 396. RESIDENTIAL MORTGAGE LOAN DISCLOSURES Sec. 396.001. DEFINITIONS. Defines, for this chapter, "borrower," "closing costs," "lender," and "residential mortgage loan." Sec. 396.002. DISCLOSURE OF CLOSING COSTS REQUIRED. Requires the lender, not later than the third business day after the date on which a borrower signs a completed residential mortgage loan application, to provide to the borrower a good faith, written estimate of all closing costs required to be paid by the borrower in connection with the loan. Provides that the disclosure must contain a complete description of the closing costs and state the total amount of each of the closing costs. Sec. 396.003. CRIMINAL PENALTY. Provides that a lender commits a Class C misdemeanor if the lender violates Section 396.002. SECTION 2. Effective date: September 1, 1999. Makes application of this Act prospective. SECTION 3. Emergency clause.