79R5666 DWS-F

By:  Shapleigh                                                    S.B. No. 618



A BILL TO BE ENTITLED

AN ACT

relating to disclosures in connection with certain home loans; 
providing a penalty.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Subchapter B, Chapter 343, Finance Code, is 
amended by adding Sections 343.102 and 343.103 to read as follows:
	Sec. 343.102.  DISCLOSURE IN CONNECTION WITH CERTAIN HOME 
LOANS.  (a)  For a home loan with an interest rate of 12 percent or 
greater a year, not later than 48 hours before the date of closing, 
the lender shall provide to the borrower:
		(1)  a statement regarding the value of mortgage 
counseling before taking out a home loan;
		(2)  a list of the nearest available housing counseling 
agencies approved by the United States Department of Housing and 
Urban Development;
		(3)  a list of other resources where mortgage 
information can be found, including toll-free telephone numbers and 
online resources;
		(4)  a statement of the loan fees to be paid by the 
borrower; and    
		(5)  other disclosures required by the finance 
commission, including an official notice regarding high-cost home 
loans.
	(b)  A disclosure of fees under Subsection (a)(4) must be in 
a form substantially similar to the documents that will be used for 
the closing.
	(c)  If, before closing, the total amount of fees disclosed 
under Subsection (a)(4) changes by an amount that exceeds the 
lesser of $400 or one-half percent of the amount of the loan, the 
lender shall provide the borrower a written notice of the revised 
amount.  The loan may not be closed before 48 hours after the date of 
the notice provided under this subsection.
	(d)  If the home loan was negotiated primarily in Spanish, 
the borrower shall be provided a Spanish translation of the 
information required to be provided under this section.
	(e)  The borrower may modify or waive the waiting period 
provided by this section, if the borrower determines that the loan 
is needed to meet a personal financial emergency, by providing the 
lender a dated, written, and signed statement that describes the 
emergency and specifically modifies or waives the waiting period. 
The statement under this subsection may not be on a form provided by 
the lender or on the lender's behalf.
	Sec. 343.103.  PENALTIES FOR FAILURE TO PROVIDE DISCLOSURE.  
A person who knowingly and wilfully violates Section 343.102 is 
liable to the aggrieved borrower for:
		(1)  the actual damages caused by the violation;                       
		(2)  punitive damages not to exceed $10,000 in an 
action brought by the aggrieved borrower; and
		(3)  court costs.                                                      
	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 is closed, and the former law is continued 
in effect for that purpose.
	SECTION 3.  This Act takes effect September 1, 2005.