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A BILL TO BE ENTITLED
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AN ACT
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relating to the requirement of a net benefit in connection with a |
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home loan that refinances an existing loan. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter B, Chapter 343, Finance Code, is |
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amended by adding Section 343.106 to read as follows: |
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Sec. 343.106. NET BENEFIT REQUIRED. A lender may not make a |
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home loan to a borrower that refinances an existing home loan if the |
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new loan does not have a reasonable, tangible net benefit to the |
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borrower considering all of the circumstances, including the terms |
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of the new and refinanced loans and the borrower's stated loan |
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objectives, repayment ability, current and expected income, and |
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current obligations. |
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SECTION 2. The change in law made by this Act applies only |
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to a loan closed on or after the effective date of this Act. A loan |
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closed before the effective date of this Act is governed by the law |
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in effect when the loan was closed, and the former law is continued |
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in effect for that purpose. |
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SECTION 3. This Act takes effect September 1, 2009. |