AN ACT
1-1 relating to the licensing of mortgage brokers; providing penalties.
1-2 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-3 SECTION 1. Subchapter D, Chapter 11, Finance Code, is
1-4 amended by adding Section 11.306 to read as follows:
1-5 Sec. 11.306. MORTGAGE BROKERS. The finance commission may:
1-6 (1) review any action or rule adopted by the savings
1-7 and loan commissioner under Chapter 156; and
1-8 (2) direct the savings and loan commissioner to adopt,
1-9 repeal, or amend any rule or other action the savings and loan
1-10 commissioner may undertake under Chapter 156.
1-11 SECTION 2. Subtitle E, Title 3, Finance Code, is amended by
1-12 adding Chapter 156 to read as follows:
1-13 CHAPTER 156. MORTGAGE BROKERS
1-14 SUBCHAPTER A. GENERAL PROVISIONS
1-15 Sec. 156.001. SHORT TITLE. This chapter may be cited as the
1-16 Mortgage Broker License Act.
1-17 Sec. 156.002. DEFINITIONS. In this chapter:
1-18 (1) "Commissioner" means the savings and loan
1-19 commissioner.
1-20 (2) "Disciplinary action" means an order by the
1-21 commissioner that requires one or more of the following:
1-22 (A) suspension or revocation of a license under
1-23 this chapter;
1-24 (B) probation of a suspension or revocation of a
2-1 license under this chapter on terms and conditions that the
2-2 commissioner determines appropriate;
2-3 (C) a reprimand of a person licensed under this
2-4 chapter; or
2-5 (D) an administrative penalty imposed on a
2-6 person licensed under this chapter under Section 156.302.
2-7 (3) "Finance commission" means the Finance Commission
2-8 of Texas.
2-9 (4) "Fund" means the mortgage broker recovery fund
2-10 established by the commissioner under Subchapter F.
2-11 (5) "Loan officer" means an individual sponsored by a
2-12 licensed mortgage broker for the purposes of performing the acts of
2-13 a mortgage broker. The term does not include:
2-14 (A) an individual who performs only clerical
2-15 functions such as delivering a loan application to a mortgage
2-16 broker or mortgage banker or gathering information related to a
2-17 mortgage loan application on behalf of the prospective borrower,
2-18 mortgage broker, or mortgage banker; or
2-19 (B) an individual who performs functions of a
2-20 loan processor.
2-21 (6) "Loan processor" means an individual who works
2-22 under the instruction of a loan officer or mortgage broker and
2-23 performs only clerical functions such as gathering information,
2-24 requesting information, word processing, sending correspondence, or
2-25 assembling files.
2-26 (7) "Mortgage applicant" means a person who is
3-1 solicited to use or who uses a mortgage broker to obtain a mortgage
3-2 loan.
3-3 (8) "Mortgage banker" means a person who is:
3-4 (A) approved or authorized by the United States
3-5 Department of Housing and Urban Development as a mortgagee with
3-6 direct endorsement underwriting authority;
3-7 (B) an approved seller or servicer of the
3-8 Federal National Mortgage Association;
3-9 (C) an approved seller or servicer of the
3-10 Federal Home Loan Mortgage Association; or
3-11 (D) an approved issuer for the Governmental
3-12 National Mortgage Association.
3-13 (9) "Mortgage broker" means a person who receives an
3-14 application from a prospective borrower for the purposes of making
3-15 a mortgage loan from that person's own funds or from the funds of
3-16 another person. The term does not include:
3-17 (A) a person who performs only clerical
3-18 functions such as delivering a loan application to a mortgage
3-19 broker or mortgage banker or gathering information related to a
3-20 mortgage loan application on behalf of the prospective borrower,
3-21 mortgage broker, or mortgage banker; or
3-22 (B) a person who performs functions of a loan
3-23 processor.
3-24 (10) "Mortgage loan" means a debt against real estate
3-25 secured by a first-lien security interest against one-to-four
3-26 family residential real estate created by a deed of trust, security
4-1 deed, or other security instrument.
4-2 Sec. 156.003. SECONDARY MARKET TRANSACTIONS. This chapter
4-3 does not prohibit a mortgage broker from receiving compensation
4-4 from a party other than the mortgage applicant for the sale,
4-5 transfer, assignment, or release of rights on the closing of a
4-6 mortgage transaction.
4-7 Sec. 156.004. DISCLOSURE TO APPLICANT. At the time an
4-8 applicant submits an application to a mortgage broker, the mortgage
4-9 broker shall provide to the applicant a disclosure that specifies
4-10 the nature of the relationship between applicant and broker, the
4-11 duties the broker has to the applicant, and how the mortgage broker
4-12 will be compensated. The commissioner, by rule, shall promulgate a
4-13 standard disclosure form to be used by the mortgage broker.
4-14 Sec. 156.005. AFFILIATED BUSINESS ARRANGEMENTS. Unless
4-15 prohibited by federal law, this chapter may not be construed to
4-16 prevent affiliated or controlled business arrangements or loan
4-17 origination services by or between mortgage brokers and other
4-18 professionals if the mortgage broker complies with all applicable
4-19 federal laws permitting those arrangements or services.
4-20 (Sections 156.006 to 156.100 reserved for expansion
4-21 SUBCHAPTER B. ADMINISTRATION PROVISIONS
4-22 Sec. 156.101. ADMINISTRATION OF CHAPTER. (a) The
4-23 commissioner shall administer this chapter.
4-24 (b) The commissioner may hire employees as necessary to
4-25 administer this chapter. The salaries of the employees shall be
4-26 set by the commissioner in amounts not to exceed the amounts set by
5-1 the General Appropriations Act.
5-2 (c) The commissioner may employ a general counsel,
5-3 attorneys, investigators, and support staff to administer and
5-4 enforce this chapter.
5-5 Sec. 156.102. RULEMAKING AUTHORITY. (a) Subject to review
5-6 and compliance with the directives of the finance commission as
5-7 provided by Section 11.306, the commissioner may adopt and enforce
5-8 rules necessary for the intent of or to ensure compliance with this
5-9 chapter.
5-10 (b) The commissioner may adopt rules to prohibit false,
5-11 misleading, or deceptive practices by mortgage brokers and loan
5-12 officers but may not adopt any other rules restricting competitive
5-13 bidding or advertising by mortgage brokers or loan officers. When
5-14 adopting rules under this subsection, the commissioner may not
5-15 restrict:
5-16 (1) the use of any medium for an advertisement;
5-17 (2) the personal appearance of or voice of a person in
5-18 an advertisement;
5-19 (3) the size or duration of an advertisement; or
5-20 (4) a mortgage broker's or loan officer's
5-21 advertisement under a trade name.
5-22 (c) The commissioner may adopt rules regarding books and
5-23 records that a person licensed under this chapter is required to
5-24 keep, including the location at which the books and records must be
5-25 kept.
5-26 (d) The commissioner shall consult with the mortgage broker
6-1 advisory committee when proposing and adopting rules under this
6-2 chapter.
6-3 Sec. 156.103. POWERS OF COMMISSIONER. (a) In addition to
6-4 any other action, proceeding, or remedy authorized by law, the
6-5 commissioner may institute an action in the commissioner's name to
6-6 enjoin a violation of this chapter or a rule adopted under this
6-7 chapter. To sustain an action filed under this subsection, it is
6-8 not necessary to allege or prove that an adequate remedy at law
6-9 does not exist or that substantial or irreparable damage would
6-10 result from a continued violation of this chapter.
6-11 (b) The commissioner is not required to provide an appeal
6-12 bond in any action or proceeding to enforce this chapter.
6-13 (c) The commissioner may authorize specific employees to
6-14 conduct hearings and make recommendations for final decisions in
6-15 contested cases.
6-16 Sec. 156.104. MORTGAGE BROKER ADVISORY COMMITTEE. (a) The
6-17 mortgage broker advisory committee is created to advise and assist
6-18 the commissioner.
6-19 (b) The advisory committee is composed of six members to be
6-20 appointed as follows:
6-21 (1) the commissioner shall appoint four members, each
6-22 of whom:
6-23 (A) must hold a mortgage broker license;
6-24 (B) is actively engaged in the business of
6-25 brokering loans at the time of appointment; and
6-26 (C) has been primarily engaged in the business
7-1 of brokering mortgage loans for at least two years before the
7-2 member's appointment; and
7-3 (2) the Texas Real Estate Commission shall appoint two
7-4 members, each of whom must hold a real estate broker or salesperson
7-5 license.
7-6 (c) Appointments to the advisory committee shall be made
7-7 without regard to the sex, race, color, age, disability, religion,
7-8 or national origin of the appointees.
7-9 (d) The members of the advisory committee serve for a
7-10 staggered three-year term, with the terms of two members expiring
7-11 February 1 of each year.
7-12 (e) The advisory committee shall meet at least twice a year
7-13 at the call of the commissioner.
7-14 (f) The commissioner may remove a member of the advisory
7-15 committee if:
7-16 (1) the member does not have at the time of
7-17 appointment the qualifications required by Subsection (b); or
7-18 (2) the commissioner determines that the member cannot
7-19 discharge the member's duties for a substantial part of the term
7-20 for which the member is appointed.
7-21 (g) In the event of a vacancy during a term, the appointing
7-22 entity or official shall fill the vacancy for the unexpired part of
7-23 the term with a person who meets the qualifications of the vacated
7-24 position.
7-25 (h) In addition to other powers and duties delegated to it
7-26 by the commissioner, the advisory committee shall advise the
8-1 commissioner with respect to:
8-2 (1) the proposal and adoption of rules relating to:
8-3 (A) the licensing of mortgage brokers and loan
8-4 officers;
8-5 (B) the education and experience requirements
8-6 for licensing mortgage brokers and loan officers;
8-7 (C) conduct and ethics of mortgage brokers and
8-8 loan officers;
8-9 (D) continuing education for licensed mortgage
8-10 brokers and loan officers and the types of courses acceptable as
8-11 continuing education courses under this chapter; and
8-12 (E) the granting or denying of an application or
8-13 request for renewal for a mortgage broker license or loan officer
8-14 license;
8-15 (2) the form of or format for any applications or
8-16 other documents under this chapter; and
8-17 (3) the interpretation, implementation, and
8-18 enforcement of this chapter.
8-19 (i) Each member of the advisory committee is entitled to a
8-20 per diem allowance and to reimbursement of travel expenses
8-21 necessarily incurred in performing functions as a member of the
8-22 committee, subject to any applicable limitation in the General
8-23 Appropriations Act.
8-24 (Sections 156.105 to 156.200 reserved for expansion)
8-25 SUBCHAPTER C. MORTGAGE BROKER LICENSE AND LOAN OFFICER LICENSE
8-26 Sec. 156.201. LICENSES REQUIRED. (a) A person may not act
9-1 in the capacity of, engage in the business of, or advertise or hold
9-2 that person out as engaging in or conducting the business of a
9-3 mortgage broker in this state unless the person holds an active
9-4 mortgage broker license or is exempt under Section 156.202.
9-5 (b) An individual may not act or attempt to act as a loan
9-6 officer unless the individual at the time is:
9-7 (1) licensed under this chapter;
9-8 (2) sponsored by a licensed mortgage broker and acting
9-9 for the mortgage broker; or
9-10 (3) exempt under Section 156.202.
9-11 (c) Each mortgage broker licensed under this chapter is
9-12 responsible to the commissioner and members of the public for any
9-13 act or conduct performed under this chapter by the mortgage broker
9-14 or a loan officer sponsored by or acting for the mortgage broker.
9-15 Sec. 156.202. EXEMPTIONS. This chapter does not apply to:
9-16 (1) any of the following entities or an employee of
9-17 any of the following entities provided the employee is acting for
9-18 the benefit of the employer:
9-19 (A) a bank, savings bank, or savings and loan
9-20 association, or a subsidiary or an affiliate of a bank, savings
9-21 bank, or savings and loan association;
9-22 (B) a state or federal credit union;
9-23 (C) an insurance company licensed or authorized
9-24 to do business in this state under the Insurance Code;
9-25 (D) a mortgage banker; or
9-26 (E) an organization that qualifies for an
10-1 exemption from state franchise and sales tax as a 501(c)(3)
10-2 organization;
10-3 (2) an individual who makes a mortgage loan from the
10-4 individual's own funds to a spouse, former spouse, or persons in
10-5 the lineal line of consanguinity of the individual lending the
10-6 money;
10-7 (3) an owner of real property who makes a mortgage
10-8 loan to a purchaser of the property for all or part of the purchase
10-9 price of the real estate against which the mortgage is secured; or
10-10 (4) an individual who:
10-11 (A) makes a mortgage loan from the individual's
10-12 own funds;
10-13 (B) is not an authorized lender under Chapter
10-14 342, Finance Code; and
10-15 (C) does not regularly engage in the business of
10-16 making or brokering mortgage loans.
10-17 Sec. 156.203. APPLICATION FOR A LICENSE; FEES. (a) An
10-18 application for a mortgage broker or loan officer license must be:
10-19 (1) in writing;
10-20 (2) under oath; and
10-21 (3) on the form prescribed by the commissioner.
10-22 (b) An application for a mortgage broker license must be
10-23 accompanied by:
10-24 (1) an application fee in an amount determined by the
10-25 commissioner not to exceed $375; and
10-26 (2) a recovery fund fee as provided by Section
11-1 156.502.
11-2 (c) An application for a loan officer license must be
11-3 accompanied by:
11-4 (1) an application fee in an amount determined by the
11-5 commissioner not to exceed $175; and
11-6 (2) a recovery fund fee as provided by Section
11-7 156.502.
11-8 (d) An application fee under this section is not refundable.
11-9 Sec. 156.204. QUALIFICATIONS. (a) To be eligible to be
11-10 licensed as a mortgage broker a person must:
11-11 (1) be an individual who is at least 18 years of age;
11-12 (2) be a citizen of the United States or a lawfully
11-13 admitted alien;
11-14 (3) maintain a physical office in this state and
11-15 designate that office in the application;
11-16 (4) provide the commissioner with satisfactory
11-17 evidence that the applicant satisfies one of the following:
11-18 (A) the person has received a bachelor's degree
11-19 in an area relating to finance, banking, or business administration
11-20 from an accredited college or university and has 18 months of
11-21 experience in the mortgage or lending field as evidenced by
11-22 documentary proof of full-time employment as a mortgage broker or
11-23 loan officer with a mortgage broker or a person exempt under
11-24 Section 156.202;
11-25 (B) the person is licensed in this state as:
11-26 (i) an active real estate broker under The
12-1 Real Estate License Act (Article 6573a, Vernon's Texas Civil
12-2 Statutes);
12-3 (ii) an active attorney; or
12-4 (iii) a local recording agent or insurance
12-5 solicitor or agent for a legal reserve life insurance company under
12-6 Chapter 21, Insurance Code, or holds an equivalent license under
12-7 Chapter 21, Insurance Code; or
12-8 (C) the person has three years of experience in
12-9 the mortgage lending field as evidenced by documentary proof of
12-10 full-time employment as a loan officer with a mortgage broker or a
12-11 person exempt under Section 156.202;
12-12 (5) demonstrate evidence of compliance with the
12-13 financial requirements of this chapter; and
12-14 (6) not have been convicted of a criminal offense that
12-15 the commissioner determines directly relates to the occupation of a
12-16 mortgage broker under Article 6252-13c, Revised Statutes.
12-17 (b) A mortgage broker may conduct business under a corporate
12-18 structure, partnership, or any other business form or as an
12-19 independent contractor for a corporation, partnership, or any other
12-20 business entity. Before conducting mortgage broker activities
12-21 under, through, or for a corporation, partnership, or other
12-22 business entity, a mortgage broker must notify the commissioner, in
12-23 writing, of any corporate name, partnership name, assumed name, or
12-24 any other name under, through, or for which the mortgage broker
12-25 conducts activities for which a license is required under this
12-26 chapter. The corporation, partnership, or other business entity
13-1 under, through, or for which the mortgage broker conducts business
13-2 is not required to be separately licensed as a mortgage broker
13-3 provided that all individuals who perform mortgage broker
13-4 activities are licensed as mortgage brokers or loan officers. The
13-5 commissioner shall require proof of compliance with this subsection
13-6 at the time the mortgage broker applies for and renews a license.
13-7 (c) To be eligible to be licensed as a loan officer a person
13-8 must:
13-9 (1) be an individual who is at least 18 years of age;
13-10 (2) be a citizen of the United States or a lawfully
13-11 admitted alien;
13-12 (3) designate in the application the name of the
13-13 mortgage broker sponsoring the loan officer;
13-14 (4) provide the commissioner with satisfactory
13-15 evidence that the applicant satisfies one of the following:
13-16 (A) the person meets one of the requirements
13-17 described by Subsection (a)(4);
13-18 (B) the person has successfully completed 15
13-19 hours of education courses approved by the commissioner under this
13-20 section;
13-21 (C) the person has 18 months of experience as a
13-22 loan officer as evidenced by documentary proof of full-time
13-23 employment as a loan officer with a mortgage broker or a person
13-24 exempt under Section 156.202; or
13-25 (D) for applications received prior to January
13-26 1, 2000, the mortgage broker that will sponsor the applicant
14-1 provides a certification under oath that the applicant has been
14-2 provided necessary and appropriate education and training regarding
14-3 all applicable state and federal law and regulations relating to
14-4 mortgage loans; and
14-5 (5) not have been convicted of a criminal offense that
14-6 the commissioner determines directly relates to the occupation of a
14-7 loan officer under Article 6252-13c, Revised Statutes.
14-8 Sec. 156.205. FINANCIAL REQUIREMENTS FOR A MORTGAGE BROKER.
14-9 (a) In this section, "net assets" means the difference between
14-10 total assets and total liabilities, as determined by generally
14-11 acceptable accounting principles.
14-12 (b) A mortgage broker must maintain net assets of at least
14-13 $25,000 or a surety bond in the amount of at least $50,000. The
14-14 term of the surety bond must coincide with the term of the license.
14-15 (c) The commissioner shall require proof of compliance with
14-16 this section at the time the mortgage broker applies for or renews
14-17 a license.
14-18 Sec. 156.206. CRIMINAL BACKGROUND CHECK. (a) On receipt of
14-19 an application for a mortgage broker license or a loan officer
14-20 license, the commissioner shall conduct a criminal background check
14-21 of the applicant.
14-22 (b) The commissioner shall obtain criminal history record
14-23 information on an applicant that is maintained by the Department of
14-24 Public Safety. By rule, the commissioner may require applicants to
14-25 submit information and fingerprints necessary for the commissioner
14-26 to obtain criminal background information from the Federal Bureau
15-1 of Investigation. The commissioner may also obtain criminal
15-2 history record information from any court or any local, state, or
15-3 national governmental agency.
15-4 (c) The commissioner shall keep confidential any criminal
15-5 background information obtained under this subsection and may not
15-6 release or disclose the information unless:
15-7 (1) the information is a public record at the time the
15-8 commissioner obtains the information; or
15-9 (2) the commissioner releases the information:
15-10 (A) under order from a court;
15-11 (B) with the permission of the applicant;
15-12 (C) to a person through whom the applicant is
15-13 conducting or will conduct business; or
15-14 (D) to a governmental agency.
15-15 Sec. 156.207. ISSUANCE OF LICENSE CERTIFICATE; PROVISIONAL
15-16 LICENSE. (a) The commissioner shall issue a license certificate
15-17 to an applicant for a mortgage broker license if the commissioner
15-18 finds that the applicant meets all requirements and conditions for
15-19 the license.
15-20 (b) When an applicant for a loan officer license has met all
15-21 requirements and conditions for the license, the commissioner shall
15-22 issue a license certificate to the mortgage broker sponsoring the
15-23 loan officer.
15-24 (c) In accordance with any rules adopted under this
15-25 subsection, the commissioner may issue a provisional license to an
15-26 applicant if a significant delay is necessary to process the
16-1 application, review information related to the application, or
16-2 obtain information related to the application. The commissioner
16-3 may revoke a provisional license issued under this subsection on a
16-4 ground listed under Section 156.303 or on any ground that the
16-5 commissioner could have denied issuance of the license on the
16-6 application.
16-7 Sec. 156.208. RENEWALS. (a) A mortgage broker license
16-8 issued under this chapter is valid for two years and may be renewed
16-9 on or before its expiration date if the mortgage broker:
16-10 (1) pays to the commissioner a renewal fee in an
16-11 amount determined by the commissioner not to exceed $375 and a
16-12 recovery fund fee provided by Section 156.502;
16-13 (2) has not been convicted of a felony the
16-14 commissioner determines is directly related to the occupation of a
16-15 mortgage broker under Article 6252-13c, Revised Statutes; and
16-16 (3) provides the commissioner with satisfactory
16-17 evidence that the mortgage broker:
16-18 (A) has attended, during the term of the current
16-19 license, 15 hours of continuing education courses that the
16-20 commissioner, in accordance with the rules adopted under this
16-21 section, has approved as continuing education courses; or
16-22 (B) maintains an active license in this state
16-23 as:
16-24 (i) a real estate broker;
16-25 (ii) a real estate salesperson;
16-26 (iii) an attorney; or
17-1 (iv) a local recording agent or insurance
17-2 solicitor or agent for a legal reserve life insurance company under
17-3 Chapter 21, Insurance Code, or an equivalent license under Chapter
17-4 21, Insurance Code.
17-5 (b) A loan officer license issued under this chapter is
17-6 valid for two years and may be renewed on or before its expiration
17-7 date if the loan officer:
17-8 (1) pays to the commissioner a renewal fee in an
17-9 amount determined by the commissioner not to exceed $175 and a
17-10 recovery fund fee provided by Section 156.502;
17-11 (2) has not been convicted of a felony the
17-12 commissioner determines is directly related to the occupation of a
17-13 loan officer under Article 6252-13c, Revised Statutes; and
17-14 (3) provides the commissioner with satisfactory
17-15 evidence that the loan officer:
17-16 (A) has attended, during the term of the current
17-17 license, 15 hours of continuing education courses that the
17-18 commissioner, in accordance with the rules adopted under this
17-19 section, has approved as continuing education courses, including
17-20 courses provided by or through the licensed mortgage broker with
17-21 whom the loan officer is associated after submission to and
17-22 approval by the commission; or
17-23 (B) maintains an active license in this state
17-24 as:
17-25 (i) a real estate broker;
17-26 (ii) a real estate salesperson;
18-1 (iii) an attorney; or
18-2 (iv) a local recording agent or insurance
18-3 solicitor or agent for a legal reserve life insurance company under
18-4 Chapter 21, Insurance Code, or an equivalent license under Chapter
18-5 21, Insurance Code.
18-6 (c) The commissioner may require mortgage brokers or loan
18-7 officers to submit requests for renewal on a form prescribed by the
18-8 commissioner.
18-9 (d) On receipt of a request for a renewal of a license
18-10 issued under this subchapter, the commissioner may conduct a
18-11 criminal background check under Section 156.206.
18-12 (e) A renewal fee is not refundable.
18-13 (f) The commissioner by rule may adopt a system under which
18-14 licenses expire on a date or dates other than December 31. If a
18-15 system is adopted under this subsection, dates relating to
18-16 expiration and issuance of licenses shall be adjusted accordingly.
18-17 For the biennium in which the license expiration date is changed,
18-18 license fees shall be prorated on a monthly basis so that each
18-19 license holder pays only that portion of the license fee that is
18-20 allocable to the number of months during which the license is
18-21 valid. On renewal of the license on the new expiration date, the
18-22 total license renewal fee is payable.
18-23 (g) The commissioner shall adopt rules related to the
18-24 approval of courses for continuing education credit under this
18-25 section that provide for the acceptance of continuing education
18-26 courses that are related to finance, financial consulting, lending,
19-1 real estate contracts, discrimination laws, deceptive trade
19-2 practices, real property conveyances, and other topics that are
19-3 relevant to mortgage brokers and that are acceptable as continuing
19-4 education courses to other professional licensing agencies.
19-5 Sec. 156.209. DENIAL OF APPLICATIONS AND RENEWALS. (a) If
19-6 the commissioner declines or fails to issue or renew a license, the
19-7 commissioner shall promptly give written notice to the applicant or
19-8 the person requesting the renewal that the application or renewal,
19-9 as appropriate, was denied.
19-10 (b) Before the applicant or person requesting the renewal
19-11 may appeal to a district court as provided by Section 156.401, the
19-12 applicant or person must file with the commissioner, not later than
19-13 the 10th day after the date on which notice under Subsection (a) is
19-14 received, an appeal of the ruling requesting a time and place for a
19-15 hearing before a hearings officer designated by the commissioner.
19-16 (c) The designated hearings officer shall set the time and
19-17 place for a hearing requested under Subsection (b) not later than
19-18 the 30th day after the date on which the appeal is received. The
19-19 hearings officer shall provide at least 10 days' notice of the
19-20 hearing to the applicant or person requesting the renewal. The
19-21 time of the hearing may be continued periodically with the consent
19-22 of the applicant or person requesting the renewal. After the
19-23 hearing, the commissioner shall enter an order from the findings of
19-24 fact, conclusions of law, and recommendations of the hearings
19-25 officer.
19-26 (d) If an applicant or person requesting the renewal fails
20-1 to request a hearing under this section, the commissioner's refusal
20-2 to issue or renew a license is final and may not be subject to
20-3 review by the courts.
20-4 (e) A hearing held under this section is governed by Chapter
20-5 2001, Government Code. An appeal of a final order issued under
20-6 this section may be made in accordance with Section 156.401.
20-7 Sec. 156.210. PROBATIONARY LICENSE. The commissioner may
20-8 issue a probationary license. The commissioner by rule shall adopt
20-9 reasonable terms and conditions for a probationary license.
20-10 Sec. 156.211. CHANGE OF ADDRESS OR SPONSORSHIP; MODIFICATION
20-11 OF LICENSE. (a) Before the 10th day preceding the effective date
20-12 of an address change, a mortgage broker shall notify the
20-13 commissioner in writing of the new address accompanied by a change
20-14 of address fee of $25. A new license certificate must be obtained
20-15 before the mortgage broker may conduct business at the new
20-16 location.
20-17 (b) A loan officer may act only for the mortgage broker
20-18 sponsoring the loan officer. A loan officer may be sponsored by
20-19 only one mortgage broker at a time. When the sponsorship of a loan
20-20 officer is terminated, the loan officer and the mortgage broker
20-21 shall immediately notify the commissioner and the mortgage broker
20-22 shall return the loan officer license to the commissioner. The
20-23 loan officer's license then becomes inactive. The loan officer
20-24 license may be activated if, before the license expires, a mortgage
20-25 broker files a request, accompanied by a $25 fee, notifying the
20-26 commissioner that the mortgage broker will sponsor the loan officer
21-1 and will assume responsibility for the actions of the loan officer.
21-2 (c) A fee under this section is not refundable.
21-3 Sec. 156.212. MAINTENANCE AND LOCATION OF OFFICES; DISPLAY
21-4 OF LICENSE CERTIFICATES. (a) Each mortgage broker licensed under
21-5 this chapter shall maintain a physical office in this state. The
21-6 address of the office shall be designated on the license
21-7 certificate.
21-8 (b) If a mortgage broker maintains more than one place of
21-9 business in this state, the mortgage broker shall apply for, pay a
21-10 fee of $50 for, and obtain an additional license certificate to be
21-11 known as a branch office license for each additional office to be
21-12 maintained by the mortgage broker.
21-13 (c) The license certificate of a mortgage broker shall be at
21-14 all times prominently displayed in the mortgage broker's place of
21-15 business. The branch office certificate shall be at all times
21-16 prominently displayed in the mortgage broker's branch office.
21-17 (d) A loan officer license certificate shall be at all times
21-18 prominently displayed in the office of the mortgage broker for whom
21-19 the loan officer primarily conducts business.
21-20 (Sections 156.213 to 156.300 reserved for expansion
21-21 SUBCHAPTER D. LICENSE REVOCATION AND SUSPENSION AND OTHER ACTIONS
21-22 AGAINST LICENSE HOLDER
21-23 Sec. 156.301. COMPLAINTS AND INVESTIGATIONS. (a) On the
21-24 signed written complaint of a person, the commissioner shall
21-25 investigate the actions and records of a person licensed under this
21-26 chapter if the complaint, or the complaint and documentary or other
22-1 evidence presented in connection with the complaint, provides
22-2 reasonable cause. The commissioner, before commencing an
22-3 investigation, shall notify a mortgage broker or loan officer in
22-4 writing of the complaint and that the commissioner intends to
22-5 investigate the matter.
22-6 (b) Except as provided by Subsection (a), the commissioner
22-7 may not initiate an investigation or other action against a person
22-8 licensed under this chapter on the basis of an anonymous complaint
22-9 regardless of whether the complaint is in writing. The
22-10 commissioner may conduct an undercover or covert investigation only
22-11 if the commissioner, after due consideration of the circumstances,
22-12 determines that the investigation is necessary to prevent immediate
22-13 harm and to carry out the purposes of this chapter.
22-14 (c) The commissioner may authorize an employee of the
22-15 commissioner to file a signed written complaint against a person
22-16 licensed under this chapter and to conduct an investigation if:
22-17 (1) a judgment against the person has been paid from a
22-18 recovery fund established under this chapter;
22-19 (2) the person holds a provisional license issued
22-20 under Section 156.207(c);
22-21 (3) the person is convicted of a criminal offense that
22-22 may constitute grounds for the suspension or revocation of the
22-23 license; or
22-24 (4) the person fails to honor a check issued to the
22-25 commissioner.
22-26 Sec. 156.302. ADMINISTRATIVE PENALTY. (a) The commissioner
23-1 may impose an administrative penalty on a person licensed under
23-2 this chapter who violates this chapter or a rule or order adopted
23-3 under this chapter.
23-4 (b) The amount of the penalty may not exceed $2,500, and
23-5 each day a violation continues or occurs is a separate violation
23-6 for the purpose of imposing a penalty. The amount shall be based
23-7 on:
23-8 (1) the seriousness of the violation, including the
23-9 nature, circumstances, extent, and gravity of the violation;
23-10 (2) the history of previous violations;
23-11 (3) the amount necessary to deter a future violation;
23-12 (4) efforts to correct the violation; and
23-13 (5) any other matter that justice may require.
23-14 (c) The enforcement of the penalty may be stayed during the
23-15 time the order is under judicial review if the person pays the
23-16 penalty to the clerk of the court or files a supersedeas bond with
23-17 the court in the amount of the penalty. A person who cannot afford
23-18 to pay the penalty or file the bond may stay the enforcement by
23-19 filing an affidavit in the manner required by the Texas Rules of
23-20 Civil Procedure for a party who cannot afford to file security for
23-21 costs, subject to the right of the commissioner to contest the
23-22 affidavit as provided by those rules.
23-23 (d) The attorney general may sue to collect the penalty.
23-24 (e) A proceeding to impose the penalty is considered to be a
23-25 contested case under Chapter 2001, Government Code.
23-26 Sec. 156.303. DISCIPLINARY ACTION; CEASE AND DESIST ORDER.
24-1 (a) The commissioner may order disciplinary action against a
24-2 licensed mortgage broker or a licensed loan officer when the
24-3 commissioner, after a hearing, has determined that the person:
24-4 (1) obtained a license under this chapter through a
24-5 false or fraudulent representation or made a material
24-6 misrepresentation in an application for a license under this
24-7 chapter;
24-8 (2) published or caused to be published an
24-9 advertisement related to the business of a mortgage broker or loan
24-10 officer that:
24-11 (A) is misleading;
24-12 (B) is likely to deceive the public;
24-13 (C) in any manner tends to create a misleading
24-14 impression;
24-15 (D) fails to identify as a mortgage broker or
24-16 loan officer the person causing the advertisement to be published;
24-17 or
24-18 (E) violates federal or state law;
24-19 (3) while performing an act for which a license under
24-20 this chapter is required, engaged in conduct that constitutes
24-21 improper, fraudulent, or dishonest dealings;
24-22 (4) failed to notify the commissioner not later than
24-23 the 30th day after the date of the final conviction if the person,
24-24 in a court of this or another state or in a federal court, has been
24-25 convicted of or entered a plea of guilty or nolo contendere to a
24-26 felony or a criminal offense involving fraud;
25-1 (5) failed to use a fee collected in advance of
25-2 closing of a mortgage loan for a purpose for which the fee was
25-3 paid;
25-4 (6) charged or received, directly or indirectly, a fee
25-5 for assisting a mortgage applicant in obtaining a mortgage loan
25-6 before all of the services that the person agreed to perform for
25-7 the mortgage applicant are completed, and the proceeds of the
25-8 mortgage loan have been disbursed to or on behalf of the mortgage
25-9 applicant, except as provided by Section 156.304;
25-10 (7) failed within a reasonable time to honor a check
25-11 issued to the commissioner after the commissioner has mailed a
25-12 request for payment by certified mail to the person's last known
25-13 business address as reflected by the commissioner's records;
25-14 (8) paid compensation to a person who is not licensed
25-15 or exempt under this chapter for acts for which a license under
25-16 this chapter is required;
25-17 (9) induced or attempted to induce a party to a
25-18 contract to breach the contract so the person may make a mortgage
25-19 loan;
25-20 (10) published or circulated an unjustified or
25-21 unwarranted threat of legal proceedings in matters related to the
25-22 person's actions or services as a mortgage broker or loan officer,
25-23 as applicable;
25-24 (11) established an association, by employment or
25-25 otherwise, with a person not licensed or exempt under this chapter
25-26 who was expected or required to act as a mortgage broker or loan
26-1 officer;
26-2 (12) aided, abetted, or conspired with a person to
26-3 circumvent the requirements of this chapter;
26-4 (13) acted in the dual capacity of a mortgage broker
26-5 or loan officer and real estate broker, salesperson, or attorney
26-6 in a transaction without the knowledge and written consent of the
26-7 mortgage applicant or in violation of applicable requirements under
26-8 federal law;
26-9 (14) discriminated against a prospective borrower on
26-10 the basis of race, color, religion, sex, national origin, ancestry,
26-11 familial status, or a disability;
26-12 (15) failed or refused on demand to:
26-13 (A) produce a document, book, or record
26-14 concerning a mortgage loan transaction conducted by the mortgage
26-15 broker or loan officer for inspection by the commissioner or the
26-16 commissioner's authorized personnel or representative;
26-17 (B) give the commissioner or the commissioner's
26-18 authorized personnel or representative free access to the books or
26-19 records relating to the person's business kept by an officer,
26-20 agent, or employee of the person or any business entity through
26-21 which the person conducts mortgage brokerage activities, including
26-22 a subsidiary or holding company affiliate; or
26-23 (C) provide information requested by the
26-24 commissioner as a result of a formal or informal complaint made to
26-25 the commissioner;
26-26 (16) failed without just cause to surrender, on
27-1 demand, a copy of a document or other instrument coming into the
27-2 person's possession that was provided to the person by another
27-3 person making the demand or that the person making the demand is
27-4 under law entitled to receive; or
27-5 (17) disregarded or violated this chapter or a rule
27-6 adopted by the commissioner under this chapter.
27-7 (b) In addition to disciplinary action by the commissioner
27-8 authorized under Subsection (a), the commissioner, if the
27-9 commissioner has reasonable cause to believe that a person licensed
27-10 under this chapter has or is about to violate this section, may
27-11 issue without notice and hearing an order to cease and desist from
27-12 continuing a particular action or an order to take affirmative
27-13 action, or both, to enforce compliance with this chapter.
27-14 (c) An order issued under Subsection (b) must contain a
27-15 reasonably detailed statement of the facts on which the order is
27-16 made. If a person against whom the order is made requests a
27-17 hearing, the commissioner shall set and give notice of a hearing
27-18 before the commissioner or a hearings officer. The hearing shall
27-19 be governed by Chapter 2001, Government Code. Based on the
27-20 findings of fact, conclusions of law, and recommendations of the
27-21 hearings officer, the commissioner by order may find a violation
27-22 has occurred or not occurred.
27-23 (d) If a hearing is not requested under Subsection (c) not
27-24 later than the 30th day after the date on which an order is made,
27-25 the order is considered final and not appealable.
27-26 (e) The commissioner, after giving notice, may impose
28-1 against a person who violates a cease and desist order an
28-2 administrative penalty in an amount not to exceed $1,000 for each
28-3 day of the violation. In addition to any other remedy provided by
28-4 law, the commissioner may institute in district court a suit for
28-5 injunctive relief and to collect the administrative penalty. A
28-6 bond is not required of the commissioner with respect to injunctive
28-7 relief granted under this subsection. A penalty collected under
28-8 this subsection shall be deposited in the fund.
28-9 Sec. 156.304. FEE ASSESSMENT AND DISCLOSURE. (a) Before
28-10 the completion of all services to be performed, a mortgage broker
28-11 may charge and receive, unless prohibited by law, the following
28-12 fees for services in assisting a mortgage applicant to obtain a
28-13 mortgage:
28-14 (1) a fee to obtain a credit report;
28-15 (2) a fee for the appraisal of the real estate;
28-16 (3) a fee for processing a mortgage application;
28-17 (4) a fee for taking a mortgage application;
28-18 (5) a fee for automated underwriting;
28-19 (6) a fee for a courier service;
28-20 (7) a fee to issue a loan commitment; or
28-21 (8) subject to Subsection (b), a fee for locking in an
28-22 interest rate.
28-23 (b) A mortgage broker or loan officer may not charge or
28-24 receive a fee for locking in an interest rate unless there is a
28-25 written agreement signed by the mortgage applicant and mortgage
28-26 broker that contains a statement of whether the fee to lock in the
29-1 interest rate is refundable and, if so, the terms and conditions
29-2 necessary to obtain the refund.
29-3 (Sections 156.305 to 156.400 reserved for expansion
29-4 SUBCHAPTER E. HEARINGS; JUDICIAL REVIEW; CIVIL ACTIONS; UNLICENSED
29-5 ACTIVITY
29-6 Sec. 156.401. HEARINGS AND JUDICIAL REVIEW. (a) The
29-7 commissioner may employ an enforcement staff to investigate and
29-8 prosecute complaints made against persons licensed under this
29-9 chapter. The commissioner may employ a hearings officer to conduct
29-10 hearings under this section.
29-11 (b) If the commissioner proposes to suspend or revoke a
29-12 license issued under this chapter or if the commissioner refuses to
29-13 issue or renew a license to an applicant for a license or person
29-14 requesting a renewal of a license under this chapter, the applicant
29-15 or license holder is entitled to a hearing before the commissioner
29-16 or a hearings officer who shall make a proposal for decision to the
29-17 commissioner. The commissioner or hearings officer shall prescribe
29-18 the time and place of the hearing. The hearing is governed by
29-19 Chapter 2001, Government Code.
29-20 (c) The commissioner or hearings officer may issue subpoenas
29-21 for the attendance of witnesses and the production of records or
29-22 documents. Process issued by the commissioner or hearings officer
29-23 may extend to all parts of the state and may be served by any
29-24 person designated by the commissioner or hearings officer.
29-25 (d) An individual aggrieved by a ruling, order, or decision
29-26 of the commissioner has the right to appeal to a district court in
30-1 the county in which the hearing was held. An appeal under this
30-2 subsection is governed by Chapter 2001, Government Code.
30-3 Sec. 156.402. CIVIL ACTIONS AND INJUNCTIVE RELIEF. (a) A
30-4 mortgage applicant injured by a violation of this chapter may bring
30-5 an action for recovery of actual monetary damages and reasonable
30-6 attorney's fees and court costs.
30-7 (b) The commissioner, the attorney general, or a mortgage
30-8 applicant may bring an action to enjoin a violation of this
30-9 chapter.
30-10 (c) A remedy provided by this section is in addition to any
30-11 other remedy provided by law.
30-12 Sec. 156.403. BURDEN OF PROOF TO ESTABLISH AN EXEMPTION.
30-13 The burden of proving an exemption in a proceeding or action
30-14 brought under this chapter is on the person claiming the benefit of
30-15 the exemption.
30-16 Sec. 156.404. RELIANCE ON WRITTEN NOTICES FROM COMMISSIONER.
30-17 A person does not violate this chapter with respect to an action
30-18 taken or omission made in reliance on a written notice, written
30-19 interpretation, or written report from the commissioner, unless a
30-20 subsequent amendment to this chapter or a rule adopted under this
30-21 chapter affects the commissioner's notice, interpretation, or
30-22 report.
30-23 Sec. 156.405. COMPLETION OF MORTGAGE BROKER SERVICES.
30-24 (a) On disbursement of mortgage proceeds to or on behalf of the
30-25 mortgage applicant, the mortgage broker and loan officer who
30-26 assisted the mortgage applicant in obtaining the mortgage loan are
31-1 considered to have completed the performance of the mortgage
31-2 broker's and loan officer's services for the mortgage applicant and
31-3 owe no additional duties or obligations to the mortgage applicant
31-4 with respect to the mortgage loan.
31-5 (b) This section does not limit or preclude the liability of
31-6 a mortgage broker or loan officer for:
31-7 (1) failing to comply with this chapter or a rule
31-8 adopted under this chapter;
31-9 (2) failing to comply with a provision of or duty
31-10 arising under an agreement with a mortgage applicant or lender
31-11 under this chapter; or
31-12 (3) violating any other state or federal law.
31-13 Sec. 156.406. UNLICENSED ACTIVITY. (a) A person who is not
31-14 exempt under this chapter and who acts as a mortgage broker or loan
31-15 officer without first obtaining a license required under this
31-16 chapter commits an offense. An offense under this subsection is a
31-17 Class B misdemeanor. A second or subsequent conviction for an
31-18 offense under this subsection shall be punished as a Class A
31-19 misdemeanor.
31-20 (b) A person who received money, or the equivalent of money,
31-21 as a fee or profit because of or in consequence of the person
31-22 acting as a mortgage broker or loan officer without an active
31-23 license or being exempt under this chapter is liable for damages in
31-24 an amount that is not less than the amount of the fee or profit
31-25 received and not to exceed three times the amount of the fee or
31-26 profit received, as may be determined by the court. An aggrieved
32-1 person may recover damages under this subsection in a court.
32-2 (c) If the commissioner has reasonable cause to believe that
32-3 a person who is not licensed or exempt under this chapter has
32-4 engaged, or is about to engage, in an act or practice for which a
32-5 license is required under this chapter, the commissioner may issue
32-6 without notice and hearing an order to cease and desist from
32-7 continuing a particular action or an order to take affirmative
32-8 action, or both, to enforce compliance with this chapter. The
32-9 order shall contain a reasonably detailed statement of the facts on
32-10 which the order is made. If a person against whom the order is
32-11 made requests a hearing, the commissioner shall set and give notice
32-12 of a hearing before the commissioner or a hearings officer. The
32-13 hearing shall be governed by Chapter 2001, Government Code. Based
32-14 on the findings of fact, conclusions of law, and recommendations of
32-15 the hearings officer, the commissioner by order may find a
32-16 violation has occurred or not occurred.
32-17 (d) If a hearing has not been requested under Subsection (c)
32-18 not later than the 30th day after the date the order is made, the
32-19 order is considered final and not appealable. The commissioner,
32-20 after giving notice, may impose against a person who violates a
32-21 cease and desist order, an administrative penalty in an amount not
32-22 to exceed $1,000 for each day of a violation. In addition to any
32-23 other remedy provided by law, the commissioner may institute in
32-24 district court a suit for injunctive relief and to collect the
32-25 administrative penalty. A bond is not required of the commissioner
32-26 with respect to injunctive relief granted under this section. A
33-1 penalty collected under this subsection shall be deposited in the
33-2 fund.
33-3 (Sections 156.407 to 156.500 reserved for expansion
33-4 SUBCHAPTER F. MORTGAGE BROKER RECOVERY FUND
33-5 Sec. 156.501. MORTGAGE BROKER RECOVERY FUND. (a) The
33-6 commissioner shall establish and maintain a mortgage broker
33-7 recovery fund as provided by this subchapter. The amounts received
33-8 by the commissioner for deposit in the fund shall be held by the
33-9 commissioner in trust for carrying out the purposes of the fund.
33-10 (b) The fund shall be used to reimburse aggrieved persons to
33-11 whom a court awards actual damages because of certain acts
33-12 committed by a mortgage broker or loan officer who was licensed
33-13 under this chapter when the act was committed. The use of the fund
33-14 is limited to an act that constitutes a violation of Section
33-15 156.303(a)(2), (3), (5), (6), (8), (9), (10), (11), (12), (13), or
33-16 (16) or 156.304.
33-17 (c) Amounts in the fund may be invested and reinvested in
33-18 the same manner as funds of the Texas State Employees Retirement
33-19 System, and the interest from these investments shall be deposited
33-20 to the credit of the fund. An investment may not be made under
33-21 this subsection if the investment will impair the necessary
33-22 liquidity required to satisfy judgment payments awarded under this
33-23 subchapter.
33-24 Sec. 156.502. FUNDING. (a) On an application for an
33-25 original license or for renewal of a license issued under this
33-26 chapter, the applicant, in addition to paying the original
34-1 application fee or renewal fee, shall pay a $20 fee. The fee shall
34-2 be deposited in the fund.
34-3 (b) If the balance remaining in the fund at the end of a
34-4 calendar year after 2010 is less than $500,000, each mortgage
34-5 broker and loan officer licensed under this chapter, on the next
34-6 renewal of the license, shall pay, in addition to any other
34-7 required fees, the lesser of a $10 fee or a pro rata share of the
34-8 amount necessary to bring the fund to $1 million. The fee shall be
34-9 deposited in the fund.
34-10 (c) If the balance remaining in the mortgage broker recovery
34-11 fund at the end of a calendar year is more than the greater of $3.5
34-12 million or the total amount of claims paid from the fund during the
34-13 previous four fiscal years, the amount of money in excess of the
34-14 greater amount shall be transferred to the general revenue fund.
34-15 Sec. 156.503. STATUTE OF LIMITATIONS. An action for a
34-16 judgment that subsequently results in an order for collection from
34-17 the fund may not be instituted after the second anniversary of the
34-18 date on which the cause of action accrues.
34-19 Sec. 156.504. PROCEDURE FOR RECOVERY. (a) An aggrieved
34-20 person who recovers against a mortgage broker or loan officer
34-21 licensed under this chapter a valid court judgment for conduct
34-22 described by Section 156.501 that occurred on or after January 1,
34-23 2000, after final judgment has been entered, execution returned
34-24 nulla bona, and a judgment lien perfected, may file a verified
34-25 claim in the court in which the judgment was entered and, on 20
34-26 days' written notice to the commissioner and to the judgment
35-1 debtor, may apply to the court for an order directing payment from
35-2 the fund of any unpaid judgment amount, subject to Section 156.503.
35-3 (b) On the hearing on the application, the aggrieved person
35-4 is required to show:
35-5 (1) that the judgment is based on facts allowing
35-6 recovery under Section 156.501;
35-7 (2) that the person is not a spouse of the debtor, or
35-8 the personal representative of the spouse, and that the person is
35-9 not licensed as a mortgage broker or loan officer under this
35-10 chapter who is seeking to recover any compensation in the
35-11 transaction or transactions for which the application for payment
35-12 is made;
35-13 (3) that based on the best available information, the
35-14 judgment debtor lacks sufficient attachable assets in this state or
35-15 any other state to satisfy the judgment and the surety bond
35-16 required by Section 156.205 is not sufficient to satisfy the
35-17 judgment; and
35-18 (4) the amount that may be realized from the sale of
35-19 property or other assets liable to be sold or applied in
35-20 satisfaction of the judgment and the balance remaining due on the
35-21 judgment after application of the amount that may be realized.
35-22 (c) A recovery on the judgment against a single defendant
35-23 made before payment from the fund shall be applied first by the
35-24 creditor to actual damages.
35-25 (d) The court shall make an order directed to the
35-26 commissioner requiring payment from the fund of the amount the
36-1 court finds to be payable on the claim, pursuant to and in
36-2 accordance with the limitations contained in this subchapter, if
36-3 the court is satisfied, on the hearing, of the truth of all matters
36-4 required to be shown by the aggrieved person under Subsection (b)
36-5 and that the aggrieved person has satisfied all of the requirements
36-6 of this section.
36-7 (e) When the commissioner receives notice of entry of a
36-8 final judgment and a hearing is scheduled under this section, the
36-9 commissioner may notify the attorney general of the commissioner's
36-10 desire to enter an appearance, file a response, appear at the court
36-11 hearing, defend the action, or to take any other appropriate
36-12 action. In taking any action described by this subsection, the
36-13 commissioner and the attorney general shall act only to protect the
36-14 fund from spurious or unjust claims or to ensure compliance with
36-15 the requirements for recovery under this subchapter.
36-16 (f) The commissioner may relitigate any issue material and
36-17 relevant in the hearing on the application that was determined in
36-18 the underlying action on which the judgment in favor of the
36-19 applicant was based.
36-20 (g) If the court finds that the aggregate amount of claims
36-21 against a licensed mortgage broker or loan officer exceeds the
36-22 limits contained in Section 156.505, the court shall reduce
36-23 proportionately the amount the court finds payable on the claim.
36-24 Sec. 156.505. RECOVERY LIMITS. (a) A person entitled to
36-25 receive payment out of the fund is entitled to receive
36-26 reimbursement of actual, out-of-pocket damages, reasonable
37-1 attorney's fees, and court costs as determined by the court as
37-2 provided by this section.
37-3 (b) A payment from the fund may be made only pursuant to a
37-4 court order as provided by Section 156.504. A payment for claims:
37-5 (1) arising out of the same transaction, including
37-6 attorney's fees, interest, and court costs, is limited in the
37-7 aggregate to $25,000, regardless of the number of claimants; and
37-8 (2) based on judgments against a single person
37-9 licensed as a mortgage broker or loan officer under this chapter is
37-10 limited in the aggregate to $50,000 until the fund has been
37-11 reimbursed for all amounts paid.
37-12 Sec. 156.506. REVOCATION OF LICENSE FOR PAYMENT FROM FUND.
37-13 (a) The commissioner may revoke a license issued under this
37-14 chapter on proof that the commissioner has made a payment from the
37-15 fund of any amount toward satisfaction of a judgment against a
37-16 person licensed as a mortgage broker or loan officer under this
37-17 chapter.
37-18 (b) The commissioner may probate an order revoking a license
37-19 under this section.
37-20 (c) A person on whose behalf payment was made from the fund
37-21 is not eligible to receive a new license under this chapter until
37-22 the person has repaid in full, plus interest at the current legal
37-23 rate, the amount paid from the fund on the person's behalf.
37-24 (d) This section does not limit the authority of the
37-25 commissioner to take disciplinary action against a mortgage broker
37-26 or loan officer for a violation of this chapter or the rules
38-1 adopted by the commissioner under this chapter. The repayment in
38-2 full to the fund of all obligations of a mortgage broker or loan
38-3 officer does not nullify or modify the effect of any other
38-4 disciplinary proceeding brought under this chapter.
38-5 Sec. 156.507. SUBROGATION. When the commissioner has paid a
38-6 judgment creditor an amount from the fund as directed by the court,
38-7 the commissioner is subrogated to all of the rights of the judgment
38-8 creditor to the extent of the amount paid. The judgment creditor
38-9 shall assign all of the creditor's right, title, and interest in
38-10 the judgment up to the amount paid by the commissioner, and that
38-11 amount has priority for repayment in the event of any subsequent
38-12 recovery on the judgment. Any amount, including interest,
38-13 recovered by the commissioner on the judgment shall be deposited to
38-14 the credit of the fund.
38-15 Sec. 156.508. FAILURE TO COMPLY WITH SUBCHAPTER. The
38-16 failure of an aggrieved person to comply with a provision of this
38-17 subchapter relating to the fund constitutes a waiver of any rights
38-18 under this subchapter.
38-19 SECTION 3. Subsection (a), Section 393.002, Finance Code, is
38-20 amended to read as follows:
38-21 (a) This chapter does not apply to:
38-22 (1) a person:
38-23 (A) authorized to make a loan or grant an
38-24 extension of consumer credit under the laws of this state or the
38-25 United States; and
38-26 (B) subject to regulation and supervision by
39-1 this state or the United States;
39-2 (2) a lender approved by the United States secretary
39-3 of housing and urban development for participation in a mortgage
39-4 insurance program under the National Housing Act (12 U.S.C. Section
39-5 1701 et seq.);
39-6 (3) a bank or savings and loan association the
39-7 deposits or accounts of which are eligible to be insured by the
39-8 Federal Deposit Insurance Corporation or a subsidiary of the bank
39-9 or association;
39-10 (4) a credit union doing business in this state;
39-11 (5) a nonprofit organization exempt from taxation
39-12 under Section 501(c)(3), Internal Revenue Code of 1986 (26 U.S.C.
39-13 Section 501(c)(3));
39-14 (6) a real estate broker or salesman licensed under
39-15 The Real Estate License Act (Article 6573a, Vernon's Texas Civil
39-16 Statutes) who is acting within the course and scope of that
39-17 license;
39-18 (7) an individual licensed to practice law in this
39-19 state who is acting within the course and scope of the individual's
39-20 practice as an attorney;
39-21 (8) a broker-dealer registered with the Securities and
39-22 Exchange Commission or the Commodity Futures Trading Commission
39-23 acting within the course and scope of that regulation;
39-24 (9) a consumer reporting agency; [or]
39-25 (10) a person whose primary business is making loans
39-26 secured by liens on real property; or
40-1 (11) a mortgage broker or loan officer licensed under
40-2 Chapter 156, Finance Code, who is acting within the course and
40-3 scope of that license.
40-4 SECTION 4. Section 232.002, Family Code, is amended to read
40-5 as follows:
40-6 Sec. 232.002. LICENSING AUTHORITIES SUBJECT TO CHAPTER. The
40-7 following [state agencies] are licensing authorities subject to
40-8 this chapter:
40-9 (1) Department of Agriculture;
40-10 (2) Texas Commission on Alcohol and Drug Abuse;
40-11 (3) Texas Alcoholic Beverage Commission;
40-12 (4) Texas Appraiser Licensing and Certification Board;
40-13 (5) Texas Board of Architectural Examiners;
40-14 (6) State Board of Barber Examiners;
40-15 (7) Texas Board of Chiropractic Examiners;
40-16 (8) Comptroller of Public Accounts;
40-17 (9) Texas Cosmetology Commission;
40-18 (10) Court Reporters Certification Board;
40-19 (11) State Board of Dental Examiners;
40-20 (12) Texas State Board of Examiners of Dietitians;
40-21 (13) Texas Funeral Service Commission;
40-22 (14) Texas Department of Health;
40-23 (15) Texas Department of Human Services;
40-24 (16) Texas Board of Professional Land Surveying;
40-25 (17) Texas Department of Licensing and Regulation;
40-26 (18) Texas State Board of Examiners of Marriage and
41-1 Family Therapists;
41-2 (19) Texas State Board of Medical Examiners;
41-3 (20) Midwifery Board;
41-4 (21) Texas Natural Resource Conservation Commission;
41-5 (22) Board of Nurse Examiners;
41-6 (23) Texas Board of Occupational Therapy Examiners;
41-7 (24) Texas Optometry Board;
41-8 (25) Parks and Wildlife Department;
41-9 (26) Texas State Board of Examiners of Perfusionists;
41-10 (27) Texas State Board of Pharmacy;
41-11 (28) Texas Board of Physical Therapy Examiners;
41-12 (29) Texas State Board of Plumbing Examiners;
41-13 (30) Texas State Board of Podiatric Medical Examiners;
41-14 (31) Polygraph Examiners Board;
41-15 (32) Texas Board of Private Investigators and Private
41-16 Security Agencies;
41-17 (33) Texas State Board of Examiners of Professional
41-18 Counselors;
41-19 (34) Texas [State] Board of [Registration for]
41-20 Professional Engineers;
41-21 (35) Department of Protective and Regulatory Services;
41-22 (36) Texas State Board of Examiners of Psychologists;
41-23 (37) Texas State Board of Public Accountancy;
41-24 (38) Department of Public Safety of the State of
41-25 Texas;
41-26 (39) Public Utility Commission of Texas;
42-1 (40) Railroad Commission of Texas;
42-2 (41) Texas Real Estate Commission;
42-3 (42) State Bar of Texas;
42-4 (43) Texas State Board of Social Worker Examiners;
42-5 (44) State Board of Examiners for Speech-Language
42-6 Pathology and Audiology;
42-7 (45) Texas Structural Pest Control Board;
42-8 (46) Board of Tax Professional Examiners;
42-9 (47) Secretary of State;
42-10 (48) Supreme Court of Texas;
42-11 (49) Texas Transportation Commission;
42-12 (50) State Board of Veterinary Medical Examiners;
42-13 (51) Board of Vocational Nurse Examiners;
42-14 (52) Texas Ethics Commission;
42-15 (53) Advisory Board of Athletic Trainers;
42-16 (54) State Committee of Examiners in the Fitting and
42-17 Dispensing of Hearing Instruments;
42-18 (55) Texas Board of Licensure for Professional Medical
42-19 Physicists;
42-20 (56) Texas Department of Insurance; [and]
42-21 (57) Texas Board of Orthotics and Prosthetics; and
42-22 (58) savings and loan commissioner.
42-23 SECTION 5. (a) This Act takes effect September 1, 1999.
42-24 (b) A person is not required to be licensed under Chapter
42-25 156, Finance Code, as added by this Act, before January 1, 2000.
42-26 SECTION 6. The importance of this legislation and the
43-1 crowded condition of the calendars in both houses create an
43-2 emergency and an imperative public necessity that the
43-3 constitutional rule requiring bills to be read on three several
43-4 days in each house be suspended, and this rule is hereby suspended.
_______________________________ _______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 1074 passed the Senate on
April 16, 1999, by a viva-voce vote; and that the Senate concurred
in House amendments on May 25, 1999, by a viva-voce vote.
_______________________________
Secretary of the Senate
I hereby certify that S.B. No. 1074 passed the House, with
amendments, on May 23, 1999, by a non-record vote.
_______________________________
Chief Clerk of the House
Approved:
_______________________________
Date
_______________________________
Governor