|
|
|
A BILL TO BE ENTITLED
|
|
AN ACT
|
|
relating to the regulation of residential mortgage loan companies, |
|
including requiring the registration of mortgage lot lender |
|
companies; imposing a fee. |
|
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
|
SECTION 1. Section 156.002, Finance Code, is amended by |
|
adding Subdivision (8-b) and amending Subdivisions (10-b) and (13) |
|
to read as follows: |
|
(8-b) "Mortgage lot lender company" means a |
|
corporation, company, partnership, or sole proprietorship that |
|
engages in the business of residential mortgage loan origination on |
|
residential real estate located in this state on which no dwelling |
|
is constructed to purchasers of the residential real estate for all |
|
or part of the purchase price of the residential real estate against |
|
which the mortgage is secured. |
|
(10-b) "Qualifying individual" means an individual |
|
who is: |
|
(A) except as provided by Section |
|
156.2013(b)(3), licensed under Chapter 157 as a residential |
|
mortgage loan originator; and |
|
(B) designated by a residential mortgage loan |
|
company as the company's representative. |
|
(13) "Residential mortgage loan company" means a |
|
person, other than an individual, that engages in the business of |
|
residential mortgage loan origination on residential real estate |
|
located in this state. The term includes a credit union subsidiary |
|
organization, auxiliary mortgage loan activity company, mortgage |
|
company, independent contractor loan processor or underwriter |
|
company, mortgage lot lender company, and financial services |
|
company. |
|
SECTION 2. Section 156.201, Finance Code, is amended to |
|
read as follows: |
|
Sec. 156.201. LICENSES REQUIRED. (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 or 156.2013, or is exempt under |
|
Section 156.202. |
|
(c) Each residential mortgage loan company and the |
|
company's qualifying individual are [licensed under Chapter 157 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 3. Section 156.2012(a), Finance Code, is amended to |
|
read as follows: |
|
(a) A financial services company may perform the services of |
|
a residential mortgage loan company if the company is registered |
|
under this section [chapter]. |
|
SECTION 4. Subchapter C, Chapter 156, Finance Code, is |
|
amended by adding Section 156.2013 to read as follows: |
|
Sec. 156.2013. REGISTERED MORTGAGE LOT LENDER COMPANY. (a) |
|
A mortgage lot lender company may perform the services of a |
|
residential mortgage loan company if the company is registered |
|
under this section. |
|
(b) To be registered as a mortgage lot lender company, a |
|
person 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 as the company's |
|
qualifying individual who is either: |
|
(A) an owner, officer, or partner of the company; |
|
or |
|
(B) a residential mortgage loan originator who is |
|
licensed under Chapter 157; |
|
(4) properly sponsor one or more residential mortgage |
|
loan originators who are licensed under Chapter 157; |
|
(5) not be in violation of this chapter, a rule adopted |
|
under this chapter, or any order previously issued by the |
|
commissioner to the person; |
|
(6) have the company name or assumed name properly |
|
filed with either the secretary of state or the appropriate county |
|
clerk's office; |
|
(7) maintain a physical office in this state; and |
|
(8) provide any other information required by the |
|
commissioner. |
|
(c) If the commissioner determines that a person has met the |
|
requirements of Subsection (b) and pays a registration fee in an |
|
amount not to exceed $500, 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 mortgage lot lender company is subject to |
|
Subchapters D and E as if the company were licensed as a residential |
|
mortgage loan company. |
|
SECTION 5. Section 156.202(a-1), Finance Code, is amended |
|
to read as follows: |
|
(a-1) The following entities are exempt from this chapter: |
|
(1) a nonprofit organization: |
|
(A) 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; or |
|
(B) that has designation as a Section 501(c)(3) |
|
organization by the Internal Revenue Service and originates |
|
residential mortgage loans for borrowers who, through a self-help |
|
program, have provided at least 200 labor hours or 65 percent of the |
|
labor to construct the dwelling securing the loan; |
|
(2) a mortgage banker registered under Chapter 157; |
|
(3) 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 residential real estate |
|
[property] for all or part of the purchase price of the residential |
|
real estate against which the mortgage is secured; and |
|
(4) 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. |
|
SECTION 6. Section 156.203, Finance Code, is amended by |
|
adding Subsection (a-3) to read as follows: |
|
(a-3) An application for a mortgage lot lender company |
|
registration under Section 156.2013 must be: |
|
(1) in writing; |
|
(2) under oath; and |
|
(3) on the form prescribed by the commissioner. |
|
SECTION 7. As soon as practicable after the effective date |
|
of this Act, the Finance Commission of Texas shall adopt the rules |
|
necessary to implement the changes in law made by this Act, and the |
|
savings and mortgage lending commissioner shall begin registering |
|
persons as mortgage lot lender companies as required by Section |
|
156.2013, Finance Code, as added by this Act. |
|
SECTION 8. This Act takes effect September 1, 2019. |