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A BILL TO BE ENTITLED
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AN ACT
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relating to certain property tax lenders, property tax loans, and |
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tax liens. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 32.06, Tax Code, is amended by amending |
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Subsections (a-2), (d), (f-1), and (h) to read as follows: |
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(a-2) Except as provided by Subsection (a-8), a tax lien may |
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be transferred to the person who pays the taxes on behalf of the |
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property owner under the authorization described by Subsection |
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(a-1) for: |
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(1) taxes that are delinquent at the time of payment; |
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or |
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(2) taxes that are due but not delinquent at the time |
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of payment if the property: |
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(A) is not subject to a recorded mortgage lien; |
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or |
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(B) is subject to a recorded mortgage lien |
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provided the person who pays the taxes on behalf of the property |
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owner under the authorization pays the taxes not earlier than |
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January 31st of the year following the year in which the taxes were |
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imposed. |
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(d) A transferee shall record [a tax lien transferred as |
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provided by this section with] the certified statement attesting to |
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the transfer of the tax lien as described by Subsection (b) in the |
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deed records of each county in which the property encumbered by the |
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lien is located. The transferee is not required to record in the |
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deed records of a county the sworn document filed under Subsection |
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(a-1)(1), but the transferee shall retain a copy of that sworn |
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document in its records. |
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(f-1) If an obligation secured by a preexisting first lien |
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on the property is delinquent for at least 90 consecutive days and |
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the obligation has been referred to a collection specialist, the |
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mortgage servicer or the holder of the first lien may send a notice |
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of the delinquency to the transferee of a tax lien. The mortgage |
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servicer or the first lienholder is entitled, within six months |
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after the date on which that notice is sent, to obtain a release of |
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the transferred tax lien by paying the transferee of the tax lien |
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the amount of the unpaid principal, fees, and interest owed under |
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the contract between the property owner and the transferee that are |
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directly attributable to the property taxes paid by the transferee |
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or the transferee's predecessor in interest on the specific real |
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property subject to the preexisting first lien. The Finance |
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Commission of Texas by rule shall prescribe the form and content of |
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the notice under this subsection. |
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(h) A mortgage servicer who pays a property tax loan secured |
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by a tax lien transferred under this section becomes subrogated to |
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all rights in the lien. A tax lien transferee who pays the amount |
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owed under an existing property tax loan of another property tax |
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lender becomes subrogated to all rights in the tax lien if; |
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(1) the existing property tax lender executes an |
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assignment of the tax lien; and |
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(2) the assignment is recorded in the deed records of |
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each county in which the property encumbered by the lien is located. |
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SECTION 2. Section 351.0021(a), Finance Code, is amended to |
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read as follows: |
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(a) The contract between a property tax lender and a |
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property owner may require the property owner to pay the following |
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costs after closing: |
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(1) a reasonable fee for filing the release of a tax |
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lien authorized under Section 32.06(b), Tax Code; |
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(2) a reasonable fee for a payoff statement authorized |
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under Section 32.06(f-3), Tax Code; |
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(3) a reasonable fee for providing information |
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regarding the current balance owed by the property owner authorized |
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under Section 32.06(g), Tax Code; |
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(4) reasonable and necessary attorney's fees, |
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recording fees, and court costs for actions that are legally |
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required to respond to a suit filed under Chapter 33, Tax Code, [or] |
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to perform a foreclosure, or in the collection of a delinquent loan, |
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including fees required to be paid to an official and fees for an |
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attorney ad litem; |
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(5) to the extent permitted by the United States |
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Bankruptcy Code, attorney's fees and court costs for services |
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performed after the property owner files a voluntary bankruptcy |
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petition; |
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(6) a reasonable fee for title examination and |
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preparation of an abstract of title by an attorney, a title company, |
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or a property search company authorized to do business in this |
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state; |
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(7) a processing fee for insufficient funds, as |
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authorized under Section 3.506, Business & Commerce Code; |
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(8) a fee for collateral protection insurance, as |
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authorized under Chapter 307; |
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(9) a prepayment penalty, unless the lien transferred |
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is on residential property owned and used by the property owner for |
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personal, family, or household purposes; |
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(10) recording expenses incurred in connection with a |
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modification necessary to preserve a borrower's ability to avoid a |
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foreclosure proceeding; and |
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(11) fees for copies of transaction documents |
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requested by the property owner. |
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SECTION 3. Subchapter A, Chapter 351, Finance Code, is |
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amended by adding Section 351.0024 to read as follows: |
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Sec. 351.0024. AFFILIATION WITH LEGAL SERVICES PROVIDER. A |
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property tax lender may not, and an owner, employee, or agent of a |
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property tax lender may not, have an economic or beneficial |
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interest in, or receive any form of consideration other than the |
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provision of legal services directly or indirectly from, an |
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individual or entity that provides legal services to the property |
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tax lender relating to loan document production or review, loan |
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servicing, loan enforcement, loan foreclosure, or the collection of |
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the loan. |
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SECTION 4. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2019. |