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A BILL TO BE ENTITLED
|
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AN ACT
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relating to the regulation of residential mortgage loan |
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originators, residential mortgage loan companies, mortgage |
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bankers, and residential mortgage loan servicers under the |
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jurisdiction of the Department of Savings and Mortgage Lending; |
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providing for the imposition of fees. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. The heading to Chapter 156, Finance Code, is |
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amended to read as follows: |
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CHAPTER 156. RESIDENTIAL MORTGAGE LOAN COMPANIES [AND RESIDENTIAL
|
|
MORTGAGE LOAN ORIGINATORS] |
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SECTION 2. Section 156.001, Finance Code, is amended to |
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read as follows: |
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Sec. 156.001. SHORT TITLE. This chapter may be cited as |
|
the Residential Mortgage Loan Company [and Residential Mortgage
|
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Loan Originator] Licensing and Registration Act. |
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SECTION 3. Section 156.002, Finance Code, is amended by |
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adding Subdivision (4-b) and amending Subdivision (10-b) to read as |
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follows: |
|
(4-b) "Inspection" includes examination. |
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(10-b) "Qualifying individual" means an individual |
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who is: |
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(A) licensed under Chapter 157 [this chapter] as |
|
a residential mortgage loan originator; and |
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(B) [is] designated by a residential mortgage |
|
loan company as the company's representative [for purposes of the
|
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Nationwide Mortgage Licensing System and Registry]. |
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SECTION 4. The heading to Section 156.101, Finance Code, is |
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amended to read as follows: |
|
Sec. 156.101. ADMINISTRATION AND ENFORCEMENT OF CHAPTER; |
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PARTICIPATION IN NATIONWIDE REGISTRY. |
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SECTION 5. Section 156.101(a), Finance Code, as amended by |
|
Chapters 1104 (H.B. 10) and 1317 (H.B. 2774), Acts of the 81st |
|
Legislature, Regular Session, 2009, is reenacted and amended to |
|
read as follows: |
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(a) The [Except as provided by Subsection (a-2), the] |
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commissioner shall administer and enforce this chapter. |
|
SECTION 6. Section 156.102(a), Finance Code, is amended to |
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read as follows: |
|
(a) The finance commission may adopt and enforce rules |
|
necessary for the intent of or to ensure compliance with this |
|
chapter[, except as provided by Section 15.4024 with respect to
|
|
employees of credit union subsidiary organizations subject to
|
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regulation under Section 156.2015]. |
|
SECTION 7. Section 156.104(h), Finance Code, is amended to |
|
read as follows: |
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(h) In addition to other powers and duties delegated to the |
|
advisory committee by the commissioner, the advisory committee |
|
shall advise the commissioner with respect to: |
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(1) the proposal and adoption of rules relating to [:
|
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[(A)] the licensing of [residential mortgage
|
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loan originators or] residential mortgage loan companies[;
|
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[(B)
the education and experience requirements
|
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for licensing residential mortgage loan originators; and
|
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[(C)
the conduct and ethics of residential
|
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mortgage loan originators]; |
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(2) the form of or format for any applications or other |
|
documents under this chapter; and |
|
(3) the interpretation, implementation, and |
|
enforcement of this chapter. |
|
SECTION 8. The heading to Subchapter C, Chapter 156, |
|
Finance Code, is amended to read as follows: |
|
SUBCHAPTER C. RESIDENTIAL MORTGAGE LOAN COMPANY [AND RESIDENTIAL
|
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MORTGAGE LOAN ORIGINATOR] LICENSES AND REGISTRATION |
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SECTION 9. Section 156.201(c), Finance Code, is amended to |
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read as follows: |
|
(c) Each residential mortgage loan company and the |
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company's qualifying individual licensed under Chapter 157 [this
|
|
chapter] is responsible to the commissioner and members of the |
|
public for any act or conduct performed by the residential mortgage |
|
loan originator sponsored by or acting for the residential mortgage |
|
loan company in connection with: |
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(1) the origination of a residential mortgage loan; or |
|
(2) a transaction that is related to the origination |
|
of a residential mortgage loan in which the qualifying individual |
|
knew or should have known of the transaction. |
|
SECTION 10. Sections 156.202(a) and (a-1), Finance Code, |
|
are amended to read as follows: |
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(a) In this section, "depository institution[,]" has |
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["dwelling," "federal banking agency," and "immediate family
|
|
member" have] the meaning [meanings] assigned by Section 180.002. |
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(a-1) The following [individuals or] entities[, and
|
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employees of those entities when acting for the benefit of those
|
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entities,] are exempt from this chapter: |
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(1) [a registered mortgage loan originator when acting
|
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for:
|
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[(A) a depository institution;
|
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[(B)
a subsidiary of a depository institution
|
|
that is:
|
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[(i)
owned and controlled by the depository
|
|
institution; and
|
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[(ii)
regulated by a federal banking
|
|
agency; or
|
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[(C)
an institution regulated by the Farm Credit
|
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Administration;
|
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[(2)
an individual who offers or negotiates the terms
|
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of a residential mortgage loan with or on behalf of an immediate
|
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family member of the individual;
|
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[(3)
a licensed attorney who negotiates the terms of a
|
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residential mortgage loan on behalf of a client as an ancillary
|
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matter to the attorney's representation of the client, unless the
|
|
attorney:
|
|
[(A)
takes a residential mortgage loan
|
|
application; and
|
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[(B)
offers or negotiates the terms of a
|
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residential mortgage loan;
|
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[(4)
an individual who offers or negotiates terms of a
|
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residential mortgage loan secured by a dwelling that serves as the
|
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individual's residence;
|
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[(5)] a nonprofit organization providing self-help |
|
housing that originates zero interest residential mortgage loans |
|
for borrowers who have provided part of the labor to construct the |
|
dwelling securing the loan; |
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(2) [(6)] a mortgage banker registered under Chapter |
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157; |
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(3) [(7)] any owner of residential real estate who in |
|
any 12-consecutive-month period makes no more than five residential |
|
mortgage loans to purchasers of the property for all or part of the |
|
purchase price of the residential real estate against which the |
|
mortgage is secured; and |
|
(4) [(8)] an entity that is: |
|
(A) a depository institution; |
|
(B) a subsidiary of a depository institution that |
|
is: |
|
(i) owned and controlled by the depository |
|
institution; and |
|
(ii) regulated by a federal banking agency; |
|
or |
|
(C) an institution regulated by the Farm Credit |
|
Administration[; and
|
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[(9)
an individual who is exempt as provided by
|
|
Section 180.003(b)]. |
|
SECTION 11. Section 156.203(a-1), Finance Code, is amended |
|
to read as follows: |
|
(a-1) An application for a residential mortgage loan |
|
company license [and a residential mortgage loan originator
|
|
license] must be: |
|
(1) in writing; |
|
(2) under oath; and |
|
(3) on the form prescribed by the commissioner. |
|
SECTION 12. The heading to Section 156.2041, Finance Code, |
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is amended to read as follows: |
|
Sec. 156.2041. QUALIFICATIONS AND REQUIREMENTS FOR LICENSE |
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[LICENSES]: MORTGAGE COMPANY [AND RESIDENTIAL MORTGAGE LOAN
|
|
ORIGINATORS]. |
|
SECTION 13. Section 156.2041(a), Finance Code, is amended |
|
to read as follows: |
|
(a) To be issued a mortgage company license, an applicant |
|
must: |
|
(1) submit a completed application together with the |
|
payment of applicable fees through the Nationwide Mortgage |
|
Licensing System and Registry; |
|
(2) designate control persons for the mortgage company |
|
through the Nationwide Mortgage Licensing System and Registry; |
|
(3) designate an individual licensed as a residential |
|
mortgage loan originator under Chapter 157 [this chapter] as the |
|
company's qualifying individual; |
|
(4) submit a completed branch application through the |
|
Nationwide Mortgage Licensing System and Registry for each branch |
|
office that engages in residential mortgage loan activity on |
|
residential real estate located in this state; |
|
(5) not be in violation of this chapter, a rule adopted |
|
under this chapter, or any order previously issued by the |
|
commissioner to the applicant; |
|
(6) have the company name or assumed name properly |
|
filed with either the secretary of state or with the appropriate |
|
county clerk's office; |
|
(7) maintain a physical office in this state; and |
|
(8) provide financial statements and any other |
|
information required by the commissioner. |
|
SECTION 14. The heading to Section 156.2042, Finance Code, |
|
is amended to read as follows: |
|
Sec. 156.2042. QUALIFICATIONS AND REQUIREMENTS FOR LICENSE |
|
[LICENSES]: CREDIT UNION SUBSIDIARY ORGANIZATION [AND RESIDENTIAL
|
|
MORTGAGE LOAN ORIGINATORS]. |
|
SECTION 15. Section 156.2042(a), Finance Code, is amended |
|
to read as follows: |
|
(a) To be issued a credit union subsidiary organization |
|
license, an applicant must: |
|
(1) submit a completed application together with the |
|
payment of applicable fees through the Nationwide Mortgage |
|
Licensing System and Registry; |
|
(2) designate control persons for the organization |
|
through the Nationwide Mortgage Licensing System and Registry; |
|
(3) designate an individual licensed as a residential |
|
mortgage loan originator under Chapter 157 [this chapter] as the |
|
company's qualifying individual; |
|
(4) submit a completed branch application through the |
|
Nationwide Mortgage Licensing System and Registry for each branch |
|
office that engages in residential mortgage loan activity on |
|
residential real estate located in this state; [and] |
|
(5) not be in violation of this chapter, a rule adopted |
|
under this chapter, or any order previously issued by the |
|
commissioner to the applicant; and |
|
(6) maintain a physical office in this state. |
|
SECTION 16. The heading to Section 156.2043, Finance Code, |
|
is amended to read as follows: |
|
Sec. 156.2043. QUALIFICATIONS AND REQUIREMENTS FOR LICENSE |
|
[LICENSES]: AUXILIARY MORTGAGE LOAN ACTIVITY COMPANY [AND
|
|
RESIDENTIAL MORTGAGE LOAN ORIGINATORS]. |
|
SECTION 17. Section 156.2043(a), Finance Code, is amended |
|
to read as follows: |
|
(a) To be issued an auxiliary mortgage loan activity company |
|
license, an applicant must: |
|
(1) submit a completed application together with the |
|
payment of applicable fees through the Nationwide Mortgage |
|
Licensing System and Registry; |
|
(2) designate control persons for the company through |
|
the Nationwide Mortgage Licensing System and Registry; |
|
(3) designate an individual licensed as a residential |
|
mortgage loan originator under Chapter 157 [this chapter] as the |
|
company's qualifying individual; and |
|
(4) not be in violation of this chapter, a rule adopted |
|
under this chapter, or any order previously issued by the |
|
commissioner to the applicant. |
|
SECTION 18. The heading to Section 156.2044, Finance Code, |
|
is amended to read as follows: |
|
Sec. 156.2044. QUALIFICATIONS AND REQUIREMENTS FOR LICENSE |
|
[LICENSES]: INDEPENDENT CONTRACTOR LOAN PROCESSOR OR UNDERWRITER |
|
COMPANY [AND INDIVIDUAL LOAN PROCESSORS OR UNDERWRITERS]. |
|
SECTION 19. Sections 156.2044(a) and (b), Finance Code, are |
|
amended to read as follows: |
|
(a) To be issued an independent contractor loan processor or |
|
underwriter company license under this chapter, an applicant must: |
|
(1) submit a completed application together with the |
|
payment of applicable fees through the Nationwide Mortgage |
|
Licensing System and Registry; |
|
(2) designate control persons for the company through |
|
the Nationwide Mortgage Licensing System and Registry; |
|
(3) designate an individual licensed as a residential |
|
mortgage loan originator under Chapter 157 [this chapter] as the |
|
company's qualifying individual; and |
|
(4) not be in violation of this chapter, a rule adopted |
|
under this chapter, or any order previously issued by the |
|
commissioner to the applicant. |
|
(b) An independent contractor loan processor or underwriter |
|
company or a sponsored residential mortgage loan originator is not |
|
authorized to originate residential mortgage loans with a license |
|
issued under Subsection (a). |
|
SECTION 20. The heading to Section 156.2045, Finance Code, |
|
is amended to read as follows: |
|
Sec. 156.2045. QUALIFICATIONS AND REQUIREMENTS FOR |
|
REGISTRATION AND LICENSE: FINANCIAL SERVICES COMPANY [AND
|
|
EXCLUSIVE AGENTS]. |
|
SECTION 21. Section 156.2046, Finance Code, is amended to |
|
read as follows: |
|
Sec. 156.2046. CONVICTION OF OFFENSE. A [For the purposes
|
|
of Section 156.2041, 156.2042, 156.2043, 156.2044, or 156.2045, a] |
|
person is considered to have been convicted of a criminal offense |
|
if: |
|
(1) a sentence is imposed on the person; |
|
(2) the person received probation or community |
|
supervision, including deferred adjudication or community service; |
|
or |
|
(3) the court deferred final disposition of the |
|
person's case. |
|
SECTION 22. Section 156.206(b), Finance Code, is amended to |
|
read as follows: |
|
(b) The commissioner shall conduct criminal background and |
|
credit history checks on a person required to be licensed under this |
|
chapter [in accordance with Section 180.054, and, in connection
|
|
with each application for a residential mortgage loan originator
|
|
license or other individual license, the commissioner may conduct a
|
|
criminal background check through the Department of Public Safety]. |
|
SECTION 23. The heading to Section 156.207, Finance Code, |
|
is amended to read as follows: |
|
Sec. 156.207. ISSUANCE OF LICENSE[; PROVISIONAL LICENSE]. |
|
SECTION 24. Section 156.208(a-1), Finance Code, is amended |
|
to read as follows: |
|
(a-1) A residential mortgage loan company license issued |
|
under this chapter is valid through December 31 of the year of |
|
issuance and may be renewed on or before its expiration date if the |
|
residential mortgage loan company: |
|
(1) pays to the commissioner a renewal fee in an amount |
|
determined by the commissioner not to exceed $375; [and] |
|
(2) has not shown a pattern or practice of abusive |
|
mortgage activity and has no civil judgments or liens that, in the |
|
commissioner's opinion, directly impact the ability of the |
|
residential mortgage loan company to conduct business while |
|
safeguarding and protecting the public interest; and |
|
(3) continues to meet the minimum requirements for |
|
license issuance. |
|
SECTION 25. Section 156.209(g), Finance Code, is amended to |
|
read as follows: |
|
(g) A person whose application for or request to renew a |
|
license has been denied is not eligible to be licensed for a period |
|
of two years after the date the denial becomes final, or a shorter |
|
period as determined by the commissioner after evaluating the |
|
specific circumstances of the denial [person's subsequent
|
|
application]. The finance commission may adopt rules to provide |
|
conditions for which the commissioner may shorten the period of |
|
ineligibility [time of disqualification]. |
|
SECTION 26. Sections 156.211(b) and (b-1), Finance Code, |
|
are amended to read as follows: |
|
(b) When the sponsorship of a residential mortgage loan |
|
originator is terminated, the residential mortgage loan originator |
|
or [and] the residential mortgage loan company shall immediately |
|
notify the commissioner. [The residential mortgage loan
|
|
originator's license then becomes inactive.
The residential
|
|
mortgage loan originator license may be activated if, before the
|
|
license expires, a residential mortgage loan company files a
|
|
request, accompanied by a $25 fee, notifying the commissioner that
|
|
the residential mortgage loan company will sponsor the residential
|
|
mortgage loan originator and will assume responsibility for the
|
|
actions of the residential mortgage loan originator.] |
|
(b-1) Not later than the 10th day before a residential |
|
mortgage loan company begins doing business under an assumed name, |
|
the residential mortgage loan company shall file with the |
|
commissioner a copy of an assumed name certificate for each assumed |
|
name under which the residential mortgage loan company intends to |
|
conduct business and pay a $25 registration fee for each assumed |
|
name. [A residential mortgage loan originator may not conduct
|
|
business under any assumed name that is not the registered assumed
|
|
name of the sponsoring residential mortgage loan company.] |
|
SECTION 27. Section 156.213(a), Finance Code, is amended to |
|
read as follows: |
|
(a) Each licensed residential mortgage loan company [or
|
|
licensed residential mortgage loan originator, as required by the
|
|
commissioner,] shall file a mortgage call report with the |
|
commissioner or the commissioner's authorized designee on a form |
|
prescribed by the commissioner or authorized designee. The |
|
report: |
|
(1) is a statement of condition of the residential |
|
mortgage loan company and the company's operations[, or a statement
|
|
of condition of the residential mortgage loan originators sponsored
|
|
by the company, as applicable], including financial statements and |
|
production activity volumes; |
|
(2) must include any other information required by the |
|
commissioner; and |
|
(3) must be filed as frequently as required by the |
|
commissioner. |
|
SECTION 28. Section 156.214(b), Finance Code, is amended to |
|
read as follows: |
|
(b) To be eligible to register as a registered financial |
|
services company, a person must: |
|
(1) be a depository institution exempt from this |
|
chapter under Section 156.202(a-1)(4)(A) [156.202(a-1)(8)(A)] and |
|
chartered and regulated by the Office of Thrift Supervision or the |
|
Office of the Comptroller of the Currency, or be a subsidiary of the |
|
institution; |
|
(2) provide the commissioner with satisfactory |
|
evidence of an undertaking of accountability in a form acceptable |
|
to the commissioner, supported by a surety bond equal to $1 million |
|
to cover the person's responsibility for residential mortgage loan |
|
company activities of each exclusive agent; |
|
(3) provide a business plan satisfactory to the |
|
commissioner that sets forth the person's plan to provide education |
|
to its exclusive agents, handle consumer complaints relating to its |
|
exclusive agents, and supervise the residential mortgage loan |
|
origination activities of its exclusive agents; |
|
(4) pay an annual registration fee in an amount |
|
determined as follows: |
|
(A) if the registered financial services company |
|
has 2,000 or fewer exclusive agents acting in this state, an amount |
|
equal to the lesser of: |
|
(i) one-half of the license fee for a |
|
residential mortgage loan originator under Section 157.013(b)(1) |
|
[156.203(c)(1)], multiplied by the number of exclusive agents under |
|
contract to act for the person in this state; or |
|
(ii) $200,000; |
|
(B) if the registered financial services company |
|
has at least 2,001 but not more than 2,500 exclusive agents acting |
|
in this state, $225,000; |
|
(C) if the registered financial services company |
|
has at least 2,501 but not more than 3,000 exclusive agents acting |
|
in this state, $250,000; |
|
(D) if the registered financial services company |
|
has at least 3,001 but not more than 5,000 exclusive agents acting |
|
in this state, $300,000; or |
|
(E) if the registered financial services company |
|
has at least 5,001 exclusive agents acting in this state, $350,000; |
|
and |
|
(5) designate an officer of the person to be |
|
responsible for the activities of the exclusive agents. |
|
SECTION 29. Section 156.301(h), Finance Code, is amended to |
|
read as follows: |
|
(h) The commissioner may require reimbursement of expenses |
|
[in an amount not to exceed $325] for each examiner [a day] for |
|
on-site examination or investigation of a licensed residential |
|
mortgage loan company if records are located out of state or if the |
|
review is considered necessary beyond the routine examination |
|
process. |
|
SECTION 30. Sections 156.303(a), (a-1), (g), and (i), |
|
Finance Code, are amended to read as follows: |
|
(a) The commissioner may order disciplinary action against |
|
a licensed or registered residential mortgage loan company [or a
|
|
licensed residential mortgage loan originator] when the |
|
commissioner, after notice and opportunity for hearing, has |
|
determined that the company [person]: |
|
(1) obtained a license or registration, including a |
|
renewal of a license or registration, under this chapter through a |
|
false or fraudulent representation or made a material |
|
misrepresentation in an application for a license or registration |
|
or for the renewal of a license or registration under this chapter; |
|
(2) published or caused to be published an |
|
advertisement related to the business of a residential mortgage |
|
loan company [or residential mortgage loan originator] that: |
|
(A) is misleading; |
|
(B) is likely to deceive the public; |
|
(C) in any manner tends to create a misleading |
|
impression; |
|
(D) fails to identify as a residential mortgage |
|
loan company [or residential mortgage loan originator] the person |
|
causing the advertisement to be published; or |
|
(E) violates federal or state law; |
|
(3) while performing an act for which a license or |
|
registration under this chapter is required, engaged in conduct |
|
that constitutes improper, fraudulent, or dishonest dealings; |
|
(4) entered a plea of guilty or nolo contendere to, or |
|
is convicted of, a criminal offense that is a felony or that |
|
involves fraud or moral turpitude in a court of this or another |
|
state or in a federal court; |
|
(5) failed to use a fee collected in advance of closing |
|
of a residential mortgage loan for a purpose for which the fee was |
|
paid; |
|
(6) charged or received, directly or indirectly, a fee |
|
for assisting a mortgage applicant in obtaining a residential |
|
mortgage loan before all of the services that the person agreed to |
|
perform for the mortgage applicant are completed, and the proceeds |
|
of the residential mortgage loan have been disbursed to or on behalf |
|
of the mortgage applicant[, except as provided by Section 156.304]; |
|
(7) failed within a reasonable time to honor a check |
|
issued to the commissioner after the commissioner has mailed a |
|
request for payment of the check and any applicable fees by |
|
certified mail to the person's last known business address as |
|
reflected by the commissioner's records; |
|
(8) paid compensation to a person who is not licensed, |
|
registered, or exempt under this chapter or Chapter 157 for acts for |
|
which a license or registration under this chapter or Chapter 157 is |
|
required; |
|
(9) induced or attempted to induce a party to a |
|
contract to breach the contract so the person may make a residential |
|
mortgage loan; |
|
(10) published or circulated an unjustified or |
|
unwarranted threat of legal proceedings in matters related to the |
|
person's actions or services as a residential mortgage loan company |
|
[or residential mortgage loan originator, as applicable]; |
|
(11) established an association, by employment or |
|
otherwise, with a person not licensed, registered, or exempt under |
|
this chapter or Chapter 157 who was expected or required to act as a |
|
residential mortgage loan company or residential mortgage loan |
|
originator; |
|
(12) aided, abetted, or conspired with a person to |
|
circumvent the requirements of this chapter or Subchapter C, |
|
Chapter 157; |
|
(13) acted in the dual capacity of a residential |
|
mortgage loan company [or residential mortgage loan originator] and |
|
real estate broker, salesperson, or attorney in a transaction |
|
without the knowledge and written consent of the mortgage applicant |
|
or in violation of applicable requirements under federal law; |
|
(14) discriminated against a prospective borrower on |
|
the basis of race, color, religion, sex, national origin, ancestry, |
|
familial status, or a disability; |
|
(15) failed or refused on demand to: |
|
(A) produce a document, book, or record |
|
concerning a residential mortgage loan transaction conducted by a |
|
[the] residential mortgage loan originator for inspection by the |
|
commissioner or the commissioner's authorized personnel or |
|
representative; |
|
(B) give the commissioner or the commissioner's |
|
authorized personnel or representative free access to the books or |
|
records relating to the person's business kept by an officer, |
|
agent, or employee of the person or any business entity through |
|
which the person conducts residential mortgage loan origination |
|
activities, including a subsidiary or holding company affiliate; or |
|
(C) provide information requested by the |
|
commissioner as a result of a formal or informal complaint made to |
|
the commissioner; |
|
(16) failed without just cause to surrender, on |
|
demand, a copy of a document or other instrument coming into the |
|
person's possession that was provided to the person by another |
|
person making the demand or that the person making the demand is |
|
under law entitled to receive; |
|
(17) disregarded or violated this chapter, a rule |
|
adopted by the finance commission under this chapter, or an order |
|
issued by the commissioner under this chapter; or |
|
(18) provided false information to the commissioner |
|
during the course of an investigation or inspection. |
|
(a-1) The commissioner may also order disciplinary action |
|
after notice and opportunity for hearing against a licensed or |
|
registered residential mortgage loan company [or a licensed
|
|
residential mortgage loan originator] if the commissioner becomes |
|
aware during the term of the license of any fact that would have |
|
been grounds for denial of an original license if the fact had been |
|
known by the commissioner on the date the license was issued. |
|
(g) If a person fails to pay an administrative penalty that |
|
has become final or fails to comply with an order of the |
|
commissioner that has become final, in addition to any other remedy |
|
provided under law the commissioner, on not less than 10 days' |
|
notice to the person, may without a prior hearing suspend the |
|
person's residential mortgage loan company license or registration |
|
[or residential mortgage loan originator license]. The suspension |
|
shall continue until the person has complied with the order or paid |
|
the administrative penalty. [During the period of suspension, the
|
|
person may not originate a residential mortgage loan and all
|
|
compensation received by the person during the period of suspension
|
|
is subject to forfeiture as provided by Section 156.406(b).] |
|
(i) An order revoking the license or registration of a |
|
residential mortgage loan company [or the license of a residential
|
|
mortgage loan originator] may provide that the person is |
|
prohibited, without obtaining prior written consent of the |
|
commissioner, from: |
|
(1) engaging in the business of originating or making |
|
residential mortgage loans; or |
|
(2) [being an employee, officer, director, manager,
|
|
shareholder, member, agent, contractor, or processor of a
|
|
residential mortgage loan company or residential mortgage loan
|
|
originator; or
|
|
[(3)] otherwise affiliating with a person for the |
|
purpose of engaging in the business of originating or making |
|
residential mortgage loans. |
|
SECTION 31. Section 156.305, Finance Code, is amended to |
|
read as follows: |
|
Sec. 156.305. RESTITUTION. The commissioner may order a |
|
person to make restitution for any amount received by that person in |
|
violation of this chapter. A residential mortgage loan company may |
|
be required to make restitution for any amount received by a |
|
sponsored residential mortgage loan originator in violation of |
|
Chapter 157 [this chapter]. |
|
SECTION 32. Section 156.401(d), Finance Code, is amended to |
|
read as follows: |
|
(d) A person [An individual] aggrieved by a ruling, order, |
|
or decision of the commissioner has the right to appeal to a |
|
district court in the county in which the hearing was held. An |
|
appeal under this subsection is governed by Chapter 2001, |
|
Government Code. |
|
SECTION 33. The heading to Subchapter F, Chapter 156, |
|
Finance Code, is amended to read as follows: |
|
SUBCHAPTER F. [MORTGAGE BROKER] RECOVERY FUND |
|
SECTION 34. Section 156.501(b), Finance Code, is amended to |
|
read as follows: |
|
(b) Subject to this subsection, the recovery fund shall be |
|
used to reimburse residential mortgage loan applicants for actual |
|
damages incurred because of acts committed by a residential |
|
mortgage loan originator who was licensed [under this chapter or] |
|
under Chapter 157 when the act was committed. The use of the fund |
|
is limited to reimbursement for out-of-pocket losses caused by an |
|
act by[:
|
|
[(1)
a residential mortgage loan originator licensed
|
|
under this chapter that constitutes a violation of Section
|
|
156.303(a)(2), (3), (5), (6), (8), (9), (10), (11), (12), (13), or
|
|
(16) or 156.304; or
|
|
[(2)] a residential mortgage loan originator licensed |
|
under Chapter 157 that constitutes a violation of Section |
|
157.024(a)(2), (3), (5), (7), (8), (9), (10), (13), [or] (16), |
|
(17), or (18) or 157.02014(b). |
|
SECTION 35. Section 156.503(a), Finance Code, is amended to |
|
read as follows: |
|
(a) An application for the recovery of actual damages from |
|
the recovery fund under Section 156.504 may not be filed after the |
|
fourth [second] anniversary of the date of the alleged act or |
|
omission causing the actual damages or the date the act or omission |
|
should reasonably have been discovered. |
|
SECTION 36. Section 156.504(b), Finance Code, is amended to |
|
read as follows: |
|
(b) The residential mortgage loan applicant is required to |
|
show: |
|
(1) that the applicant's claim is based on facts |
|
allowing recovery under Section 156.501; and |
|
(2) that the applicant: |
|
(A) is not a spouse of the licensed residential |
|
mortgage loan originator; |
|
(B) is not a child, parent, grandchild, |
|
grandparent, or sibling, including relationships by adoption, of |
|
the licensed residential mortgage loan originator; |
|
(C) is not a person sharing living quarters with |
|
the licensed residential mortgage loan originator or a current or |
|
former employer, employee, or associate of the licensed residential |
|
mortgage loan originator; |
|
(D) is not a person who has aided, abetted, or |
|
participated other than as a victim with the licensed residential |
|
mortgage loan originator in any activity that is illegal under |
|
[Section 156.303(a)(2), (3), (5), (6), (8), (9), (10), (11), (12),
|
|
(13), or (16), Section 156.304, or] Section 157.024(a)(2), (3), |
|
(5), (7), (8), (9), (10), (13), [or] (16), (17), or (18) or |
|
157.02014(b), or is not the personal representative of a licensed |
|
residential mortgage loan originator; and |
|
(E) is not licensed as a residential mortgage |
|
loan originator under Chapter 157 [this chapter] who is seeking to |
|
recover any compensation in the transaction or transactions for |
|
which the application for payment is made. |
|
SECTION 37. Section 156.505(b), Finance Code, is amended to |
|
read as follows: |
|
(b) A payment from the recovery fund may be made as provided |
|
by Section 156.504 and this section. A payment for claims: |
|
(1) arising out of the same transaction, including |
|
interest, is limited in the aggregate to $25,000, regardless of the |
|
number of claimants; and |
|
(2) against a single person licensed as a residential |
|
mortgage loan originator under [this chapter or] Chapter 157 |
|
arising out of separate transactions, including interest, is |
|
limited in the aggregate to $50,000 until the fund has been |
|
reimbursed for all amounts paid. |
|
SECTION 38. Sections 156.506(a), (c), and (d), Finance |
|
Code, are amended to read as follows: |
|
(a) The commissioner may revoke or suspend a license issued |
|
under this chapter on proof that the commissioner has made a payment |
|
from the recovery fund of any amount toward satisfaction of a claim |
|
against a residential mortgage loan originator under Chapter 157 |
|
[this chapter]. |
|
(c) A person on whose behalf payment was made from the |
|
recovery fund is not eligible to receive a new license or have a |
|
suspension lifted under this chapter or Chapter 157 until the |
|
person has repaid in full, plus interest at the current legal rate, |
|
the amount paid from the fund on the person's behalf and any costs |
|
associated with investigating and processing the claim against the |
|
fund or with collection of reimbursement for payments from the |
|
fund. |
|
(d) This section does not limit the authority of the |
|
commissioner to take disciplinary action against a residential |
|
mortgage loan originator for a violation of Chapter 157 [this
|
|
chapter] or the rules adopted by the finance commission under that |
|
[this] chapter. The repayment in full to the recovery fund of all |
|
obligations of a residential mortgage loan originator does not |
|
nullify or modify the effect of any other disciplinary proceeding |
|
brought under Chapter 157 [this chapter]. |
|
SECTION 39. The heading to Chapter 157, Finance Code, is |
|
amended to read as follows: |
|
CHAPTER 157. REGISTRATION OF MORTGAGE BANKERS AND LICENSING OF |
|
RESIDENTIAL MORTGAGE LOAN ORIGINATORS |
|
SECTION 40. Sections 157.001 and 157.002, Finance Code, are |
|
designated as Subchapter A, Chapter 157, Finance Code, and a |
|
heading is added to that subchapter to read as follows: |
|
SUBCHAPTER A. GENERAL PROVISIONS |
|
SECTION 41. Section 157.002, Finance Code, is amended by |
|
adding Subdivisions (3-a) and (5-a) to read as follows: |
|
(3-a) "Inspection" includes examination. |
|
(5-a) "Residential mortgage loan company" has the |
|
meaning assigned by Section 156.002. |
|
SECTION 42. Sections 157.003, 157.004, 157.005, 157.006, |
|
157.0061, 157.0062, 157.007, 157.008, 157.009, and 157.010, |
|
Finance Code, are designated as Subchapter B, Chapter 157, Finance |
|
Code, and a heading is added to that subchapter to read as follows: |
|
SUBCHAPTER B. REGISTRATION OF MORTGAGE BANKERS |
|
SECTION 43. Section 157.003(b), Finance Code, is amended to |
|
read as follows: |
|
(b) To register under this chapter, a mortgage banker shall: |
|
(1) enroll with the Nationwide Mortgage Licensing |
|
System and Registry; |
|
(2) be in good standing with the secretary of state; |
|
(3) have a valid federal employer identification |
|
number; |
|
(4) meet the qualification requirements for a mortgage |
|
banker; [and] |
|
(5) not be in violation of this chapter, a rule adopted |
|
under this chapter, or any order previously issued by the |
|
commissioner to the applicant; and |
|
(6) provide to the commissioner a list of any offices |
|
that are separate and distinct from the primary office identified |
|
on the mortgage banker registration and that conduct residential |
|
mortgage loan business relating to this state, regardless of |
|
whether the offices are located in this state. |
|
SECTION 44. Section 157.005, Finance Code, is amended to |
|
read as follows: |
|
Sec. 157.005. UPDATE OF REGISTRATION. A mortgage banker |
|
shall update information contained in the registration not later |
|
than the 10th [30th] day after the date the information changes. |
|
SECTION 45. Section 157.009, Finance Code, is amended by |
|
adding Subsection (d-1) and amending Subsection (e) to read as |
|
follows: |
|
(d-1) The commissioner, after review of the circumstances, |
|
may revoke the registration of a mortgage banker if the mortgage |
|
banker has had a license, registration, or other certification |
|
revoked in another state by a state or federal regulatory |
|
authority. |
|
(e) If the commissioner proposes to revoke a registration |
|
under Subsection (c), [or] (d), or (d-1), the mortgage banker is |
|
entitled to a hearing before the commissioner or a hearings |
|
officer, who shall propose a decision to the commissioner. The |
|
commissioner or hearings officer shall prescribe the time and place |
|
of the hearing. The hearing is governed by Chapter 2001, Government |
|
Code. |
|
SECTION 46. Section 157.011, Finance Code, is transferred |
|
to Subchapter A, Chapter 157, Finance Code, as added by this Act, |
|
and redesignated as Section 157.0021, Finance Code, to read as |
|
follows: |
|
Sec. 157.0021 [157.011]. RULEMAKING AUTHORITY. (a) The |
|
Finance Commission of Texas may adopt rules necessary to implement |
|
or fulfill the purpose of this chapter. |
|
(b) The Finance Commission of Texas may by rule adopt |
|
standard forms for, and require the use of the forms by, a mortgage |
|
banker who represents that an applicant for a loan is preapproved or |
|
has prequalified for the loan. |
|
(c) The finance commission may adopt rules under this |
|
chapter as required to carry out the intentions of the federal |
|
Secure and Fair Enforcement for Mortgage Licensing Act of 2008 |
|
(Pub. L. No. 110-289). |
|
SECTION 47. Sections 157.012, 157.013, 157.014, 157.015, |
|
157.016, 157.017, 157.019, 157.020, and 157.0201, Finance Code, are |
|
designated as Subchapter C, Chapter 157, Finance Code, and a |
|
heading is added to that subchapter to read as follows: |
|
SUBCHAPTER C. LICENSING OF RESIDENTIAL MORTGAGE LOAN ORIGINATORS; |
|
DISCLOSURES AND REQUIREMENTS |
|
SECTION 48. The heading to Section 157.012, Finance Code, |
|
is amended to read as follows: |
|
Sec. 157.012. LICENSE REQUIRED FOR RESIDENTIAL MORTGAGE |
|
LOAN ORIGINATORS [CERTAIN EMPLOYEES OF MORTGAGE BANKERS]. |
|
SECTION 49. Section 157.012, Finance Code, is amended by |
|
amending Subsections (a) and (c) and adding Subsections (a-1), |
|
(a-2), (e), and (f) to read as follows: |
|
(a) Except as provided by Subsection (a-1), an individual |
|
[An employee of a mortgage banker] may not act in the capacity of a |
|
residential mortgage loan originator unless the individual is |
|
exempt under Section 157.0121 or [employee]: |
|
(1) is licensed under this chapter, sponsored by an |
|
appropriate company [a registered mortgage banker], and enrolled |
|
with the Nationwide Mortgage Licensing System and Registry as |
|
required by Section 180.052; and |
|
(2) complies with other applicable requirements of |
|
Chapter 180 and rules adopted by the finance commission under that |
|
chapter. |
|
(a-1) Unless exempt under Section 180.003(b), an exclusive |
|
agent of a registered financial services company may not act or |
|
attempt to act as a residential mortgage loan originator unless the |
|
exclusive agent at the time is licensed under this chapter and |
|
sponsored by an appropriate company. |
|
(a-2) A residential mortgage loan originator must be |
|
sponsored by at least one mortgage banker or residential mortgage |
|
loan company. |
|
(c) To be eligible to be licensed as a residential mortgage |
|
loan originator, the individual [an employee of a mortgage banker], |
|
in addition to meeting the requirements of Subsection (a), must: |
|
(1) satisfy the commissioner as to the individual's |
|
[employee's] good moral character, including the individual's |
|
[employee's] honesty, trustworthiness, and integrity; |
|
(2) not be in violation of this chapter, Chapter 180, |
|
or any rules adopted under this chapter or Chapter 180; |
|
(3) provide the commissioner with satisfactory |
|
evidence that the individual [employee] meets the qualifications |
|
provided by Chapter 180; and |
|
(4) be a citizen of the United States or a lawfully |
|
admitted alien. |
|
(e) A licensed residential mortgage loan originator who is |
|
no longer acting in that capacity for the originator's sponsoring |
|
banker or company during the licensing period may continue to |
|
originate loans under this chapter without reapplying for a new |
|
license if the originator is sponsored by an appropriate company. |
|
(f) In this section, "appropriate company" means a company: |
|
(1) that is a registered mortgage banker under this |
|
chapter or a licensed or registered residential mortgage loan |
|
company under Chapter 156; and |
|
(2) for which the individual is acting as a |
|
residential mortgage loan originator. |
|
SECTION 50. Subchapter C, Chapter 157, Finance Code, as |
|
added by this Act, is amended by adding Section 157.0121 to read as |
|
follows: |
|
Sec. 157.0121. EXEMPTIONS FROM RESIDENTIAL MORTGAGE LOAN |
|
ORIGINATOR REQUIREMENTS. (a) In this section, "depository |
|
institution," "dwelling," "federal banking agency," and "immediate |
|
family member" have the meanings assigned by Section 180.002. |
|
(b) The following individuals are exempt from this chapter: |
|
(1) a registered mortgage loan originator when acting |
|
for: |
|
(A) a depository institution; |
|
(B) a subsidiary of a depository institution that |
|
is: |
|
(i) owned and controlled by the depository |
|
institution; and |
|
(ii) regulated by a federal banking agency; |
|
or |
|
(C) an institution regulated by the Farm Credit |
|
Administration; |
|
(2) an individual who offers or negotiates the terms |
|
of a residential mortgage loan with or on behalf of an immediate |
|
family member of the individual; |
|
(3) a licensed attorney who negotiates the terms of a |
|
residential mortgage loan on behalf of a client as an ancillary |
|
matter to the attorney's representation of the client, unless the |
|
attorney: |
|
(A) takes a residential mortgage loan |
|
application; and |
|
(B) offers or negotiates the terms of a |
|
residential mortgage loan; |
|
(4) an individual who offers or negotiates terms of a |
|
residential mortgage loan secured by a dwelling that serves as the |
|
individual's residence; |
|
(5) any owner of residential real estate who in any |
|
12-consecutive-month period makes no more than five residential |
|
mortgage loans to purchasers of the property for all or part of the |
|
purchase price of the residential real estate against which the |
|
mortgage is secured; and |
|
(6) an individual who is exempt as provided by Section |
|
180.003(b). |
|
(c) Employees of the following entities, when acting for the |
|
benefit of those entities, are exempt from the licensing and other |
|
requirements of this chapter applicable to residential mortgage |
|
loan originators: |
|
(1) a nonprofit organization providing self-help |
|
housing that originates zero interest residential mortgage loans |
|
for borrowers who have provided part of the labor to construct the |
|
dwelling securing the loan; |
|
(2) any owner of residential real estate who in any |
|
12-consecutive-month period makes no more than five residential |
|
mortgage loans to purchasers of the property for all or part of the |
|
purchase price of the residential real estate against which the |
|
mortgage is secured; and |
|
(3) an entity that is: |
|
(A) a depository institution; |
|
(B) a subsidiary of a depository institution that |
|
is: |
|
(i) owned and controlled by the depository |
|
institution; and |
|
(ii) regulated by a federal banking agency; |
|
or |
|
(C) an institution regulated by the Farm Credit |
|
Administration. |
|
(d) A person is not required to obtain a license under this |
|
chapter to originate a loan subject to Chapter 342 or a loan |
|
governed by Section 50(a)(6), Article XVI, Texas Constitution, if |
|
the person: |
|
(1) is enrolled in the Nationwide Mortgage Licensing |
|
System and Registry; |
|
(2) is licensed under Chapter 342; and |
|
(3) makes consumer loans subject to: |
|
(A) Subchapter G, Chapter 342; and |
|
(B) Subchapter E or F, Chapter 342. |
|
(e) The finance commission may grant an exemption from the |
|
residential mortgage loan originator licensing requirements of |
|
this chapter to a municipality, county, community development |
|
corporation, or public or private grant administrator to the extent |
|
the entity is administering the Texas HOME Investment Partnerships |
|
program if the commission determines that granting the exemption is |
|
not inconsistent with the intentions of the federal Secure and Fair |
|
Enforcement for Mortgage Licensing Act of 2008 (Pub. L. No. |
|
110-289). |
|
SECTION 51. Section 157.013, Finance Code, is amended by |
|
amending Subsection (b) and adding Subsection (d) to read as |
|
follows: |
|
(b) An application for a residential mortgage loan |
|
originator license must be accompanied by: |
|
(1) an application fee in an amount determined by the |
|
commissioner, not to exceed $500; [,] and |
|
(2) [by] a recovery fund fee in an amount determined by |
|
the commissioner, not to exceed $20. |
|
(d) In addition to the disciplinary action by the |
|
commissioner authorized under Section 157.024(a)(6), the |
|
commissioner may collect a fee in an amount not to exceed $50 for |
|
any returned check or credit card charge back. |
|
SECTION 52. Subchapter C, Chapter 157, Finance Code, as |
|
added by this Act, is amended by adding Sections 157.0131, |
|
157.0132, and 157.0133 to read as follows: |
|
Sec. 157.0131. FINANCIAL REQUIREMENTS. (a) In this |
|
section, "financial services company" has the meaning assigned by |
|
Section 156.002. |
|
(b) Except as provided by Subsection (c), financial |
|
requirements for holding a residential mortgage loan originator |
|
license shall be met through participation in the recovery fund. |
|
(c) An exclusive agent of a financial services company meets |
|
the agent's financial requirements for holding a residential |
|
mortgage loan originator license by obtaining surety bond coverage |
|
in an amount equal to $1 million. |
|
|
Sec. 157.0132. CONVICTION OF OFFENSE. A person is |
|
considered to have been convicted of a criminal offense if: |
|
(1) a sentence is imposed on the person; |
|
(2) the person received probation or community |
|
supervision, including deferred adjudication or community service; |
|
or |
|
(3) the court deferred final disposition of the |
|
person's case. |
|
Sec. 157.0133. CRIMINAL AND OTHER BACKGROUND CHECKS. |
|
(a) On receipt of an application for a residential mortgage loan |
|
originator license, the commissioner shall, at a minimum, conduct a |
|
criminal background and credit history check of the applicant. |
|
(b) The commissioner shall conduct criminal background and |
|
credit history checks in accordance with Section 180.054, and, in |
|
connection with each application for a residential mortgage loan |
|
originator license or other individual license, the commissioner |
|
may conduct a criminal background check through the Department of |
|
Public Safety. |
|
(c) The commissioner shall keep confidential any background |
|
information obtained under this section and may not release or |
|
disclose the information unless: |
|
(1) the information is a public record at the time the |
|
commissioner obtains the information; or |
|
(2) the commissioner releases the information: |
|
(A) under order from a court; |
|
(B) with the permission of the applicant; |
|
(C) to a person through whom the applicant is |
|
conducting or will conduct business; or |
|
(D) to a governmental agency. |
|
(d) Notwithstanding Subsection (c), criminal history record |
|
information obtained from the Federal Bureau of Investigation may |
|
be released or disclosed only to a governmental entity or as |
|
authorized by federal statute, federal rule, or federal executive |
|
order. |
|
SECTION 53. Subchapter C, Chapter 157, Finance Code, as |
|
added by this Act, is amended by adding Section 157.0141 to read as |
|
follows: |
|
Sec. 157.0141. CONDITIONAL LICENSE. The commissioner may |
|
issue a conditional license. The finance commission by rule shall |
|
adopt reasonable terms and conditions for a conditional license. |
|
SECTION 54. Section 157.015, Finance Code, is amended by |
|
amending Subsections (a), (b), (c), and (d) and adding Subsections |
|
(d-1) and (h) to read as follows: |
|
(a) Except as provided by Subsection (b), a residential |
|
mortgage loan originator license issued under this chapter is valid |
|
through December 31 of the year of issuance and may be renewed on or |
|
before its expiration date if the residential mortgage loan |
|
originator: |
|
(1) pays to the commissioner a renewal fee in an amount |
|
determined by the commissioner not to exceed $500 and a recovery |
|
fund fee as provided by Section 156.502; |
|
(2) continues to meet the minimum requirements for |
|
license issuance; and |
|
(3) provides the commissioner with satisfactory |
|
evidence that the residential mortgage loan originator has |
|
attended, during the term of the current license, continuing |
|
education courses in accordance with the applicable requirements of |
|
Chapter 180. [A residential mortgage loan originator license issued
|
|
under this chapter is valid for one year and may be renewed on or
|
|
before its expiration date.] |
|
(b) A license issued under this chapter to a registered |
|
financial services company's exclusive agent is valid through |
|
December 31 of the year of issuance and may be renewed on or before |
|
the expiration date if the exclusive agent complies with the |
|
requirements of Subsections (a)(2) and (3). In this subsection, |
|
registered financial services company has the meaning assigned by |
|
Section 156.002. [Each residential mortgage loan originator
|
|
license will be renewed for not more than a one-year period expiring
|
|
December 31 of each calendar year.] |
|
(c) An application for renewal of a residential mortgage |
|
loan originator license shall meet the requirements of Section |
|
157.013(a) [157.013]. |
|
(d) On receipt of a request for a renewal of a license issued |
|
under this subchapter, the commissioner may conduct a criminal |
|
background check under Section 157.0133. [An application for
|
|
renewal of a residential mortgage loan originator license must meet
|
|
all of the standards and qualifications for license renewal under
|
|
Chapter 180.] |
|
(d-1) A renewal fee is not refundable and may not be |
|
credited or applied to any other fee or indebtedness owed by the |
|
person paying the fee. |
|
(h) In addition to the disciplinary action by the |
|
commissioner authorized under Section 157.024(a)(6), the |
|
commissioner may collect a fee in an amount not to exceed $50 for |
|
any returned check or credit card charge back. |
|
SECTION 55. Section 157.017(g), Finance Code, is amended to |
|
read as follows: |
|
(g) A person whose application for or request to renew a |
|
license has been denied is not eligible to be licensed for a period |
|
of two years after the date the denial becomes final, or a shorter |
|
period as determined by the commissioner after evaluating the |
|
specific circumstances of the denial [person's subsequent
|
|
application]. The finance commission may adopt rules to provide |
|
conditions for which the commissioner may shorten the period of |
|
ineligibility [time for eligibility for a new license]. |
|
SECTION 56. The heading to Section 157.019, Finance Code, |
|
is amended to read as follows: |
|
Sec. 157.019. MODIFICATION OF LICENSE; CHANGE OF |
|
SPONSORSHIP. |
|
SECTION 57. Section 157.019, Finance Code, is amended by |
|
amending Subsection (c) and adding Subsections (d) and (e) to read |
|
as follows: |
|
(c) When the sponsorship of a residential mortgage loan |
|
originator is terminated, the residential mortgage loan originator |
|
or the registered mortgage banker or residential mortgage loan |
|
company that had been sponsoring the originator shall immediately |
|
notify the commissioner. The residential mortgage loan |
|
originator's license then becomes inactive. The residential |
|
mortgage loan originator license may be activated if, before the |
|
license expires, a registered mortgage banker or licensed or |
|
registered residential mortgage loan company files a request, |
|
accompanied by a $25 fee, notifying the commissioner that the |
|
banker or company will sponsor the residential mortgage loan |
|
originator and will assume responsibility for the actions of the |
|
residential mortgage loan originator. [A mortgage banker employee
|
|
who is a residential mortgage loan originator shall notify the
|
|
commissioner or authorized designee in writing of a change of
|
|
sponsorship. The notice must be accompanied by a fee of $25.] |
|
(d) A residential mortgage loan originator may not conduct |
|
business under any assumed name that is not the registered assumed |
|
name of a residential mortgage loan company sponsoring the |
|
originator. |
|
(e) A fee under this section is not refundable and may not be |
|
credited or applied to any other fee or indebtedness owed by the |
|
person paying the fee. |
|
SECTION 58. Section 157.020, Finance Code, is amended by |
|
adding Subsection (a-1) to read as follows: |
|
(a-1) Each licensed residential mortgage loan originator, |
|
as required by the commissioner, shall file a mortgage call report |
|
with the commissioner or the commissioner's authorized designee on |
|
a form prescribed by the commissioner or authorized designee. The |
|
report: |
|
(1) is a statement of condition of the residential |
|
mortgage loan originators sponsored by a residential mortgage loan |
|
company, including financial statements and production activity |
|
volumes; |
|
(2) must include any other information required by the |
|
commissioner; and |
|
(3) must be filed as frequently as required by the |
|
commissioner. |
|
SECTION 59. Subchapter C, Chapter 157, Finance Code, as |
|
added by this Act, is amended by adding Sections 157.02012, |
|
157.02013, 157.02014, 157.02015, 157.02016, 157.02017, 157.02018, |
|
and 157.02019 to read as follows: |
|
Sec. 157.02012. DISCLOSURE TO APPLICANT. (a) At the time |
|
an applicant submits an application to a residential mortgage loan |
|
originator, the residential mortgage loan originator shall provide |
|
to the applicant a disclosure that specifies: |
|
(1) the nature of the relationship between the |
|
applicant and the residential mortgage loan originator; |
|
(2) the duties the residential mortgage loan |
|
originator has to the applicant; and |
|
(3) how the residential mortgage loan originator will |
|
be compensated. |
|
(b) The finance commission by rule shall adopt a standard |
|
disclosure form to be used by the residential mortgage loan |
|
originator. |
|
Sec. 157.02013. STANDARD FORMS. (a) The finance |
|
commission by rule shall adopt one or more standard forms for use by |
|
a residential mortgage loan originator in representing that an |
|
applicant for a residential mortgage loan is preapproved or has |
|
prequalified for the loan. |
|
(b) The finance commission shall adopt rules requiring a |
|
residential mortgage loan originator licensed under this chapter to |
|
use the forms adopted by the finance commission under Subsection |
|
(a). |
|
Sec. 157.02014. FEE ASSESSMENT AND DISCLOSURE. (a) Before |
|
the completion of all services to be performed, a residential |
|
mortgage loan originator may charge and receive, unless prohibited |
|
by law, the following fees for services in assisting a mortgage |
|
applicant to obtain a residential mortgage loan: |
|
(1) a fee to obtain a credit report; |
|
(2) a fee for the appraisal of the real estate; |
|
(3) a fee for processing a residential mortgage loan |
|
application; |
|
(4) a fee for taking a residential mortgage loan |
|
application; |
|
(5) a fee for automated underwriting; |
|
(6) a fee for a courier service; |
|
(7) a fee to issue a loan commitment; or |
|
(8) subject to Subsection (b), a fee for locking in an |
|
interest rate. |
|
(b) A residential mortgage loan originator may not charge or |
|
receive a fee for locking in an interest rate unless there is a |
|
written agreement signed by the mortgage applicant and the |
|
residential mortgage loan originator that contains a statement of |
|
whether the fee to lock in the interest rate is refundable and, if |
|
so, the terms and conditions necessary to obtain the refund. |
|
Sec. 157.02015. SECONDARY MARKET TRANSACTIONS. This |
|
chapter does not prohibit a residential mortgage loan originator |
|
from receiving compensation from a party other than the mortgage |
|
applicant for the sale, transfer, assignment, or release of rights |
|
on the closing of a mortgage transaction. |
|
Sec. 157.02016. AFFILIATED BUSINESS ARRANGEMENTS. Unless |
|
prohibited by federal or state law, this chapter may not be |
|
construed to prevent affiliated or controlled business |
|
arrangements or loan origination services by or between residential |
|
mortgage loan originators and other professionals if the |
|
residential mortgage loan originator complies with all applicable |
|
federal and state laws permitting those arrangements or services. |
|
Sec. 157.02017. RULEMAKING AUTHORITY WITH RESPECT TO |
|
RESIDENTIAL MORTGAGE LOAN ORIGINATORS. (a) The finance |
|
commission may adopt rules to prohibit false, misleading, or |
|
deceptive practices by residential mortgage loan originators but |
|
may not adopt any other rules restricting competitive bidding or |
|
advertising by residential mortgage loan originators. When |
|
adopting rules under this subsection, the finance commission may |
|
not restrict: |
|
(1) the use of any medium for an advertisement; |
|
(2) the personal appearance of or voice of a person in |
|
an advertisement; |
|
(3) the size or duration of an advertisement; or |
|
(4) a residential mortgage loan originator's |
|
advertisement under a trade name. |
|
(b) The finance commission may adopt rules regarding books |
|
and records that a residential mortgage loan originator licensed |
|
under this chapter is required to keep, including the location at |
|
which the books and records must be kept. |
|
(c) The finance commission shall consult with the |
|
commissioner when proposing and adopting rules under this section. |
|
Sec. 157.02018. MORTGAGE INDUSTRY ADVISORY COMMITTEE; |
|
RESIDENTIAL MORTGAGE LOAN ORIGINATORS. (a) In addition to other |
|
powers and duties delegated by the commissioner to the mortgage |
|
industry advisory committee created under Section 156.104, the |
|
advisory committee shall advise the commissioner with respect to: |
|
(1) the proposal and adoption of rules relating to: |
|
(A) the licensing of residential mortgage loan |
|
originators; |
|
(B) the education and experience requirements |
|
for licensing residential mortgage loan originators; and |
|
(C) the conduct and ethics of residential |
|
mortgage loan originators; |
|
(2) the form of or format for any applications or other |
|
documents under this subchapter or Subchapter D; and |
|
(3) the interpretation, implementation, and |
|
enforcement of this subchapter or Subchapter D. |
|
(b) The advisory committee shall take a record vote on any |
|
matter described by Subsection (a)(1). The commissioner shall |
|
inform the finance commission of: |
|
(1) the result of the vote; and |
|
(2) any additional information the commissioner |
|
considers necessary to ensure the finance commission is |
|
sufficiently notified of the advisory committee's recommendations. |
|
(c) A record vote taken by the advisory committee under |
|
Subsection (b) is only a recommendation and does not supersede the |
|
rulemaking authority of the finance commission under this |
|
subchapter. |
|
Sec. 157.02019. ADMINISTRATION OF SUBCHAPTER. The |
|
commissioner shall administer and enforce this subchapter. |
|
SECTION 60. Sections 157.021, 157.0211, 157.022, 157.023, |
|
157.024, 157.0241, 157.025, 157.026, 157.027, 157.028, 157.029, |
|
157.030, and 157.031, Finance Code, are designated as Subchapter D, |
|
Chapter 157, Finance Code, and a heading is added to that subchapter |
|
to read as follows: |
|
SUBCHAPTER D. ENFORCEMENT |
|
SECTION 61. Section 157.021, Finance Code, is amended by |
|
amending Subsection (a) and adding Subsection (h) to read as |
|
follows: |
|
(a) The commissioner may conduct an inspection of a person |
|
licensed as a residential mortgage loan originator as the |
|
commissioner determines necessary to determine whether the person |
|
is complying with this chapter, Chapter 180, and applicable rules. |
|
An inspection under this subsection may include inspection of the |
|
books, records, documents, operations, and facilities of the |
|
person. The commissioner may request the assistance and |
|
cooperation of a sponsoring [the] mortgage banker in providing |
|
needed documents and records. The commissioner may not make a |
|
request of a sponsoring [the] mortgage banker for documents and |
|
records unrelated to the person being investigated or |
|
inspected. The commissioner may share evidence of criminal |
|
activity gathered during an inspection or investigation with any |
|
state or federal law enforcement agency. |
|
(h) The commissioner may require reimbursement of expenses |
|
for each examiner for an on-site examination or inspection of a |
|
licensed residential mortgage loan originator if records are |
|
located out of state and are not made available for examination or |
|
inspection by the examiner in this state. |
|
SECTION 62. Section 157.0211, Finance Code, is amended to |
|
read as follows: |
|
Sec. 157.0211. MULTI-STATE EXAMINATION AUTHORITY OF |
|
RESIDENTIAL MORTGAGE LOAN SERVICER. To ensure that mortgage |
|
bankers that act as residential mortgage loan servicers operate in |
|
this state in compliance with this chapter and with other law in |
|
accordance with this chapter, the commissioner or the |
|
commissioner's designee may participate in multi-state mortgage |
|
examinations as scheduled by the Conference of State Bank |
|
Supervisors Multi-State Mortgage Committee or by the Consumer |
|
Financial Protection Bureau in accordance with the [Conference of
|
|
State Bank Supervisors] protocol for such examinations. |
|
SECTION 63. Section 157.024(a), Finance Code, is amended to |
|
read as follows: |
|
(a) The commissioner may order disciplinary action against |
|
a licensed residential mortgage loan originator when the |
|
commissioner, after notice and opportunity for a hearing, has |
|
determined that the person: |
|
(1) obtained a license, including a renewal of a |
|
license, under this chapter through a false or fraudulent |
|
representation or made a material misrepresentation in an |
|
application for a license or for the renewal of a license under this |
|
chapter; |
|
(2) published or caused to be published an |
|
advertisement related to the business of a residential mortgage |
|
loan originator that: |
|
(A) was misleading; |
|
(B) was likely to deceive the public; |
|
(C) in any manner tended to create a misleading |
|
impression; |
|
(D) failed to identify as a licensed residential |
|
mortgage loan originator the person causing the advertisement to be |
|
published; or |
|
(E) violated federal or state law; |
|
(3) while performing an act for which a license under |
|
this chapter is required, engaged in conduct that constitutes |
|
improper, fraudulent, or dishonest dealings; |
|
(4) entered a plea of nolo contendere to or was |
|
convicted of a criminal offense that is a felony or that involves |
|
fraud or moral turpitude in a court of this or another state or in a |
|
federal court; |
|
(5) failed to use a fee collected in advance of closing |
|
a residential mortgage loan for a purpose for which the fee was |
|
paid; |
|
(6) failed within a reasonable time to honor a check |
|
issued to the commissioner after the commissioner mailed a request |
|
for payment by mail to the person's last known business address as |
|
reflected in the commissioner's records; |
|
(7) induced or attempted to induce a party to a |
|
contract to breach the contract so the person could make a |
|
residential mortgage loan; |
|
(8) published or circulated an unjustified or |
|
unwarranted threat of legal proceedings in matters related to the |
|
person's actions or services as a licensed residential mortgage |
|
loan originator; |
|
(9) aided, abetted, or conspired with a person to |
|
circumvent the requirements of this chapter; |
|
(10) acted in the dual capacity of a licensed |
|
residential mortgage loan originator and real estate broker, |
|
salesperson, or attorney in a transaction without the knowledge and |
|
written consent of the mortgage applicant or in violation of |
|
applicable requirements under federal law; |
|
(11) discriminated against a prospective borrower on |
|
the basis of race, color, religion, sex, national origin, ancestry, |
|
familial status, or disability; |
|
(12) failed or refused on demand to: |
|
(A) produce a document, book, or record |
|
concerning a residential mortgage loan transaction conducted by the |
|
licensed residential mortgage loan originator for inspection by the |
|
commissioner or the commissioner's authorized personnel or |
|
representative; |
|
(B) give the commissioner or the commissioner's |
|
authorized personnel or representative free access to the books or |
|
records relating to the residential mortgage loan originator's |
|
business kept by any other person or any business entity through |
|
which the residential mortgage loan originator conducts |
|
residential mortgage loan origination activities; or |
|
(C) provide information requested by the |
|
commissioner as a result of a formal or informal complaint made to |
|
the commissioner; |
|
(13) failed without just cause to surrender, on |
|
demand, a copy of a document or other instrument coming into the |
|
residential mortgage loan originator's possession that was |
|
provided to the residential mortgage loan originator by another |
|
person making the demand or that the person making the demand is |
|
under law entitled to receive; |
|
(14) disregarded or violated this chapter, a rule |
|
adopted under this chapter, or an order issued by the commissioner |
|
under this chapter; |
|
(15) provided false information to the commissioner |
|
during the course of an investigation or inspection; |
|
(16) paid compensation to a person who is not licensed |
|
or exempt under this chapter for acts for which a license under this |
|
chapter is required; [or] |
|
(17) established an association, by employment or |
|
otherwise, with a person not licensed or exempt under this chapter |
|
or Chapter 156 who was expected or required to act as a residential |
|
mortgage loan originator or residential mortgage loan company; or |
|
(18) charged or received, directly or indirectly, a |
|
fee for assisting a mortgage applicant in obtaining a residential |
|
mortgage loan before all of the services that the person agreed to |
|
perform for the mortgage applicant are completed, and the proceeds |
|
of the residential mortgage loan have been disbursed to or on behalf |
|
of the mortgage applicant, except as provided by Section 157.02014. |
|
SECTION 64. Section 157.026, Finance Code, is amended by |
|
adding Subsection (e) to read as follows: |
|
(e) The commissioner may, in the commissioner's discretion, |
|
rescind or vacate any previously issued revocation order. |
|
SECTION 65. Section 157.031, Finance Code, is amended by |
|
amending Subsection (a) and adding Subsection (a-1) to read as |
|
follows: |
|
(a) A person who is not exempt under this chapter and who |
|
acts as a residential mortgage loan originator without first |
|
obtaining a license required under this chapter commits an offense. |
|
[A person commits an offense if the person is an employee of a
|
|
mortgage banker, is not exempt under this chapter, and acts as a
|
|
residential mortgage loan originator without first obtaining a
|
|
license required under this chapter.] An offense under this |
|
subsection is a Class B misdemeanor. A second or subsequent |
|
conviction for an offense under this subsection is a Class A |
|
misdemeanor. |
|
(a-1) A person who received money, or the equivalent of |
|
money, as a fee or profit because of or in consequence of the person |
|
acting as a residential mortgage loan originator without an active |
|
license or being exempt under this chapter is liable for damages in |
|
an amount that is not less than the amount of the fee or profit |
|
received and not to exceed three times the amount of the fee or |
|
profit received, as may be determined by the court. An aggrieved |
|
person may recover damages under this subsection in a court. |
|
SECTION 66. Subchapter D, Chapter 157, Finance Code, as |
|
added by this Act, is amended by adding Section 157.032 to read as |
|
follows: |
|
Sec. 157.032. POWERS OF COMMISSIONER. (a) In addition to |
|
any other action, proceeding, or remedy authorized by law, the |
|
commissioner may institute an action in the commissioner's name to |
|
enjoin a violation of Subchapter C or a rule adopted under |
|
Subchapter C. To sustain an action filed under this subsection, it |
|
is not necessary to allege or prove that an adequate remedy at law |
|
does not exist or that substantial or irreparable damage would |
|
result from a continued violation of Subchapter C. |
|
(b) The commissioner is not required to provide an appeal |
|
bond in any action or proceeding to enforce Subchapter C. |
|
(c) The commissioner may authorize specific employees to |
|
conduct hearings and make recommendations for final decisions in |
|
contested cases. |
|
SECTION 67. Section 158.104, Finance Code, is amended to |
|
read as follows: |
|
Sec. 158.104. MULTI-STATE EXAMINATION AUTHORITY. To |
|
ensure that residential mortgage loan servicers to whom this |
|
chapter applies operate in this state in compliance with this |
|
chapter and with other law in accordance with this chapter, the |
|
commissioner or the commissioner's designee may participate in |
|
multi-state mortgage examinations as scheduled by the Conference of |
|
State Bank Supervisors Multi-State Mortgage Committee or by the |
|
Consumer Financial Protection Bureau in accordance with the |
|
[Conference of State Bank Supervisors] protocol for such |
|
examinations. |
|
SECTION 68. Sections 180.002(17) and (21), Finance Code, |
|
are amended to read as follows: |
|
(17) "Regulatory official" means: |
|
(A) with respect to Subtitles A, F, and G of this |
|
title, the banking commissioner of Texas; |
|
(B) with respect to Chapters 156 and 157 [except
|
|
as provided by Paragraph (D)], the savings and mortgage lending |
|
commissioner; and |
|
(C) with respect to Chapters 342, 347, 348, and |
|
351, the consumer credit commissioner[; and
|
|
[(D)
with respect to credit unions, to the
|
|
examination, investigation, or inspection of employees of credit
|
|
union subsidiary organizations licensed under Chapter 156, and to
|
|
the enforcement of compliance with this chapter and Chapter 156 by
|
|
those employees, the credit union commissioner]. |
|
(21) "Rulemaking authority" means[:
|
|
[(A)] the finance commission[, except as
|
|
provided by Paragraph (B); or
|
|
[(B)
with respect to credit unions and the
|
|
rulemaking authority granted by Section 15.4024, the Credit Union
|
|
Commission]. |
|
SECTION 69. Section 180.056(a), Finance Code, is amended to |
|
read as follows: |
|
(a) An applicant for a residential mortgage loan originator |
|
license must complete education courses that include[, at a
|
|
minimum,] at least the minimum number of hours and type of courses |
|
required by the S.A.F.E. Mortgage Licensing Act and the minimum |
|
number of hours of training related to lending standards for the |
|
nontraditional mortgage product marketplace required by that Act |
|
and any additional requirements established by the regulatory |
|
official. |
|
SECTION 70. Section 180.251(a), Finance Code, is amended to |
|
read as follows: |
|
(a) The [Except as provided by Subsection (b), the] savings |
|
and mortgage lending commissioner shall administer and enforce this |
|
chapter with respect to individuals licensed under Chapter [156 or] |
|
157. |
|
SECTION 71. The following provisions of the Finance Code |
|
are repealed: |
|
(1) Section 15.4024; |
|
(2) Sections 156.003, 156.004, 156.005, 156.105, |
|
156.2015, 156.205, 156.304, and 156.405; |
|
(3) Sections 156.101(a-1) and (a-2); |
|
(4) Sections 156.201(b), (b-1), and (b-2); |
|
(5) Sections 156.202(c), 156.203(c), 156.2041(b), |
|
156.2042(b), 156.2043(b), 156.2044(c), 156.2045(b), 156.207(b), |
|
(c), and (d), 156.2081(c), and 156.406(a) and (b); |
|
(6) Section 157.012(d); and |
|
(7) Section 180.251(b). |
|
SECTION 72. The changes in law made by this Act do not |
|
affect any pending proceeding or action brought under Subchapter D, |
|
Chapter 156, Finance Code, as that subchapter existed immediately |
|
before amendment by this Act, and the former law is continued in |
|
effect for that purpose. |
|
SECTION 73. The changes in law made by this Act apply only |
|
to a license or registration issued or renewed on or after the |
|
effective date of this Act. A license or registration issued or |
|
renewed before the effective date of this Act is governed by the law |
|
in effect on the date the license or registration was issued or |
|
renewed, and the former law is continued in effect for that purpose. |
|
SECTION 74. This Act takes effect September 1, 2013. |