SRC-MWN H.B. 1268 77(R)   BILL ANALYSIS


Senate Research Center   H.B. 1268
By: Dukes (Jackson)
Business & Commerce
5/11/2001
Engrossed


DIGEST AND PURPOSE 

Current law attempts to deter the practice of appraisal fixing by providing
penalties for appraisers who provide or offer to provide an artificially
high or low appraisal in exchange for some derived benefit from the lender
requesting their services. However, without similar penalties for lenders
who attempt to secure an artificial appraisal, the law only addresses half
of the problem. H. B. 1268 makes it a Class A misdemeanor if a lender makes
or attempts to make a contract with an appraiser that is contingent on a
minimum, maximum, or pre-agreed estimate of property value when securing a
residential mortgage loan.  

RULEMAKING AUTHORITY

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

SECTION BY SECTION ANALYSIS

H.B. 1268 amends the Business & Commerce Code to provide that a lender
commits a Class A misdemeanor offense if, in connection with a mortgage
loan transaction, the lender compensates or offers to compensate a person
for appraisal services and the compensation is contingent on a minimum,
maximum, or pre-agreed estimate of value of the property securing the loan
and interferes with the person's ability or obligation to provide an
independent and impartial opinion of the property's value.  

Effective date: September 1, 2001.