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A BILL TO BE ENTITLED
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AN ACT
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relating to mortgage loans. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Sections 51.002(d) and (e), Property Code, are |
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amended to read as follows: |
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(d) Notwithstanding any agreement to the contrary, the |
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mortgage servicer of the debt shall serve a debtor in default under |
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a security instrument imposing a [deed of trust or other] contract |
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lien on real property and each other person having a recorded |
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interest in the real property [used as the debtor's residence] with |
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written notice by certified mail stating that the debtor is in |
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default under the security instrument imposing the [deed of trust
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or other] contract lien, providing a full written disclosure of the |
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terms of the security instrument, and giving the debtor and any |
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other person entitled to the notice at least 30 [20] days to cure |
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the default before notice of sale can be given under Subsection (b). |
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The entire calendar day on which the notice required by this |
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subsection is given, regardless of the time of day at which the |
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notice is given, is included in computing the [20-day] notice |
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period required by this subsection, and the entire calendar day on |
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which notice of sale is given under Subsection (b) is excluded in |
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computing the [20-day] notice period. |
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(e) Service of a notice under this section by certified mail |
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is complete when the notice is deposited in the United States mail, |
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postage prepaid and addressed to the person entitled to notice |
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[debtor] at the person's [debtor's] last known address. The |
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affidavit of a person knowledgeable of the facts to the effect that |
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service was completed is prima facie evidence of service. |
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SECTION 2. Section 51.0021, Property Code, is amended to |
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read as follows: |
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Sec. 51.0021. NOTICE OF CHANGE OF ADDRESS [REQUIRED]. A |
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debtor shall, and any other person entitled to notice from a |
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mortgagee or mortgage servicer under this chapter may, inform the |
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mortgage servicer of the debt in a reasonable manner of any change |
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of the person's address [of the debtor] for purposes of providing |
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notice to the person [debtor] under Section 51.002 or another |
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provision of this chapter. |
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SECTION 3. Chapter 51, Property Code, is amended by adding |
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Sections 51.0022 and 51.0023 to read as follows: |
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Sec. 51.0022. DISCLOSURE OF TERMS OF SECURITY INSTRUMENT. |
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Not later than the 90th day after the date on which a mortgagee or |
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the mortgagee's mortgage servicer receives a written request from a |
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person having a recorded interest in real property that is subject |
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to a contract lien in which the mortgagee has an interest, the |
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mortgagee or mortgage servicer shall provide the person a full |
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written disclosure of the terms of the security instrument. |
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Sec. 51.0023. JUDICIAL FORECLOSURE: NOTICE OF DEFAULT AND |
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RIGHT TO CURE. (a) Before a mortgagee or mortgage servicer |
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commences a judicial foreclosure proceeding, the mortgagee or |
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mortgage servicer must serve each person having a recorded interest |
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in the real property that is subject to the deed of trust or other |
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contract lien being foreclosed, regardless of whether the person is |
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liable on the debt secured by the contract lien, with written notice |
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by certified mail stating that the debtor is in default under the |
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security instrument imposing the contract lien, providing a full |
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written disclosure of the terms of the security instrument, and |
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giving the person at least 30 days to cure the default before a |
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foreclosure proceeding can be commenced. |
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(b) The entire calendar day on which the notice required by |
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this section is given, regardless of the time of day at which the |
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notice is given, is included in computing the notice period |
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required by this section, and the entire calendar day on which the |
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judicial foreclosure proceeding is commenced is excluded in |
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computing the notice period. |
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(c) Service of a notice under this section by certified mail |
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is complete when the notice is deposited in the United States mail, |
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postage prepaid and addressed to the person entitled to notice at |
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the person's last known address. The affidavit of a person |
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knowledgeable of the facts to the effect that service was completed |
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is prima facie evidence of service. |
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SECTION 4. Subtitle B, Title 4, Finance Code, is amended by |
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adding Chapter 343A to read as follows: |
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CHAPTER 343A. REPAYMENT OF REVERSE MORTGAGE LOAN |
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Sec. 343A.001. DEFINITIONS. In this chapter: |
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(1) "Personal representative" has the meaning |
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assigned by Section 3, Texas Probate Code. |
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(2) "Reverse mortgage" means an extension of credit |
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that meets the requirements of Sections 50(k)-(p), Article XVI, |
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Texas Constitution. |
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Sec. 343A.002. PROCEDURES FOR REPAYMENT FOLLOWING DEATH OF |
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BORROWERS. A lender who makes a reverse mortgage shall allow for |
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the repayment of the advances made under the extension of credit |
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after the death of all borrowers who entered into the loan as |
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provided by this chapter. |
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Sec. 343A.003. REQUEST BY HEIR OR REPRESENTATIVE OF |
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BORROWER'S ESTATE. (a) Following the death of all borrowers who |
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entered into a reverse mortgage with a lender, a person who is an |
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heir of the estate of the last surviving borrower may: |
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(1) establish with the lender that the person is an |
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heir by: |
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(A) showing that the person is named in the |
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borrower's will as an heir entitled to all or part of the real |
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property securing the reverse mortgage; or |
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(B) showing evidence of filing an affidavit of |
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the borrower's death with the recorder of deeds that establishes |
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the person's identity as an heir entitled to the real property; and |
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(2) request a disclosure of the terms of the reverse |
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mortgage and a statement of the amount of advances made under the |
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extension of credit and the amount owed on the obligation. |
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(b) A personal representative of the last surviving |
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borrower's estate may make a request under this section on behalf of |
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an heir of the borrower if the representative establishes with the |
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lender that the representative: |
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(1) is named in the will of the borrower to serve as |
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personal representative of the estate; or |
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(2) has been appointed by a probate court to serve as |
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personal representative of the estate. |
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Sec. 343A.004. DISCLOSURE. (a) A lender who receives a |
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request under Section 343A.003 shall provide to the heir or |
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representative making the request: |
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(1) a full written disclosure of the terms of the |
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reverse mortgage and a statement that contains the information |
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described by Section 343A.003(a)(2); and |
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(2) a written offer to the heirs for the repayment of |
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the mortgage that: |
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(A) allows the heir a repayment period of at |
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least 15 years; |
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(B) provides for interest to be charged at a rate |
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not to exceed the average rate of interest charged on reverse |
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mortgage loans on the date of the borrower's death; and |
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(C) provides for a period of at least 90 days |
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after the date the information is sent for the offer to be accepted. |
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(b) The information required under Subsection (a) must be |
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mailed to the heir or the personal representative, by certified |
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mail, return receipt requested, not later than the earlier of: |
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(1) the 90th day after the date the lender receives the |
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request; or |
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(2) the 90th day before the date the lender commences |
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any foreclosure proceedings. |
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SECTION 5. (a) Sections 51.002(d) and (e), Property Code, |
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as amended by this Act, apply to a foreclosure for which a notice of |
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sale under Section 51.002(b), Property Code, is given on or after |
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the effective date of this Act, unless the notice of default was |
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given under Section 51.002(d), Property Code, before the effective |
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date of this Act. A foreclosure for which the notice of default was |
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given before the effective date of this Act is governed by the law |
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in effect immediately before the effective date of this Act, and |
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that law is continued in effect for that purpose. |
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(b) Chapter 343A, Finance Code, as added by this Act, |
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applies to a reverse mortgage entered into by an individual whose |
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death occurs on or after the effective date of this Act without |
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regard to whether the mortgage was entered into before, on, or after |
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the effective date of this Act. |
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SECTION 6. This Act takes effect September 1, 2011. |