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A BILL TO BE ENTITLED
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AN ACT
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relating to an exemption for certain property owners from |
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regulatory requirements for residential mortgage loan originators. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 156.2012(b), Finance Code, is amended to |
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read as follows: |
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(b) To be eligible to register as a registered financial |
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services company, a person must: |
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(1) be a depository institution exempt from this |
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chapter under Section 156.202(a-1)(5)(A) [156.202(a-1)(4)(A)] and |
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chartered and regulated by the Office of the Comptroller of the |
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Currency, or be a subsidiary of the institution; |
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(2) provide a business plan satisfactory to the |
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commissioner that sets forth the person's plan to: |
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(A) provide education to its sponsored |
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residential mortgage loan originators; |
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(B) handle consumer complaints relating to its |
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sponsored residential mortgage loan originators; and |
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(C) supervise the residential mortgage loan |
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origination activities of its sponsored residential mortgage loan |
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originators; |
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(3) pay a registration fee in an amount not to exceed |
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$500; |
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(4) designate an officer of the person to be |
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responsible for the activities of its sponsored residential |
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mortgage loan originators; |
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(5) submit a completed application through the |
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Nationwide Mortgage Licensing System and Registry together with the |
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applicable fee required by Subdivision (3) or Subsection (c); |
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(6) obtain preapproval from the commissioner that the |
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person meets the eligibility requirements for registration as a |
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financial services company; and |
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(7) 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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SECTION 2. 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) subject to Subsection (b), any owner of |
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residential real estate who in any 12-consecutive-month period |
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makes no more than three residential mortgage loans to purchasers |
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of the property for all or part of the purchase price of the |
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residential real estate against which the mortgage is secured; |
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[and] |
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(4) an owner of residential real estate who makes a |
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first lien mortgage loan to a purchaser of the property against |
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which the mortgage is secured, provided that all residential |
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mortgage loan origination activity in connection with the loan is |
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provided by a properly sponsored and authorized licensee who is |
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required to comply with the requirements of Chapter 180; and |
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(5) 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 3. Section 180.003(a), Finance Code, is amended to |
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read as follows: |
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(a) The following persons are exempt from this chapter: |
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(1) a registered mortgage loan originator when acting |
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for an entity described by Section 180.002(16)(A)(i), (ii), or |
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(iii); |
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(2) an individual who offers or negotiates terms of a |
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residential mortgage loan with or on behalf of an immediate family |
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member of the individual; |
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(3) a licensed attorney who negotiates the terms of a |
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residential mortgage loan on behalf of a client as an ancillary |
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matter to the attorney's representation of the client, unless the |
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attorney: |
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(A) takes a residential mortgage loan |
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application; and |
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(B) offers or negotiates the terms of a |
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residential mortgage loan; |
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(4) an individual who offers or negotiates terms of a |
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residential mortgage loan secured by a dwelling that serves as the |
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individual's residence; |
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(5) subject to Subsection (d), an owner of residential |
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real estate who in any 12-consecutive-month period makes no more |
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than three residential mortgage loans to purchasers of the property |
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for all or part of the purchase price of the residential real estate |
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against which the mortgage is secured; [and] |
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(6) subject to Subsection (d), an owner of a dwelling |
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who in any 12-consecutive-month period makes no more than three |
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residential mortgage loans to purchasers of the property for all or |
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part of the purchase price of the dwelling against which the |
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mortgage or security interest is secured; and |
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(7) an owner of residential real estate who makes a |
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first lien mortgage loan to a purchaser of the property against |
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which the mortgage is secured, provided that all residential |
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mortgage loan origination activity in connection with the loan is |
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provided by a properly sponsored and authorized licensee who is |
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required to comply with the requirements of this chapter. |
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SECTION 4. This Act takes effect September 1, 2025. |