79R4605 QS-F
By: Lucio S.B. No. 1057
A BILL TO BE ENTITLED
AN ACT
relating to protections for consumers in default on credit
transactions involving manufactured homes; providing a civil
penalty.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 347.355 and 347.356, Finance Code, are
amended to read as follows:
Sec. 347.355. REPOSSESSION ON DEFAULT. (a) Except as
provided by Subsection (b), if [If] a consumer is in default, the
creditor who possesses the first recorded perfected security
interest may repossess the manufactured home pursuant to judicial
process.
(b) If the manufactured home is abandoned [affixed to real
property], the creditor, after giving all appropriate notices under
Section 347.356, the contract, and other law, and after the
expiration of the applicable time periods [notice], may remove the
manufactured home without judicial process [from the real property
in accordance with the applicable provisions of the Business &
Commerce Code as if it were personal property].
Sec. 347.356. REQUIREMENTS FOR ACTION TO REPOSSESS,
FORECLOSE, OR ACCELERATE PAYMENT OF ENTIRE DEBT. (a) Before taking
any [An] action to repossess a manufactured home, foreclose a lien
on a manufactured home, or accelerate payment of the entire unpaid
balance of a credit transaction, the creditor must:
(1) send to the consumer and any guarantors, by
regular and certified mail, return receipt requested, a notice of
default informing the consumer of the alleged default and stating
that the consumer is entitled to cure or dispute the default within
the 30-day period following the date the notice is postmarked; and
(2) allow the consumer that period to cure or dispute
the default [comply with the regulations of the Office of Thrift
Supervision relating to the disclosure required for repossession,
foreclosure, or acceleration except in extreme circumstances,
including abandonment or voluntary surrender of the manufactured
home].
(b) For a default on payments or other charges owed,
notwithstanding any other provision of this subchapter, the notice
required by Subsection (a) may not include amounts other than the
amount owed that is in default. The creditor may collect other
amounts authorized by this subchapter only if the consumer fails to
cure or does not successfully dispute the default as permitted by
this section.
(c) If the negotiations that related to the execution of the
contract, sale, lien, or security interest were conducted primarily
in a language other than English, the creditor shall provide a copy
of the notice required by Subsection (a) in the language in which
the negotiations were conducted.
(d) The notice required by Subsection (a) must be in the
following or a substantially similar form:
To: ________________ [Name of Consumer]
Date: ______________
NOTICE OF DEFAULT AND RIGHT TO CURE OR DISPUTE A DEFAULT
___________________________________________________
[Name, address, and telephone number of the creditor]
____________________
Account Number [if any]
____________________
[Brief identification of the credit transaction]
YOU ARE NOW IN DEFAULT ON THIS CREDIT TRANSACTION. YOU HAVE A
RIGHT TO CURE OR DISPUTE THIS DEFAULT IN WRITING WITHIN 30 DAYS FROM
THE POSTMARKED DATE OF THIS NOTICE.
If you cure the default, you may continue with the contract as
though you did not default. Your default consists of:
_____________________________________________
[Describe default alleged.]
Cure of default: Within 30 days from the postmarked date of
this notice, you may cure your default by:
___________________________________________________
[Describe the acts necessary for cure, including, if
applicable, the amount of payment required and an itemized list of
amounts due and any deferral charges.]
Dispute of Default: Within 30 days from the postmarked date
of this notice, you may dispute your default by:
___________________________________________________
[Describe the acts necessary to dispute the default.]
Creditor's Rights: If you do not cure or dispute your default
in the time provided by the notice, we may exercise our rights
against you under the law by:
_____________________________
[Describe the action.]
Note: We cannot repossess the manufactured home without
authorization from a court, unless the home is abandoned. If we
institute proceedings in court, you will be given notice of such
proceedings.
If you have any questions or dispute the default, write
____________ [the creditor] at the above address or call
__________________[creditor's designated employee] at
____________________ [direct telephone number] between the hours
of ________ and _______on_______ [state days of the week].
If this default was caused by your failure to make a payment
or payments, and you want to pay by mail, please send a check or
money order; do not send cash.
(e) It is a false, misleading, or deceptive act or practice
within the meaning of Section 17.46, Business & Commerce Code, if a
creditor or debt collector threatens, represents, or states to a
consumer that the creditor or debt collector may repossess a
manufactured home or take another action permitted by this section
unless the creditor or debt collector also states or provides
notice that:
(1) the consumer has the right to cure or dispute the
default; and
(2) any repossession requires judicial approval by a
court unless the manufactured home has been abandoned.
(f) A person who violates this section is liable for a civil
penalty in an amount of $500 for each violation. The attorney
general or the prosecuting attorney in the county in which the
violation occurs may sue to recover a civil penalty under this
subsection. The attorney general shall, and the prosecuting
attorney may, deposit a civil penalty collected under this
subsection to the credit of an account in the general revenue fund.
The prosecuting attorney may retain a civil penalty collected under
this subsection.
SECTION 2. The change in law made by this Act applies only
to a repossession, foreclosure, or acceleration of debt maturity
under Section 347.356, Finance Code, that occurs on or after the
effective date of this Act. A repossession, foreclosure, or
acceleration of debt maturity occurring before the effective date
of this Act is governed by the law in effect at the time the
repossession, foreclosure, or acceleration occurred, and the
former law is continued in effect for that purpose.
SECTION 3. This Act takes effect September 1, 2005.