Texas House Bill HB4166

Texas 2025 - 89th Regular

• Filed: 3/10/25

Caption

Relating to an exemption for certain property owners from regulatory requirements for residential mortgage loan originators.

Impact

If passed, HB 4166 could significantly lessen the regulatory constraints for individuals who own residential properties and wish to extend loans to buyers. Eligible property owners may engage in occasional lending activities—within a specified limit of loans per year—without the full compliance obligations that come with being classified as a residential mortgage loan originator. This shift is intended to promote local lending and potentially aid in the accessibility of housing for buyers, particularly in communities where traditional lending options may be limited.

Summary

House Bill 4166 aims to amend the Texas Finance Code by providing exemptions to certain property owners from regulatory requirements imposed on residential mortgage loan originators. The bill outlines specific eligibility criteria for property owners to qualify for this exemption, permitting them to engage in limited lending activities without being subject to the same regulatory burdens typically imposed on mortgage loan originators. Notably, the bill seeks to facilitate homeownership by making it easier for individuals to issue residential mortgage loans under certain conditions.

Contention

There are potential points of contention surrounding HB 4166, as opponents may voice concerns about consumer protections. Critics might argue that reducing restrictions on property owners could lead to a lack of oversight and standards in residential lending practices, which could ultimately harm borrowers. Additionally, the impact on the housing market and equitable access to financing could be scrutinized, as permitting individual property owners to lend could create variability in loan terms and borrower experiences. Proponents of the bill might counter these arguments by emphasizing the importance of easing the pathways to homeownership and enhancing local lending opportunities.

Texas Constitutional Statutes Affected

Finance Code

• Chapter 156. Residential Mortgage Loan Companies
  • Section: 2012
  • Section: New Section

• Chapter 180. Residential Mortgage Loan Originators
  • Section: New Section