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A BILL TO BE ENTITLED
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AN ACT
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relating to the regulation of residential mortgage loan companies, |
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including the registration of mortgage lot lender companies; |
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authorizing a fee. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 156.002, Finance Code, is amended by |
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adding Subdivision (8-b) and amending Subdivisions (10-b) and (13) |
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to read as follows: |
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(8-b) "Mortgage lot lender company" means a |
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corporation, company, partnership, or sole proprietorship that |
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engages in the business of residential mortgage loan origination on |
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residential real estate located in this state on which no dwelling |
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is constructed to purchasers of the residential real estate for all |
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or part of the purchase price of the residential real estate against |
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which the mortgage is secured. |
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(10-b) "Qualifying individual" means an individual |
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who is: |
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(A) except as provided by Section |
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156.2045(a)(3), licensed under Chapter 157 as a residential |
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mortgage loan originator; and |
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(B) designated by a residential mortgage loan |
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company as the company's representative. |
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(13) "Residential mortgage loan company" means a |
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person, other than an individual, that engages in the business of |
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residential mortgage loan origination on residential real estate |
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located in this state. The term includes a credit union subsidiary |
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organization, auxiliary mortgage loan activity company, mortgage |
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company, independent contractor loan processor or underwriter |
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company, mortgage lot lender company, and financial services |
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company. |
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SECTION 2. Section 156.201, Finance Code, is amended to |
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read as follows: |
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Sec. 156.201. LICENSES REQUIRED. (a) A person may not act |
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in the capacity of, engage in the business of, or advertise or hold |
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that person out as engaging in or conducting the business of a |
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residential mortgage loan company in this state unless the person |
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holds an active residential mortgage loan company license, is |
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registered under Section 156.2012, is registered under Section |
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156.2045, or is exempt under Section 156.202. |
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(c) Each residential mortgage loan company and the |
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company's qualifying individual are [licensed under Chapter 157 is] |
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responsible to the commissioner and members of the public for any |
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act or conduct performed by the residential mortgage loan |
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originator sponsored by or acting for the residential mortgage loan |
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company in connection with: |
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(1) the origination of a residential mortgage loan; or |
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(2) a transaction that is related to the origination |
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of a residential mortgage loan in which the qualifying individual |
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knew or should have known of the transaction. |
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SECTION 3. Section 156.202(a-1), Finance Code, is amended |
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to read as follows: |
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(a-1) The following entities are exempt from this chapter: |
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(1) a nonprofit organization: |
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(A) providing self-help housing that originates |
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zero interest residential mortgage loans for borrowers who have |
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provided part of the labor to construct the dwelling securing the |
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loan; or |
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(B) that has designation as a Section 501(c)(3) |
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organization by the Internal Revenue Service and originates |
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residential mortgage loans for borrowers who, through a self-help |
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program, have provided at least 200 labor hours or 65 percent of the |
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labor to construct the dwelling securing the loan; |
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(2) a mortgage banker registered under Chapter 157; |
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(3) any owner of residential real estate who in any |
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12-consecutive-month period makes no more than five residential |
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mortgage loans to purchasers of the residential real estate |
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[property] for all or part of the purchase price of the residential |
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real estate against which the mortgage is secured; and |
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(4) an entity that is: |
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(A) a depository institution; |
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(B) a subsidiary of a depository institution that |
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is: |
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(i) owned and controlled by the depository |
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institution; and |
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(ii) regulated by a federal banking agency; |
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or |
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(C) an institution regulated by the Farm Credit |
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Administration. |
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SECTION 4. Section 156.203, Finance Code, is amended by |
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adding Subsection (a-3) to read as follows: |
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(a-3) An application for a mortgage lot lender company |
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registration under Section 156.2045 must be: |
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(1) in writing; |
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(2) under oath; and |
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(3) on the form prescribed by the commissioner. |
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SECTION 5. Subchapter C, Chapter 156, Finance Code, is |
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amended by adding Section 156.2045 to read as follows: |
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Sec. 156.2045. QUALIFICATIONS AND REQUIREMENTS FOR |
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REGISTRATION: MORTGAGE LOT LENDER COMPANY. (a) To be registered as |
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a mortgage lot lender company, an applicant must: |
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(1) submit a completed application together with the |
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payment of applicable fees through the Nationwide Mortgage |
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Licensing System and Registry; |
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(2) designate control persons for the company through |
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the Nationwide Mortgage Licensing System and Registry; |
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(3) designate an individual as the company's |
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qualifying individual who is either: |
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(A) an owner, officer, or partner of the company; |
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or |
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(B) a residential mortgage loan originator who is |
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licensed under Chapter 157; |
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(4) properly sponsor one or more residential mortgage |
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loan originators who are licensed under Chapter 157; |
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(5) not be in violation of this chapter, a rule adopted |
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under this chapter, or any order previously issued by the |
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commissioner to the applicant; |
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(6) have the company name or assumed name properly |
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filed with either the secretary of state or the appropriate county |
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clerk's office; |
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(7) maintain a physical office in this state; and |
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(8) provide any other information required by the |
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commissioner. |
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(b) If the commissioner determines that a person has met the |
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requirements of Subsection (a), the commissioner shall issue a |
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registration to the person. The registration is valid for one year, |
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expires on December 31 of each year, and must be renewed annually by |
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meeting the requirements under Subsection (a) and paying a renewal |
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fee in an amount not to exceed $500. A person must renew an expired |
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registration in the manner determined by the commissioner. |
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(c) A registered mortgage lot lender company is subject to |
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Subchapters D and E as if the company were licensed as a residential |
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mortgage loan company. |
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SECTION 6. As soon as practicable after the effective date |
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of this Act, the Finance Commission of Texas shall adopt the rules |
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necessary to implement the changes in law made by this Act, and the |
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savings and mortgage lending commissioner shall begin registering |
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persons as mortgage lot lender companies as required by Section |
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156.2045, Finance Code, as added by this Act. |
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SECTION 7. This Act takes effect September 1, 2017. |