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A BILL TO BE ENTITLED
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AN ACT
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relating to the right of certain debtors to elect to mediate a |
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dispute before the debt is accelerated or a contract lien on real |
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property is foreclosed; 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-ACCELERATION AND PRE-FORECLOSURE |
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REQUIREMENTS FOR CERTAIN MORTGAGE SERVICERS: MEDIATION. (a) This |
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section applies to a contract lien on residential real property |
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occupied by an owner of the property if the mortgagee is a financial |
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institution that requested and received funds from the federal |
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government as provided by the Emergency Economic Stabilization Act |
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of 2008 (Pub. 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 that is subject to the lien for a foreclosure sale |
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under Section 51.002 unless the mortgage servicer, not earlier than |
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the 90th day before the date on which the debt is accelerated or the |
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property is posted for foreclosure or later than the 60th day before |
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that date, sends a notice to the debtor, in the form prescribed |
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under Subsection (h), by regular mail and by certified mail, return |
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receipt requested, that states in 14-point or larger type that the |
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debtor has the right 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 residential real property for a |
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foreclosure sale on or after the effective date of this Act. The |
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acceleration of repayment of a debt or the posting of residential |
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real property for a foreclosure sale before the effective date of |
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this Act is governed by the law in effect immediately before the |
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effective date of this Act, and that law is continued in effect for |
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that purpose. |
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SECTION 3. This Act takes effect September 1, 2011. |