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A BILL TO BE ENTITLED
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AN ACT
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relating to the notice required by certain mortgage servicers |
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before foreclosing a contract lien on certain real property; |
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providing civil penalties. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Chapter 51, Property Code, is amended by adding |
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Section 51.0022 to read as follows: |
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Sec. 51.0022. PRE-FORECLOSURE REQUIREMENTS FOR CERTAIN |
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MORTGAGE SERVICERS. (a) This section applies to the foreclosure of |
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a contract lien on residential real property occupied by an owner of |
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the property if the mortgagee is a financial institution that |
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requested and received funds from the federal government as |
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provided by the Emergency Economic Stabilization Act of 2008 (Pub. |
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L. No. 110-343). |
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(b) A mortgagee may not accelerate a repayment of a debt |
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secured by a contract lien to which this section applies or post |
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real property for a foreclosure sale under Section 51.002 unless |
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the mortgage servicer, not earlier than the 90th day before the date |
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on which the debt was accelerated or the property is posted for |
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foreclosure or later than the 60th day before that date, sends a |
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notice to the debtor, in the form prescribed under Subsection (h), |
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by regular mail and by certified mail, return receipt requested, |
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that states in 14-point or larger type that the debtor has the right |
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to enter into mediation. |
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(c) A mortgage servicer that gives notice under Subsection |
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(b) must prepare a written affirmation that indicates: |
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(1) the mortgage servicer provided the notice in |
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accordance with Subsection (b); and |
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(2) whether: |
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(A) the mortgage servicer mediated the dispute |
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without resolution; |
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(B) the mortgage servicer mediated the dispute |
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and the debtor failed to comply with a substantive term of an |
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agreement reached in the mediation; or |
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(C) the debtor refused to engage in mediation |
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after receiving notice of the right to mediate the dispute. |
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(d) A debtor is entitled to mediation under this section if |
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the debtor or the debtor's authorized agent sends a written notice |
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indicating the debtor's election to mediate on or before the 30th |
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day after the postmark date on the notice sent by the mortgage |
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servicer by certified mail under Subsection (b). A notice of the |
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debtor's election to mediate may be delivered by hand, e-mailed, |
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faxed, or mailed. |
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(e) If mediation is timely elected by the debtor, the |
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mortgage servicer shall cease all collection activity on the debt |
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until the earlier of: |
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(1) the date on which the mediation is completed; or |
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(2) the 60th day after the date on which the debtor |
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notifies the mortgage servicer of the debtor's election to mediate. |
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(f) A debtor may receive assistance in conducting the |
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mediation from a housing counselor approved by the United States |
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Department of Housing and Urban Development. A formal, in-person |
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mediation may be conducted with the consent of the debtor and the |
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mortgage servicer. If the debtor or mortgage servicer does not |
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consent to a formal mediation, an informal mediation may be |
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conducted through multiple telephone conversations between the |
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mortgage servicer and the debtor. Individuals engaged in a |
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mediation under this section must have actual authority to |
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negotiate the terms, conditions, fees, and other issues surrounding |
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the foreclosure and the underlying debt. |
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(g) A mortgage servicer who violates this section is liable |
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for a person's actual damages arising from the violation and for a |
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civil penalty of not more than $2,000. A person may file an action |
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to seek injunctive relief for a violation of this section. |
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(h) The Texas Department of Housing and Community Affairs |
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shall prescribe the form of the notice required by Subsection (b). |
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SECTION 2. The changes in law made by this Act apply only to |
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the acceleration of repayment for a debt secured by residential |
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real property or the posting of real property for a foreclosure sale |
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on or after the effective date of this Act. The acceleration of |
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repayment of a debt or the posting of real property for a |
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foreclosure sale before the effective date of this Act is governed |
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by the law in effect immediately before the effective date of this |
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Act, and that law is continued in effect for that purpose. |
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SECTION 3. This Act takes effect September 1, 2009. |