79R4929 HLT-D

By:  Thompson                                                     H.B. No. 1387



A BILL TO BE ENTITLED

AN ACT

relating to the requirement of a net benefit in connection with a 
home loan that refinances an existing loan.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Subchapter B, Chapter 343, Finance Code, is 
amended by adding Section 343.105 to read as follows:
	Sec. 343.105.  NET BENEFIT REQUIRED.  A lender may not make 
a home loan to a borrower that refinances an existing home loan if 
the new loan does not have a reasonable, tangible net benefit to the 
borrower considering all of the circumstances, including the terms 
of both the new and refinanced loans and the borrower's stated loan 
objectives, repayment ability, current and expected income, and 
current obligations.
	SECTION 2.  The change in law made by this Act applies only 
to a loan closed on or after the effective date of this Act.  A loan 
closed before the effective date of this Act is governed by the law 
in effect when the loan was closed, and the former law is continued 
in effect for that purpose.
	SECTION 3.  This Act takes effect September 1, 2005.