Texas Senate Bill SB2508

Texas 2025 - 89th Regular

• Filed: 3/13/25

Caption

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

Impact

If SB2508 is enacted, it would significantly alter how residential mortgage loans are regulated in Texas. Notably, it allows property owners to act as mortgage lenders without the burden of certain regulatory requirements, provided they meet specified criteria. For example, individuals who make three or fewer residential mortgage loans in a 12-month period may be exempt, provided that the loans are secured against properties they own. This change is expected to facilitate more flexible financial arrangements between property owners and prospective buyers, particularly in the context of self-help housing initiatives.

Summary

Senate Bill 2508 aims to modify regulatory requirements for residential mortgage loan originators, particularly focusing on exemptions for specific property owners. The bill introduces adjustments to the Finance Code, establishing criteria under which certain entities, such as non-profit organizations engaged in self-help housing, can qualify for exemptions from the standard mortgage origination regulations. This includes provisions that exempt property owners who engage in limited mortgage lending activities under specific conditions.

Contention

The potential implications of the bill have sparked discussions among stakeholders. Proponents argue that the bill would stimulate home ownership opportunities and support unique housing solutions, particularly in communities involved in self-help housing projects. Meanwhile, opponents may raise concerns over the potential risks associated with less regulated mortgage origination practices, potentially jeopardizing consumer protections in real estate transactions. The balance between promoting access to affordable housing and ensuring robust regulatory oversight remains a pivotal point of contention in the discussions surrounding this bill.

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