By Olivo                                              H.B. No. 3241
         77R9015 DWS-F                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to certain insurance and fees in connection with a home
 1-3     loan.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1. Subtitle B, Title 4, Finance Code, is amended by
 1-6     adding Chapter 343 to read as follows:
 1-7                           CHAPTER 343. HOME LOANS
 1-8           Sec. 343.001.  CREDIT INSURANCE; FEE FOR DEBT CANCELLATION OR
 1-9     SUSPENSION. (a)  In this section:
1-10                 (1)  "Home loan" means a loan to one or more
1-11     individuals, other than a reverse mortgage, in which:
1-12                       (A)  the principal amount does not exceed the
1-13     conforming loan size limit for a single-family dwelling established
1-14     by the Federal National Mortgage Association;
1-15                       (B)  the debt is incurred primarily for personal,
1-16     family, or household purposes; and
1-17                       (C)  the loan is secured by a mortgage or deed of
1-18     trust on real property on which is located or is to be located one
1-19     or more structures designed principally for occupancy by four or
1-20     fewer families that are or will be occupied by the borrower as the
1-21     borrower's principal residence.
1-22                 (2)  "Lender" means an entity that originated, or acted
1-23     as an intermediary between originators and borrowers, on more than
1-24     five home loans within the preceding 12-month period.
 2-1           (b)  A lender, in connection with a home loan, may not
 2-2     require or allow the advance collection of:
 2-3                 (1)  a premium, on a single premium basis, for any
 2-4     credit life insurance, credit health and life insurance, or similar
 2-5     insurance, regardless of whether the premium is paid directly by
 2-6     the borrower or financed through the loan; or
 2-7                 (2)  a fee for a debt cancellation or suspension
 2-8     agreement in connection with a home loan, regardless of whether the
 2-9     fee is paid directly by the borrower or financed through the loan.
2-10           SECTION 2. This Act takes effect September 1, 2001, and
2-11     applies only to a loan closed on or after that date.