| |
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|
A BILL TO BE ENTITLED
|
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|
AN ACT
|
|
|
relating to the regulation of residential mortgage loan |
|
|
originators, residential mortgage loan companies, mortgage |
|
|
bankers, and residential mortgage loan servicers under the |
|
|
jurisdiction of the Department of Savings and Mortgage Lending; |
|
|
changing a fee. |
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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] |
|
|
SECTION 2. Section 156.001, Finance Code, is amended to |
|
|
read as follows: |
|
|
Sec. 156.001. SHORT TITLE. This chapter may be cited as |
|
|
the Residential Mortgage Loan Company [and Residential Mortgage
|
|
|
Loan Originator] Licensing and Registration Act. |
|
|
SECTION 3. Section 156.002, Finance Code, is amended by |
|
|
adding Subdivision (4-b) and amending Subdivisions (10-b) and (11) |
|
|
to read as follows: |
|
|
(4-b) "Inspection" includes examination. |
|
|
(10-b) "Qualifying individual" means an individual |
|
|
who is: |
|
|
(A) licensed under Chapter 157 [this chapter] as |
|
|
a residential mortgage loan originator; and |
|
|
(B) [is] designated by a residential mortgage |
|
|
loan company as the company's representative [for purposes of the
|
|
|
Nationwide Mortgage Licensing System and Registry]. |
|
|
(11) "Registered financial services company" means a |
|
|
person registered under Section 156.2012 [156.214]. |
|
|
SECTION 4. Section 156.003, Finance Code, is amended to |
|
|
read as follows: |
|
|
Sec. 156.003. SECONDARY MARKET TRANSACTIONS. This chapter |
|
|
does not prohibit a residential mortgage loan originator sponsored |
|
|
by and conducting business for a licensed or registered residential |
|
|
mortgage loan company under this chapter 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. |
|
|
SECTION 5. Subsection (a), Section 156.004, Finance Code, |
|
|
is amended to read as follows: |
|
|
(a) At the time an applicant submits an application to a |
|
|
residential mortgage loan originator sponsored by and conducting |
|
|
business for a licensed or registered residential mortgage loan |
|
|
company under this chapter, 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. |
|
|
SECTION 6. Section 156.005, Finance Code, is amended to |
|
|
read as follows: |
|
|
Sec. 156.005. 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, sponsored by and conducting business for |
|
|
a licensed or registered residential mortgage loan company under |
|
|
this chapter, and other professionals if the residential mortgage |
|
|
loan originator complies with all applicable federal and state laws |
|
|
permitting those arrangements or services. |
|
|
SECTION 7. The heading to Section 156.101, Finance Code, is |
|
|
amended to read as follows: |
|
|
Sec. 156.101. ADMINISTRATION AND ENFORCEMENT OF CHAPTER; |
|
|
PARTICIPATION IN NATIONWIDE REGISTRY. |
|
|
SECTION 8. Subsection (a), Section 156.101, 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: |
|
|
(a) The [Except as provided by Subsection (a-2), the] |
|
|
commissioner shall administer and enforce this chapter. |
|
|
SECTION 9. Subsection (a), Section 156.102, Finance Code, |
|
|
is amended to 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
|
|
|
regulation under Section 156.2015]. |
|
|
SECTION 10. Subsections (f) and (h), Section 156.104, |
|
|
Finance Code, are amended to read as follows: |
|
|
(f) The commissioner may remove a member of the advisory |
|
|
committee if: |
|
|
(1) the member does not maintain [have at the time of
|
|
|
appointment] the qualifications required by Subsection (b); or |
|
|
(2) the commissioner determines that the member cannot |
|
|
discharge the member's duties for a substantial part of the term for |
|
|
which the member is appointed. |
|
|
(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: |
|
|
(1) the proposal and adoption of rules relating to the |
|
|
mortgage industry[:
|
|
|
[(A)
the licensing of residential mortgage loan
|
|
|
originators or residential mortgage loan companies;
|
|
|
[(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 chapter or Chapter 157; and |
|
|
(3) the interpretation, implementation, and |
|
|
enforcement of this chapter and Chapter 157. |
|
|
SECTION 11. Section 156.105, Finance Code, is amended to |
|
|
read as follows: |
|
|
Sec. 156.105. STANDARD FORMS. (a) The finance |
|
|
commission[,] by rule[,] shall adopt one or more standard forms for |
|
|
use by a residential mortgage loan originator sponsored by and |
|
|
conducting business for a licensed or registered residential |
|
|
mortgage loan company under this chapter 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 Chapter 157 |
|
|
[this chapter] to use the forms adopted by the finance commission |
|
|
under Subsection (a). |
|
|
SECTION 12. The heading to Subchapter C, Chapter 156, |
|
|
Finance Code, is amended to read as follows: |
|
|
SUBCHAPTER C. RESIDENTIAL MORTGAGE LOAN COMPANY [AND RESIDENTIAL
|
|
|
MORTGAGE LOAN ORIGINATOR] LICENSES AND REGISTRATION |
|
|
SECTION 13. Subsections (a) and (c), Section 156.201, |
|
|
Finance Code, are amended to read as follows: |
|
|
(a) A person may not act in the capacity of, engage in the |
|
|
business of, or advertise or hold that person out as engaging in or |
|
|
conducting the business of a residential mortgage loan company in |
|
|
this state unless the person holds an active residential mortgage |
|
|
loan company license, is registered under Section 156.2012 |
|
|
[156.214], or is exempt under Section 156.202. |
|
|
(c) Each residential mortgage loan company and the |
|
|
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: |
|
|
(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 14. Subsections (a) and (a-1), Section 156.202, |
|
|
Finance Code, are amended to read as follows: |
|
|
(a) In this section, "depository institution," "dwelling," |
|
|
and "federal banking agency[,]" [and "immediate family member"] |
|
|
have the meanings assigned by Section 180.002. |
|
|
(a-1) The following [individuals or] entities[, and
|
|
|
employees of those entities when acting for the benefit of those
|
|
|
entities,] 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)] 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) [(6)] a mortgage banker registered under Chapter |
|
|
157; |
|
|
(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
|
|
|
[(9)
an individual who is exempt as provided by
|
|
|
Section 180.003(b)]. |
|
|
SECTION 15. The heading to Section 156.203, Finance Code, |
|
|
is amended to read as follows: |
|
|
Sec. 156.203. APPLICATION [FOR A LICENSE]; FEES. |
|
|
SECTION 16. Subsections (a-1) and (a-2), Section 156.203, |
|
|
Finance Code, are 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. |
|
|
(a-2) An application for a financial services company |
|
|
registration under Section 156.2012 [156.214] must be: |
|
|
(1) in writing; |
|
|
(2) under oath; and |
|
|
(3) on the form prescribed by the commissioner. |
|
|
SECTION 17. The heading to Section 156.2041, Finance Code, |
|
|
is amended to read as follows: |
|
|
Sec. 156.2041. QUALIFICATIONS AND REQUIREMENTS FOR LICENSE |
|
|
[LICENSES]: MORTGAGE COMPANY [AND RESIDENTIAL MORTGAGE LOAN
|
|
|
ORIGINATORS]. |
|
|
SECTION 18. Subsection (a), Section 156.2041, 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 19. 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 20. Subsection (a), Section 156.2042, 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 21. 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 22. Subsection (a), Section 156.2043, 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 23. 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 24. Subsections (a) and (b), Section 156.2044, |
|
|
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 25. 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 26. Subsections (b) and (c), Section 156.206, |
|
|
Finance Code, are 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]. |
|
|
(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; or |
|
|
(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. |
|
|
SECTION 27. The heading to Section 156.207, Finance Code, |
|
|
is amended to read as follows: |
|
|
Sec. 156.207. ISSUANCE OF LICENSE[; PROVISIONAL LICENSE]. |
|
|
SECTION 28. Subsections (a-1) and (c), Section 156.208, |
|
|
Finance Code, are 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. |
|
|
(c) An application for renewal shall be in the [The
|
|
|
commissioner may require residential mortgage loan originators to
|
|
|
submit requests for renewal on a] form prescribed by the |
|
|
commissioner. |
|
|
SECTION 29. Subsection (g), Section 156.209, 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 30. Subsections (b) and (b-1), Section 156.211, |
|
|
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 31. Subsection (a), Section 156.213, 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 32. Section 156.214, Finance Code, is redesignated |
|
|
as Section 156.2012, Finance Code, and amended to read as follows: |
|
|
Sec. 156.2012 [156.214]. REGISTERED FINANCIAL SERVICES |
|
|
COMPANY. (a) A [registered] financial services company may |
|
|
perform the services of a [another] residential mortgage loan |
|
|
company [as] if the company is registered [were licensed as a
|
|
|
residential mortgage loan company] under this chapter[, through
|
|
|
individuals who are the exclusive agents of the registered
|
|
|
financial services company]. |
|
|
(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: |
|
|
(A) provide education to its sponsored |
|
|
residential mortgage loan originators; |
|
|
(B) [exclusive agents,] handle consumer |
|
|
complaints relating to its sponsored residential mortgage loan |
|
|
originators; and |
|
|
(C) [exclusive agents, and] supervise the |
|
|
residential mortgage loan origination activities of its sponsored |
|
|
residential mortgage loan originators [exclusive agents]; |
|
|
(3) [(4)] pay a [an annual] registration fee in an |
|
|
amount not to exceed $500 [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 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]; |
|
|
(4) [and
|
|
|
[(5)] designate an officer of the person to be |
|
|
responsible for the activities of its sponsored residential |
|
|
mortgage loan originators; |
|
|
(5) submit a completed application through the |
|
|
Nationwide Mortgage Licensing System and Registry together with the |
|
|
applicable fee required by Subdivision (3) or Subsection (c); |
|
|
(6) obtain preapproval from the commissioner that the |
|
|
person meets the eligibility requirements for registration as a |
|
|
financial services company; and |
|
|
(7) not be in violation of this chapter, a rule adopted |
|
|
under this chapter, or any order previously issued by the |
|
|
commissioner to the applicant [the exclusive agents]. |
|
|
(c) If the commissioner determines that a person has met the |
|
|
requirements of Subsection (b) [and Section 156.2045(a)], the |
|
|
commissioner shall issue a registration to the person. The |
|
|
registration is valid for one year, expires on December 31 of each |
|
|
year, and must be renewed annually by meeting the requirements |
|
|
under Subsection (b) and paying a renewal fee in an amount not to |
|
|
exceed $500. A person must renew an expired registration in the |
|
|
manner determined by the commissioner. |
|
|
(d) A registered financial services company is subject to |
|
|
Subchapters D and E as if the company were licensed as a residential |
|
|
mortgage loan company. |
|
|
SECTION 33. Subsections (a), (b), (c), and (h), Section |
|
|
156.301, Finance Code, are amended to read as follows: |
|
|
(a) The commissioner may conduct inspections of a person |
|
|
licensed under this chapter or a residential mortgage loan |
|
|
originator who is licensed under Chapter 157 and sponsored by and |
|
|
conducting business for a licensed or registered residential |
|
|
mortgage loan company under this chapter as the commissioner |
|
|
determines necessary to determine whether the person or the |
|
|
residential mortgage loan originator is complying with this chapter |
|
|
and applicable rules. The inspections may include inspection of |
|
|
the books, records, documents, operations, and facilities of the |
|
|
person or the residential mortgage loan originator and access to |
|
|
any documents required under rules adopted under this chapter. The |
|
|
commissioner may share evidence of criminal activity gathered |
|
|
during an inspection or investigation with any state or federal law |
|
|
enforcement agency. |
|
|
(b) On the signed written complaint of a person, the |
|
|
commissioner shall investigate the actions and records of a person |
|
|
licensed under this chapter or a residential mortgage loan |
|
|
originator who is licensed under Chapter 157 and sponsored by and |
|
|
conducting business for a licensed or registered residential |
|
|
mortgage loan company under this chapter if the complaint, or the |
|
|
complaint and documentary or other evidence presented in connection |
|
|
with the complaint, provides reasonable cause. The commissioner, |
|
|
before commencing an investigation, shall notify the [a] |
|
|
residential mortgage loan company or the residential mortgage loan |
|
|
originator in writing of the complaint and that the commissioner |
|
|
intends to investigate the matter. |
|
|
(c) For reasonable cause, the commissioner at any time may |
|
|
investigate a person licensed under this chapter or a residential |
|
|
mortgage loan originator who is licensed under Chapter 157 and |
|
|
sponsored by and conducting business for a licensed or registered |
|
|
residential mortgage loan company under this chapter to determine |
|
|
whether the person or the residential mortgage loan originator is |
|
|
complying with this chapter and applicable rules. |
|
|
(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 license holder |
|
|
[residential mortgage loan company] if records are located out of |
|
|
state or if the review is considered necessary beyond the routine |
|
|
examination process. The finance commission by rule shall set the |
|
|
maximum amount for the reimbursement of expenses authorized under |
|
|
this subsection. |
|
|
SECTION 34. Section 156.303, Finance Code, is amended by |
|
|
amending Subsections (a), (a-1), (g), and (i) and adding Subsection |
|
|
(k) 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 credit |
|
|
card charge back or a check issued to the commissioner after the |
|
|
commissioner has mailed a request for payment, including payment of |
|
|
[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 D, |
|
|
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. |
|
|
(k) The commissioner may, at the commissioner's discretion, |
|
|
rescind or vacate any previously issued order. |
|
|
SECTION 35. Subsection (a), Section 156.304, Finance Code, |
|
|
is amended to read as follows: |
|
|
(a) Before the completion of all services to be performed, a |
|
|
residential mortgage loan originator sponsored by and conducting |
|
|
business for a licensed or registered residential mortgage loan |
|
|
company under this chapter 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. |
|
|
SECTION 36. 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 37. Subsection (d), Section 156.401, 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 38. Subsection (a), Section 156.406, Finance Code, |
|
|
is amended to read as follows: |
|
|
(a) A person, unless otherwise exempt, commits an offense if |
|
|
the person conducts regulated activities under this chapter without |
|
|
first obtaining a license or registration as required by Section |
|
|
156.201, 156.2012, or 157.012, as applicable. [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.] An offense under this subsection |
|
|
is a Class B misdemeanor. A second or subsequent conviction for an |
|
|
offense under this subsection shall be punished as a Class A |
|
|
misdemeanor. |
|
|
SECTION 39. The heading to Subchapter F, Chapter 156, |
|
|
Finance Code, is amended to read as follows: |
|
|
SUBCHAPTER F. [MORTGAGE BROKER] RECOVERY FUND |
|
|
SECTION 40. Subsection (b), Section 156.501, 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 156.304(b). |
|
|
SECTION 41. Subsection (a), Section 156.502, Finance Code, |
|
|
is amended to read as follows: |
|
|
(a) On an application for an original license or for renewal |
|
|
of a license issued under Chapter 157 [this chapter], the |
|
|
applicant, in addition to paying the original application fee or |
|
|
renewal fee, shall pay a fee in an amount determined by the |
|
|
commissioner, not to exceed $20. The fee shall be deposited in the |
|
|
recovery fund. |
|
|
SECTION 42. Subsection (a), Section 156.503, 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 43. Subsection (b), Section 156.504, 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 |
|
|
156.304(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 44. Subsection (b), Section 156.505, 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 45. Subsections (a), (c), and (d), Section 156.506, |
|
|
Finance Code, are amended to read as follows: |
|
|
(a) The commissioner may revoke or suspend a license issued |
|
|
under Chapter 157 [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 46. The heading to Chapter 157, Finance Code, is |
|
|
amended to read as follows: |
|
|
CHAPTER 157. [REGISTRATION OF] MORTGAGE BANKERS AND RESIDENTIAL |
|
|
MORTGAGE LOAN ORIGINATORS |
|
|
SECTION 47. 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 48. 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 49. Chapter 157, Finance Code, is amended by adding |
|
|
Subchapter B to read as follows: |
|
|
SUBCHAPTER B. ADMINISTRATIVE PROVISIONS |
|
|
Sec. 157.0024. MORTGAGE INDUSTRY ADVISORY COMMITTEE. The |
|
|
mortgage industry advisory committee shall advise and assist the |
|
|
commissioner with respect to this chapter as provided by Section |
|
|
156.104. |
|
|
SECTION 50. Sections 157.003, 157.004, 157.005, 157.006, |
|
|
157.0061, 157.0062, 157.009, and 157.010, 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. REGISTRATION OF MORTGAGE BANKERS |
|
|
SECTION 51. Subsection (b), Section 157.003, 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 52. Section 157.004, Finance Code, is amended to |
|
|
read as follows: |
|
|
Sec. 157.004. EXEMPTIONS. This chapter does not apply to: |
|
|
(1) a federally insured bank, savings bank, savings |
|
|
and loan association, Farm Credit System Institution, or credit |
|
|
union; |
|
|
(2) a subsidiary of a federally insured bank, savings |
|
|
bank, savings and loan association, Farm Credit System Institution, |
|
|
or credit union; |
|
|
(3) a residential mortgage loan company licensed |
|
|
[person licensed as a mortgage broker] under Chapter 156; |
|
|
(4) an authorized lender licensed under Chapter 342; |
|
|
or |
|
|
(5) the state or a governmental agency, political |
|
|
subdivision, or other instrumentality of the state, or an employee |
|
|
of the state or a governmental agency, political subdivision, or |
|
|
instrumentality of the state who is acting within the scope of the |
|
|
person's employment. |
|
|
SECTION 53. 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 54. Sections 157.007 and 157.008, Finance Code, are |
|
|
transferred to Subchapter B, Chapter 157, Finance Code, as added by |
|
|
this Act, and redesignated as Sections 157.0021 and 157.0022, |
|
|
Finance Code, to read as follows: |
|
|
Sec. 157.0021 [157.007]. DISCLOSURE STATEMENT. (a) A |
|
|
mortgage banker that is a residential mortgage loan originator |
|
|
shall include a notice to a residential mortgage loan applicant |
|
|
with an application for a residential mortgage loan. The finance |
|
|
commission by rule shall adopt a standard disclosure form to be used |
|
|
by the mortgage banker. The form must: |
|
|
(1) include the name, address, and toll-free telephone |
|
|
number for the Department of Savings and Mortgage Lending; |
|
|
(2) contain information on how to file a complaint or |
|
|
recovery fund claim; and |
|
|
(3) prescribe a method for proof of delivery to the |
|
|
consumer. |
|
|
(b) A mortgage banker that indicates in its registration |
|
|
that it acts as a residential mortgage loan servicer shall provide |
|
|
to the borrower of each residential mortgage loan it services the |
|
|
following notice not later than the 30th day after the date the |
|
|
mortgage banker commences servicing the loan: |
|
|
"COMPLAINTS REGARDING THE SERVICING OF YOUR MORTGAGE SHOULD |
|
|
BE SENT TO THE DEPARTMENT OF SAVINGS AND MORTGAGE LENDING, |
|
|
______________________________ (street address of the Department |
|
|
of Savings and Mortgage Lending). A TOLL-FREE CONSUMER HOTLINE IS |
|
|
AVAILABLE AT _______________ (telephone number of the Department of |
|
|
Savings and Mortgage Lending's toll-free consumer hotline)." |
|
|
Sec. 157.0022 [157.008]. COMPLAINTS. (a) If the |
|
|
Department of Savings and Mortgage Lending receives a signed |
|
|
written complaint from a person concerning a mortgage banker, the |
|
|
commissioner shall notify the representative designated by the |
|
|
mortgage banker under Section 157.003(b) in writing of the |
|
|
complaint and provide a copy of the complaint to the |
|
|
representative. |
|
|
(b) The commissioner may request documentary and other |
|
|
evidence considered by the commissioner as necessary to effectively |
|
|
evaluate the complaint, including correspondence, loan documents, |
|
|
and disclosures. A mortgage banker shall promptly provide any |
|
|
evidence requested by the commissioner. |
|
|
(c) The commissioner may require the mortgage banker to |
|
|
resolve the complaint or to provide the commissioner with a |
|
|
response to the complaint. The commissioner may direct the |
|
|
mortgage banker in writing to take specific action to resolve the |
|
|
complaint. |
|
|
SECTION 55. 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 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 56. Section 157.011, Finance Code, is transferred |
|
|
to Subchapter B, Chapter 157, Finance Code, as added by this Act, |
|
|
and redesignated as Section 157.0023, Finance Code, to read as |
|
|
follows: |
|
|
Sec. 157.0023 [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 57. 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 D, Chapter 157, Finance Code, and a |
|
|
heading is added to that subchapter to read as follows: |
|
|
SUBCHAPTER D. LICENSING OF RESIDENTIAL MORTGAGE LOAN ORIGINATORS; |
|
|
DISCLOSURES AND REQUIREMENTS |
|
|
SECTION 58. 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 59. Section 157.012, Finance Code, is amended by |
|
|
amending Subsections (a) and (c) and adding Subsection (e) to read |
|
|
as follows: |
|
|
(a) An individual [An employee of a mortgage banker] may not |
|
|
act or attempt to act in the capacity of a residential mortgage loan |
|
|
originator unless the individual is exempt under Section 157.0121 |
|
|
or 180.003(b) or [employee]: |
|
|
(1) is licensed under this chapter, sponsored by an |
|
|
appropriate entity [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. |
|
|
(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) In this section, "appropriate entity" means an entity: |
|
|
(1) that is licensed or registered under this chapter |
|
|
or Chapter 156; and |
|
|
(2) for which the individual is acting as a |
|
|
residential mortgage loan originator. |
|
|
SECTION 60. Subchapter D, 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 61. 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 62. Subchapter D, Chapter 157, Finance Code, as |
|
|
added by this Act, is amended by adding Sections 157.0131 and |
|
|
157.0132 to read as follows: |
|
|
Sec. 157.0131. 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. 157.0132. 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; or |
|
|
(B) 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 63. Subchapter D, 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 64. Section 157.015, Finance Code, is amended by |
|
|
amending Subsections (a), (c), (d), and (g) and adding Subsections |
|
|
(d-1) and (h) to read as follows: |
|
|
(a) 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]. |
|
|
(c) An application for renewal [of a residential mortgage
|
|
|
loan originator license] shall be in the form prescribed by the |
|
|
commissioner [meet the requirements of Section 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 157.0132 [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. |
|
|
(g) The commissioner may deny the renewal application for a |
|
|
residential mortgage loan originator license if: |
|
|
(1) the person seeking the renewal of the residential |
|
|
mortgage loan originator license is in violation of this chapter, |
|
|
Chapter 156, or Chapter 180, an applicable rule adopted under this |
|
|
chapter, Chapter 156, or Chapter 180, or any order previously |
|
|
issued to the person by the commissioner; |
|
|
(2) the person seeking renewal of the residential |
|
|
mortgage loan originator license is in default in the payment of any |
|
|
administrative penalty, fee, charge, or other indebtedness owed |
|
|
under this title; |
|
|
(3) the person seeking the renewal of the residential |
|
|
mortgage loan originator license is in default on a student loan |
|
|
administered by the Texas Guaranteed Student Loan Corporation, |
|
|
under Section 57.491, Education Code; or |
|
|
(4) during the current term of the license, the |
|
|
commissioner becomes aware 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 granted. |
|
|
(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 65. Subsection (a), Section 157.016, Finance Code, |
|
|
is amended to read as follows: |
|
|
(a) A person whose residential mortgage loan originator |
|
|
license has expired may not engage in activities that require a |
|
|
license until the license has been reinstated or a new license has |
|
|
been issued [renewed]. |
|
|
SECTION 66. Subsection (g), Section 157.017, 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 67. The heading to Section 157.019, Finance Code, |
|
|
is amended to read as follows: |
|
|
Sec. 157.019. MODIFICATION OF LICENSE; CHANGE OF |
|
|
SPONSORSHIP. |
|
|
SECTION 68. Section 157.019, Finance Code, is amended by |
|
|
amending Subsections (a) and (c) and adding Subsections (d) and (e) |
|
|
to read as follows: |
|
|
(a) Before the 10th day preceding the effective date of an |
|
|
address change, [a mortgage banker employee who is] a residential |
|
|
mortgage loan originator shall notify the commissioner or |
|
|
authorized designee in writing of the new address. |
|
|
(c) When the sponsorship of a residential mortgage loan |
|
|
originator is terminated, the residential mortgage loan originator |
|
|
or the former sponsoring entity licensed or registered under this |
|
|
chapter or Chapter 156 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, an entity |
|
|
licensed or registered under this chapter or Chapter 156 files a |
|
|
request, accompanied by a $25 fee, notifying the commissioner that |
|
|
the entity 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 the entity licensed or registered under this chapter or |
|
|
Chapter 156 that is 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 69. Section 157.020, Finance Code, is amended by |
|
|
adding Subsection (a-1) to read as follows: |
|
|
(a-1) A 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 originator; |
|
|
(2) must include any information required by the |
|
|
commissioner; and |
|
|
(3) must be filed as frequently as required by the |
|
|
commissioner. |
|
|
SECTION 70. Subchapter D, Chapter 157, Finance Code, as |
|
|
added by this Act, is amended by adding Sections 157.02012, |
|
|
157.02013, 157.02014, 157.02015, and 157.02016 to read as follows: |
|
|
Sec. 157.02012. STANDARD FORMS. (a) The finance |
|
|
commission by rule shall adopt one or more standard forms for use by |
|
|
a residential mortgage loan originator, sponsored by and conducting |
|
|
business for a registered mortgage banker under this chapter, 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. 157.02013. SECONDARY MARKET TRANSACTIONS. This |
|
|
chapter does not prohibit a residential mortgage loan originator |
|
|
sponsored by and conducting business for a registered mortgage |
|
|
banker under this chapter 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. 157.02014. 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 sponsored by and conducting business for |
|
|
a registered mortgage banker under this chapter and other |
|
|
professionals if the residential mortgage loan originator complies |
|
|
with all applicable federal and state laws permitting those |
|
|
arrangements or services. |
|
|
Sec. 157.02015. 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. 157.02016. ADMINISTRATION OF SUBCHAPTER. The |
|
|
commissioner shall administer and enforce this subchapter. |
|
|
SECTION 71. 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 E, |
|
|
Chapter 157, Finance Code, and a heading is added to that subchapter |
|
|
to read as follows: |
|
|
SUBCHAPTER E. ENFORCEMENT |
|
|
SECTION 72. 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 the sponsoring mortgage banker in providing needed |
|
|
documents and records. The commissioner may not make a request of |
|
|
the sponsoring 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. The finance commission by |
|
|
rule shall set the maximum amount for the reimbursement of expenses |
|
|
authorized under this subsection. |
|
|
SECTION 73. 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 74. Subsection (a), Section 157.023, Finance Code, |
|
|
is amended to read as follows: |
|
|
(a) The commissioner, after notice and opportunity for a |
|
|
hearing, may impose an administrative penalty on an individual who |
|
|
is licensed or required to be licensed under this chapter as a |
|
|
residential mortgage loan originator and who violates this chapter, |
|
|
Chapter 156, or a rule or order adopted under this chapter or |
|
|
Chapter 156. |
|
|
SECTION 75. Subsections (a), (h), and (j), Section 157.024, |
|
|
Finance Code, are 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 or Chapter 156 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 credit |
|
|
card charge back or a check issued to the commissioner after the |
|
|
commissioner mailed a request for payment, including any applicable |
|
|
fees, by mail to the person's last known home [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 or Chapter 156; |
|
|
(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, Chapter |
|
|
156, a rule adopted under this chapter or Chapter 156, or an order |
|
|
issued by the commissioner under this chapter or Chapter 156; |
|
|
(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 or Chapter 156 is required; [or] |
|
|
(17) established an association, by employment or |
|
|
otherwise, with a person not licensed, registered, 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 under Chapter 156 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. |
|
|
(h) If a residential mortgage loan originator 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 residential mortgage loan |
|
|
originator, may without a prior hearing suspend the residential |
|
|
mortgage loan originator's license. The suspension continues until |
|
|
the residential mortgage loan originator has complied with the |
|
|
administrative order or paid the administrative penalty. During |
|
|
the period of suspension, the residential mortgage loan originator |
|
|
may not originate a residential mortgage loan and all compensation |
|
|
received by the residential mortgage loan originator during the |
|
|
period of suspension is subject to forfeiture as provided by |
|
|
Section 157.031(a-1)[, as defined by Section 180.002]. |
|
|
(j) An order revoking the license of a residential mortgage |
|
|
loan originator may provide that the person is prohibited, without |
|
|
previously obtaining written consent of the commissioner, from: |
|
|
(1) engaging in the business of originating or making |
|
|
residential mortgage loans[, as defined by Section 180.002]; |
|
|
(2) otherwise affiliating with a person for the |
|
|
purpose of engaging in the business of originating or making |
|
|
residential mortgage loans[, as defined by Section 180.002]; and |
|
|
(3) being an employee, officer, director, manager, |
|
|
shareholder, member, agent, contractor, or processor of a mortgage |
|
|
banker, residential mortgage loan company, or residential mortgage |
|
|
loan originator for a residential mortgage loan company. |
|
|
SECTION 76. Subsection (e), Section 157.0241, Finance Code, |
|
|
is amended to read as follows: |
|
|
(e) This section does not limit the authority of the |
|
|
commissioner to take disciplinary action against a residential |
|
|
mortgage loan originator for a violation of this chapter, Chapter |
|
|
156, or the rules adopted by the finance commission under this |
|
|
chapter or Chapter 156. 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 this chapter or Chapter 156. |
|
|
SECTION 77. Section 157.025, Finance Code, is amended to |
|
|
read as follows: |
|
|
Sec. 157.025. RESTITUTION. The commissioner may order a |
|
|
residential mortgage loan originator to make restitution for any |
|
|
amount received by that person in violation of this chapter or |
|
|
Chapter 156. |
|
|
SECTION 78. Section 157.026, Finance Code, is amended by |
|
|
amending Subsection (b) and adding Subsection (e) to read as |
|
|
follows: |
|
|
(b) If the commissioner proposes to suspend or revoke a |
|
|
license of a residential mortgage loan originator or if the |
|
|
commissioner refuses to issue or renew [a license to an applicant
|
|
|
for] a residential mortgage loan originator license [or person
|
|
|
requesting a renewal of a residential mortgage loan originator
|
|
|
license] under this chapter, the applicant or license holder is |
|
|
entitled to a hearing before the commissioner or an administrative |
|
|
law judge who shall make a proposal for decision to the |
|
|
commissioner. The commissioner or administrative law judge shall |
|
|
prescribe the time and place of the hearing. The hearing is |
|
|
governed by Chapter 2001, Government Code. |
|
|
(e) The commissioner may, in the commissioner's discretion, |
|
|
rescind or vacate any previously issued revocation order. |
|
|
SECTION 79. Subsection (a), Section 157.027, Finance Code, |
|
|
is amended to read as follows: |
|
|
(a) A residential mortgage loan applicant injured by a |
|
|
violation of this chapter or Chapter 156 by a residential mortgage |
|
|
loan originator may bring an action for recovery of actual monetary |
|
|
damages and reasonable attorney's fees and court costs. |
|
|
SECTION 80. Subsection (b), Section 157.030, Finance Code, |
|
|
is amended to read as follows: |
|
|
(b) This section does not limit or preclude the liability of |
|
|
a residential mortgage loan originator for: |
|
|
(1) failing to comply with this chapter, Chapter 156, |
|
|
or a rule adopted under this chapter or Chapter 156; |
|
|
(2) failing to comply with a provision of or duty |
|
|
arising under an agreement with a residential mortgage loan |
|
|
applicant under this chapter or Chapter 156; or |
|
|
(3) violating any other state or federal law. |
|
|
SECTION 81. Section 157.031, Finance Code, is amended by |
|
|
amending Subsection (a) and adding Subsection (a-1) to read as |
|
|
follows: |
|
|
(a) An individual who is not exempt under this chapter or |
|
|
other applicable law 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) An individual who received money, or the equivalent of |
|
|
money, as a fee or profit because of or in consequence of the |
|
|
individual 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 82. Subchapter E, 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 D or a rule adopted under |
|
|
Subchapter D. 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 D. |
|
|
(b) The commissioner is not required to provide an appeal |
|
|
bond in any action or proceeding to enforce Subchapter D. |
|
|
(c) The commissioner may authorize specific employees to |
|
|
conduct hearings and make recommendations for final decisions in |
|
|
contested cases. |
|
|
SECTION 83. 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 84. Subdivisions (17) and (21), Section 180.002, |
|
|
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 85. Subsection (a), Section 180.056, 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 and adopted by rule of the rulemaking authority. |
|
|
SECTION 86. Subsection (a), Section 180.251, 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 87. The following provisions of the Finance Code |
|
|
are repealed: |
|
|
(1) Section 15.4024; |
|
|
(2) Sections 156.2015, 156.205, and 156.405; |
|
|
(3) Subsections (a-1) and (a-2), Section 156.101; |
|
|
(4) Subsections (b), (b-1), and (b-2), Section |
|
|
156.201; |
|
|
(5) Subsection (b), Section 156.102, Subsection (c), |
|
|
Section 156.202, Subsection (c), Section 156.203, Subsection (b), |
|
|
Section 156.2041, Subsection (b), Section 156.2042, Subsection |
|
|
(b), Section 156.2043, Subsection (c), Section 156.2044, Section |
|
|
156.2045, Subsection (a), Section 156.206, Subsections (b), (c), |
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and (d), Section 156.207, and Subsection (c), Section 156.2081; |
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(6) Subsections (b-1), (b-2), and (j), Section |
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156.208; |
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(7) Subsection (f), Section 157.003, Finance Code, as |
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added by Chapter 655 (Senate Bill No. 1124), Acts of the 82nd |
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Legislature, Regular Session, 2011; |
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(8) Subsection (d), Section 157.012, and Subsection |
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(b), Section 157.015; and |
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(9) Subsection (b), Section 180.251. |
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SECTION 88. The changes in law made by this Act do not |
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affect any pending proceeding or action brought under Subchapter D, |
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Chapter 156, Finance Code, as that subchapter existed immediately |
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before amendment by this Act, and the former law is continued in |
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effect for that purpose. |
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SECTION 89. The changes in law made by this Act apply only |
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to a license or registration issued or renewed on or after the |
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effective date of this Act. A license or registration issued or |
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|
renewed before the effective date of this Act is governed by the law |
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|
in effect on the date the license or registration was issued or |
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renewed, and the former law is continued in effect for that purpose. |
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SECTION 90. This Act takes effect September 1, 2013. |