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A BILL TO BE ENTITLED
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AN ACT
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relating to the closing of a residential mortgage loan transaction |
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and liability of certain persons involved in the appraisal process. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter A, Chapter 2652, Insurance Code, is |
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amended by adding Section 2652.007 to read as follows: |
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Sec. 2652.007. COMPLIANCE WITH APPROVED SETTLEMENT |
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STATEMENT. (a) In this section: |
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(1) "Approved settlement statement" with respect to a |
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residential mortgage loan means the HUD-1 settlement statement or |
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other form of settlement statement authorized by the Real Estate |
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Settlement Procedures Act of 1974 (Pub. L. No. 93-533) that is |
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properly completed by an escrow officer and approved by the |
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mortgage lender before loan closing. |
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(2) "Mortgage lender" means the secured creditor or |
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creditors named in the residential mortgage loan documents and the |
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successors or assigns of the creditor or creditors. |
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(3) "Residential mortgage loan" means a loan or |
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agreement to extend credit made to a person and secured by a |
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mortgage or lien on residential real property, including a |
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refinancing or renewal of a loan secured by residential real |
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property. |
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(4) "Residential real property" means a single-family |
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house, townhouse, duplex, triplex, or quadruplex, or a condominium |
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or cooperative unit in a multifamily structure used or intended to |
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be used as a dwelling or for residential purposes. |
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(b) An escrow officer may not close a residential real |
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property transaction involving a residential mortgage loan and may |
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not disburse funds from the trust fund account for the transaction |
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except in strict compliance with an approved settlement statement |
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itemizing all charges to be imposed on, and adjustments to be given, |
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the parties to the transaction and the name of the recipient of each |
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of those charges and adjustments. |
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(c) The department shall adopt rules necessary or |
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appropriate to implement this section. |
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SECTION 2. Subchapter I, Chapter 1103, Occupations Code, is |
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amended by adding Section 1103.406 to read as follows: |
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Sec. 1103.406. LIABILITY OF APPRAISER. A person who holds a |
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license, certificate, or approval issued under this chapter and who |
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wilfully or negligently produces or endorses an appraisal that |
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fails to comply with the professional standards prescribed by |
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Section 1103.405 and expresses a final opinion of value that is |
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materially inaccurate is liable for all losses, including |
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attorney's fees and costs of collection, incurred in reliance on |
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the appraisal by any person for whose benefit the appraisal was |
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prepared and by any person the appraiser knew or could reasonably |
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have foreseen would use and rely on the appraisal. |
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SECTION 3. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2007. |
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