| |
| |
|
|
A BILL TO BE ENTITLED
|
|
|
AN ACT
|
|
|
relating to the regulation of mortgage brokers. |
|
|
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
|
|
SECTION 1. Subchapter C, Chapter 156, Finance Code, is |
|
|
amended by adding Sections 156.216 and 156.217 to read as follows: |
|
|
Sec. 156.216. MORTGAGE BROKER DUTIES. (a) A mortgage broker |
|
|
owes a fiduciary duty to a mortgage applicant in the origination of |
|
|
a mortgage loan. The exercise of this duty includes: |
|
|
(1) ensuring that any mortgage loan offered is |
|
|
affordable and meets the mortgage applicant's purposes, as |
|
|
determined by considering factors including: |
|
|
(A) the applicant's circumstances; |
|
|
(B) the purpose of the loan, including the reason |
|
|
why the applicant has applied for the loan; and |
|
|
(C) the applicant's ability to repay; |
|
|
(2) making reasonable efforts to secure a loan that is |
|
|
suitable to the mortgage applicant considering all of the |
|
|
circumstances, including interest rates, charges, and repayment |
|
|
terms of the loan and the loan options for which the applicant |
|
|
qualifies; and |
|
|
(3) offering the mortgage applicant the most favorable |
|
|
terms available to a person having the applicant's qualifications. |
|
|
(b) A mortgage applicant's statement of ability to repay a |
|
|
loan is not conclusive evidence of the applicant's ability to repay |
|
|
the loan. A mortgage broker must evaluate other reliable, |
|
|
objective evidence of affordability and ability to repay. |
|
|
(c) The duties of a mortgage broker may not be waived or |
|
|
disclaimed unless otherwise provided by law. |
|
|
Sec. 156.217. PROHIBITED PRACTICES. (a) A mortgage broker |
|
|
may not recommend or make a mortgage loan that contains a provision |
|
|
for a prepayment penalty. |
|
|
(b) A mortgage broker may not receive any yield-spread |
|
|
premium from a lender for processing and originating a mortgage |
|
|
loan. |
|
|
(c) A mortgage broker may not recommend to a mortgage |
|
|
applicant an interest rate, charge, principal amount, or prepayment |
|
|
term that is not suitable to the mortgage applicant considering all |
|
|
of the applicant's circumstances, including the characteristics of |
|
|
the property that secures or will secure the mortgage loan and the |
|
|
loan terms for which the mortgage applicant qualifies. |
|
|
(d) A mortgage broker may not: |
|
|
(1) mischaracterize: |
|
|
(A) a mortgage applicant's credit history; or |
|
|
(B) the mortgage loans available to an applicant; |
|
|
(2) discourage a mortgage applicant from seeking a |
|
|
mortgage loan from another creditor or with another mortgage |
|
|
broker, if the mortgage broker is unable to offer or recommend a |
|
|
suitable mortgage loan to the applicant; |
|
|
(3) misrepresent the material facts or knowingly make |
|
|
a false promise likely to induce an applicant to obtain a mortgage |
|
|
loan, or pursue a course of misrepresentation through an agent or |
|
|
otherwise; |
|
|
(4) misrepresent to or conceal from a mortgage |
|
|
applicant material factors or terms of a mortgage loan transaction; |
|
|
(5) fail to disburse funds in accordance with an |
|
|
agreement; |
|
|
(6) engage in a transaction, practice, or course of |
|
|
business that operates a fraud on a person or violates Subchapter E, |
|
|
Chapter 17, Business & Commerce Code; |
|
|
(7) fraudulently or deceitfully advertise a mortgage |
|
|
loan or misrepresent the terms or charges incidental to a mortgage |
|
|
loan in an advertisement; |
|
|
(8) recommend or encourage default on an existing loan |
|
|
or other debt before and in connection with the closing or planned |
|
|
closing of a mortgage loan that refinances all or a portion of that |
|
|
existing loan or debt; |
|
|
(9) knowingly engage in the practice of making a home |
|
|
loan to a mortgage applicant who refinances an existing loan if the |
|
|
new loan does not have a reasonable, tangible net benefit to the |
|
|
mortgage applicant considering all of the circumstances, including |
|
|
the terms of the new and refinanced loans, the cost of the new loan, |
|
|
and the mortgage applicant's circumstances; and |
|
|
(10) influence or attempt to influence through direct |
|
|
or indirect means the outcome of a real estate appraisal sought in |
|
|
connection with a mortgage loan, or otherwise engage in a practice |
|
|
or course of business that induces or attempts to induce a real |
|
|
estate appraiser to violate the Uniform Standards of Professional |
|
|
Appraisal Practice in connection with a mortgage loan. |
|
|
(e) This section does not prohibit a mortgage broker from |
|
|
providing a mortgage applicant with accurate, unbiased, or general |
|
|
information about consumer home loans, underwriting standards, |
|
|
methods of improving credit history, or other matters relevant to a |
|
|
mortgage applicant. |
|
|
SECTION 2. This Act takes effect September 1, 2009. |