By: Lucio, Carona S.B. No. 1319
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to certain loans secured by a lien on residential real
  property and to other transactions involving residential real
  property; providing civil penalties.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Title 5, Finance Code, is amended by adding
  Chapter 397 to read as follows:
  CHAPTER 397. INFORMATION FURNISHED BY RESIDENTIAL MORTGAGE
  SERVICERS
  SUBCHAPTER A. GENERAL PROVISIONS
         Sec. 397.001.  DEFINITION. In this chapter, "mortgage
  servicer" has the meaning assigned by Section 51.0001, Property
  Code.
         Sec. 397.002.  APPLICABILITY. (a)  This chapter applies
  only to a loan secured by a first or subordinate lien on residential
  real property that is not:
               (1)  a federally related mortgage loan, as defined by
  12 U.S.C. Section 2602; or
               (2)  a loan that is primarily for business, commercial,
  or agricultural purposes, or for temporary financing, such as a
  construction loan, as referred to under 12 U.S.C. Section 2602.
         (b)  This chapter does not apply to a loan if the mortgage
  servicer is a natural person who is related to the borrower within
  the second degree by consanguinity or affinity, as determined under
  Subchapter B, Chapter 573, Government Code.
  [Sections 397.003-397.050 reserved for expansion]
  SUBCHAPTER B. BORROWER REQUESTS FOR INFORMATION
         Sec. 397.051.  RULES. The Finance Commission of Texas may
  adopt rules necessary to implement this subchapter.
         Sec. 397.052.  RECEIPTS FOR PAYMENTS REQUIRED. Each time a
  mortgage servicer accepts payment from a borrower, the mortgage
  servicer shall provide a receipt to the borrower that clearly and
  conspicuously states:
               (1)  the amount received by the mortgage servicer as
  payment toward the loan; and
               (2)  how the amount described by Subdivision (1) was
  applied to the borrower's account.
         Sec. 397.053.  ANNUAL ACCOUNTING STATEMENT. A mortgage
  servicer shall provide to the borrower an annual statement in
  January of each year for the term of the loan. The statement must
  clearly and conspicuously state the following information:
               (1)  the amount of each payment that was received by the
  mortgage servicer as payment toward the loan during the preceding
  calendar year;
               (2)  how each payment described by Subdivision (1) was
  applied to the borrower's account, including a statement of the
  amount of each payment that was applied to:
                     (A)  the borrower's principal obligation under
  the loan;
                     (B)  the interest charged on the loan;
                     (C)  any escrow or suspense account associated
  with the loan; and
                     (D)  any fee or other charge assessed against the
  borrower during the preceding calendar year; and
               (3)  the outstanding balance of the borrower's
  principal obligation under the loan.
         Sec. 397.054.  PAYOFF STATEMENTS. (a)  In this section,
  "payoff statement" has the meaning assigned by Section 12.017,
  Property Code.
         (b)  Except as provided by Subsection (c) and subject to
  Subsection (d), a mortgage servicer may not charge a fee for
  preparing or transmitting a payoff statement to a borrower or other
  person requesting a payoff statement on behalf of the borrower.
         (c)  A mortgage servicer may charge a reasonable processing
  fee to cover the cost of providing a payoff statement by facsimile
  transmission or by a courier service if, before charging the fee,
  the mortgage servicer discloses to the requestor that payoff
  statements are available for free if the requestor requests that
  the statement be provided in a manner that will not result in the
  charging of a processing fee.
         (d)  After a mortgage servicer has provided two payoff
  statements during a calendar year to or on behalf of a borrower
  under Subsection (b) without charge, other than processing fees
  authorized under Subsection (c), the mortgage servicer may charge a
  reasonable fee for providing a payoff statement to or on behalf of
  the borrower during the remainder of the calendar year.
         (e)  A mortgage servicer shall provide a payoff statement not
  later than the 10th day after the date the lender receives the
  request for the payoff statement from or on behalf of a borrower,
  and the statement must be valid for a reasonable time after being
  provided to the requestor.
         Sec. 397.055.  PROVISION OF INFORMATION REGARDING DISPUTE OR
  ERROR. (a)  A mortgage servicer shall provide a written statement
  to a borrower in response to a borrower's written request for
  information regarding a dispute or error involving the borrower's
  account that includes the following information, if requested:
               (1)  whether the account is current and an explanation
  of any default and the date the account went into default;
               (2)  the current balance due on the loan, including the
  principal due, the amount of any funds held in a suspense account,
  the amount of any escrow balance known to the servicer, and whether
  there are any escrow deficiencies or shortages known to the
  servicer;
               (3)  the identity, address, and other relevant
  information about the current holder, owner, or assignee of the
  loan; and
               (4)  the telephone number and mailing address of a
  servicer representative with the information and authority to
  answer questions and resolve disputes.
         (b)  A mortgage servicer must provide a statement under
  Subsection (a) on or before the 10th day after the date the servicer
  receives a written request from the borrower that:
               (1)  includes or otherwise enables the servicer to
  identify the name and account of the borrower; and
               (2)  includes a statement that the account is or may be
  in error or otherwise provides sufficient detail to the servicer
  regarding information sought by the borrower.
  [Sections 397.056-397.100 reserved for expansion]
  SUBCHAPTER C. REMEDIES
         Sec. 397.101.  ENFORCEMENT GENERALLY. The Department of
  Savings and Mortgage Lending, the attorney general, or any party to
  a loan to which this chapter applies may enforce this chapter.
         Sec. 397.102.  ACTION BY BORROWER. In addition to any other
  legal and equitable remedy available, a borrower injured by a
  violation of this chapter may bring an action:
               (1)  for injunctive relief to require compliance with
  this chapter; and
               (2)  to recover:
                     (A)  actual damages, including reasonable
  attorney's fees; and
                     (B)  $500 for each violation of this chapter.
         Sec. 397.103.  ACTION BY ATTORNEY GENERAL. (a)  The
  attorney general may bring an action on behalf of the state:
               (1)  for injunctive relief to require compliance with
  this chapter;
               (2)  to recover a civil penalty of $500 for each
  violation of this chapter; or
               (3)  for both injunctive relief and to recover the
  civil penalty.
         (b)  The attorney general is entitled to recover reasonable
  expenses incurred in obtaining injunctive relief or a civil
  penalty, or both, under this section, including court costs,
  reasonable attorney's fees, and investigatory costs.
         (c)  The court may make such additional orders or judgments
  as are necessary to compensate identifiable persons for actual
  damages or to restore money or property, real or personal, that may
  have been acquired by means of any violation of this chapter.
  Damages may not include any damages incurred beyond a point two
  years before the institution of the action by the attorney general.
  Orders of the court may also include the appointment of a receiver
  or a sequestration of assets if a person who has been ordered by a
  court to make restitution under this section has failed to do so
  within three months after the order to make restitution has become
  final and nonappealable.
         (d)  In bringing or participating in an action under this
  chapter, the attorney general acts in the name of the state and does
  not establish an attorney-client relationship with another person,
  including a person to whom the attorney general requests that the
  court award relief.
         SECTION 2.  Title 2, Business & Commerce Code, is amended by
  adding Chapter 21 to read as follows:
  CHAPTER 21.  EXECUTION OF DEEDS IN CERTAIN TRANSACTIONS INVOLVING
  RESIDENTIAL REAL ESTATE
         Sec. 21.001.  DEFINITION. In this chapter, "residential
  real estate" means real property on which a dwelling designed for
  occupancy for one to four families is constructed or intended to be
  constructed.
         Sec. 21.002.  PROHIBITION OF EXECUTION OF DEEDS CONVEYING
  RESIDENTIAL REAL ESTATE IN CERTAIN TRANSACTIONS. (a)  A seller of
  residential real estate or a person who makes an extension of credit
  and takes a security interest or mortgage against residential real
  estate may not, before or at the time of the conveyance of the
  residential real estate to the purchaser or the extension of credit
  to the borrower, request or require the purchaser or borrower to
  execute and deliver to the seller or person making the extension of
  credit a deed conveying the residential real estate to the seller or
  person making the extension of credit.
         (b)  A deed executed in violation of this section is voidable
  unless a subsequent purchaser of the residential real estate, for
  valuable consideration, obtains an interest in the property after
  the deed was recorded without notice of the violation, including
  notice provided by actual possession of the property by the grantor
  of the deed. The residential real estate continues to be subject to
  the security interest of a creditor who, without notice of the
  violation, granted an extension of credit to a borrower based on the
  deed executed in violation of this section.
         (c)  A purchaser or borrower must bring an action to void a
  deed executed in violation of this section not later than the fourth
  anniversary of the date the deed was recorded.
         Sec. 21.003.  CIVIL ACTION FOR DAMAGES. A person who
  violates Section 21.002 is liable to the purchaser or borrower for:
               (1)  actual damages;
               (2)  exemplary damages in an amount equal to or greater
  than $5,000 and not more than three times the amount of actual
  damages;
               (3)  court costs; and
               (4)  reasonable attorney's fees.
         SECTION 3.  Section 24.004, Property Code, is amended to
  read as follows:
         Sec. 24.004.  JURISDICTION; DISMISSAL. (a)  Except as
  provided by Subsection (b), a [A] justice court in the precinct in
  which the real property is located has jurisdiction in eviction
  suits. Eviction suits include forcible entry and detainer and
  forcible detainer suits.
         (b)  A justice court does not have jurisdiction in a forcible
  entry and detainer or forcible detainer suit and shall dismiss the
  suit if the defendant files a sworn statement alleging the suit is
  based on a deed executed in violation of Chapter 21, Business &
  Commerce Code.
         SECTION 4.  This Act takes effect September 1, 2011.