81R4786 ATP-F
By: Rodriguez H.B. No. 2694
A BILL TO BE ENTITLED
AN ACT
relating to the duties of a residential mortgage servicer to a
borrower.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Title 5, Finance Code, is amended by adding
Chapter 397 to read as follows:
CHAPTER 397. RESIDENTIAL MORTGAGE SERVICERS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 397.001. DEFINITIONS. In this chapter, "debtor's last
known address," "mortgage servicer," and "mortgagee" have the
meanings assigned by Section 51.0001, Property Code.
Sec. 397.002. APPLICABILITY. (a) This chapter applies
only to a loan secured by a lien on residential real property.
(b) A mortgage servicer must comply with this chapter as to
every loan secured by a lien on residential real property,
regardless of whether the loan is considered delinquent or in
default or the debtor is or has been involved in bankruptcy
proceedings, except as otherwise provided by this chapter.
[Sections 397.003-397.050 reserved for expansion]
SUBCHAPTER B. SERVICING FEES
Sec. 397.051. SERVICING FEES GENERALLY. (a) A fee incurred
by a mortgage servicer in connection with a residential mortgage
loan and assessed on the debtor must be:
(1) assessed not later than the 45th day after the date
the fee:
(A) was incurred; or
(B) was charged by an attorney or trustee to the
servicer, for attorney or trust fees and costs incurred as a result
of a foreclosure action; and
(2) explained clearly and conspicuously in a statement
mailed to the debtor at the debtor's last known address not later
than the 30th day after the date the servicer assessed the fee,
except as prohibited by the United States Bankruptcy Code.
(b) A fee not charged in compliance with Subsection (a) is
waived.
Sec. 397.052. CREDIT OF FEES. (a) An amount received by a
mortgage servicer at the address where the debtor has been
instructed to make payments shall be accepted and credited, or
treated as credited, within one business day of the date received if
the debtor:
(1) has made the full contractual payment; and
(2) has provided sufficient information to credit the
account.
(b) If a mortgage servicer uses the scheduled method of
accounting, any regularly scheduled payment made before the
scheduled due date must be credited not later than the due date.
(c) If a payment is received and not credited or treated as
credited, the debtor must be notified by mail at the debtor's last
known address, on or before the 10th business day after the date the
payment was received, of:
(1) the disposition of the payment;
(2) the reason the payment was not credited or treated
as credited to the account; and
(3) any actions necessary by the debtor to make the
loan current.
Sec. 397.053. RELATIONSHIP TO OTHER LAW AND CONTRACTS. (a)
A fee charged by a mortgage servicer must be otherwise authorized by
applicable law and the contracts between the debtor and the
mortgagee.
(b) This subchapter is not intended to authorize the
application of payments or a method of charging interest that
offers less protection to the debtor than other applicable law and
the contracts between the debtor and mortgagee.
[Sections 397.054-397.100 reserved for expansion]
SUBCHAPTER C. OBLIGATION OF SERVICER TO HANDLE ESCROW FUNDS
Sec. 397.101. APPLICATION TO DELINQUENT LOANS. This
subchapter applies to a mortgage servicer regardless of whether the
loan is delinquent or in default, unless the servicer has a
reasonable basis to believe that:
(1) recovery of amounts expended by the servicer on
behalf of the borrower will not be possible; or
(2) the loan is more than 90 days in default.
Sec. 397.102. SERVICER'S DUTY TO MAKE PAYMENTS. A mortgage
servicer who exercises the authority to collect escrow amounts on a
loan held or to be held for the debtor for insurance, taxes, and
other charges with respect to the property shall collect and make
all payments from the escrow account so as to ensure that late
penalties are not assessed against the debtor and other negative
consequences to the debtor do not result.
[Sections 397.103-397.150 reserved for expansion]
SUBCHAPTER D. DEBTOR REQUESTS FOR INFORMATION
Sec. 397.151. RECORDKEEPING. A mortgage servicer shall
maintain written or electronic records of each written request for
information regarding a dispute or error involving the debtor's
account until the loan is paid in full, otherwise satisfied, or
sold.
Sec. 397.152. REASONABLE EFFORTS REQUIRED. A mortgage
servicer shall make reasonable attempts to comply with a debtor's
request for information about the account and to respond to any
dispute initiated by the debtor about the loan account as provided
by this subchapter.
Sec. 397.153. PROVISION OF GENERAL INFORMATION ON REQUEST.
(a) A mortgage servicer shall provide the following to a debtor in
response to a debtor's written request:
(1) a copy of the original note, or if the original
note is unavailable, an affidavit of lost note; and
(2) a statement that:
(A) identifies and itemizes all fees and charges
assessed under the loan transaction and provides a full payment
history identifying in a clear and conspicuous manner all of the
debits, credits, application of and disbursement of all payments
received from or for the benefit of the debtor, and other activity
on the loan including any escrow or suspense account activity; and
(B) covers the two years preceding the receipt of
the request or period for which the servicer has serviced the loan,
whichever is shorter.
(b) If the mortgage servicer claims that delinquent or
outstanding sums are owed on the loan before the two-year period
preceding the receipt of the request under Subsection (a) or before
the servicer began servicing the loan, the servicer shall provide
an account history beginning with the earliest month for which the
servicer claims outstanding sums are owed on the loan and ending on
the date of the request for information. For purposes of this
subsection, the date of the request for information is presumed to
be not later than the 30th day before the date the servicer receives
the request.
(c) A mortgage servicer must provide a statement under
Subsection (a) on or before the 25th business day after the date the
servicer receives a written request from the debtor that:
(1) includes or otherwise enables the servicer to
identify the name and account of the debtor; and
(2) includes a statement that the account is or may be
in error or otherwise provides sufficient detail to the servicer
regarding information sought by the debtor.
Sec. 397.154. PROVISION OF INFORMATION REGARDING DISPUTE OR
ERROR. (a) A mortgage servicer shall provide a written statement
to a debtor in response to a debtor's written request for
information regarding a dispute or error involving the debtor's
account that includes the following information, if requested:
(1) whether the account is current and an explanation
of any default and the date the account went into default;
(2) the current balance due on the loan, including the
principal due, the amount of any funds held in a suspense account,
the amount of any escrow balance known to the servicer, and whether
there are any escrow deficiencies or shortages known to the
servicer;
(3) the identity, address, and other relevant
information about the current holder, owner, or assignee of the
loan; and
(4) the telephone number and mailing address of a
servicer representative with the information and authority to
answer questions and resolve disputes.
(b) A mortgage servicer must provide a statement under
Subsection (a) on or before the 10th day after the date the servicer
receives a written request from the debtor that:
(1) includes or otherwise enables the servicer to
identify the name and account of the debtor; and
(2) includes a statement that the account is or may be
in error or otherwise provides sufficient detail to the servicer
regarding information sought by the debtor.
Sec. 397.155. FEE FOR PROVIDING INFORMATION. (a) A
mortgage servicer shall provide information under Section 397.153
or 397.154 free of charge, if the servicer has not provided to the
debtor a written statement under the applicable section regarding
the same account during the preceding six months.
(b) The mortgage servicer may charge the debtor a reasonable
fee for preparing and furnishing a statement if the servicer has
provided to the debtor a written statement under the same section
regarding the same account during the preceding six months. A fee
charged for information under Section 397.153 may not exceed $50
for each written statement. A fee charged for information under
Section 397.154 may not exceed $25 for each written statement.
Sec. 397.156. CORRECTION OF ERRORS. A mortgage servicer
shall promptly correct errors relating to the allocation of
payments, the statement of account, or the payoff balance
identified in any notice from the debtor provided in accordance
with this subchapter or discovered through other means, including
the diligence of the servicer.
[Sections 397.157-397.200 reserved for expansion]
SUBCHAPTER E. REMEDIES
Sec. 397.201. ENFORCEMENT GENERALLY. The Department of
Savings and Mortgage Lending, the attorney general, or any party to
a loan secured by a lien on residential real property may enforce
this chapter.
Sec. 397.202. ACTION BY DEBTOR. (a) In addition to any
other legal and equitable remedy available, a debtor injured by a
violation of this chapter may bring an action for recovery of actual
damages, including reasonable attorney's fees.
(b) Not later than the 30th day before a debtor or a debtor's
representative institutes an action for damages against a mortgage
servicer under this section, the debtor or debtor's representative
shall notify the servicer in writing of any claimed errors or
disputes regarding the debtor's loan that forms the basis of the
action. The notice must be sent to the address as designated on any
of the servicer's bills, statements, invoices, or other written
communication, and must enable the servicer to identify the name
and loan account of the debtor.
(c) This section does not limit the rights of a debtor to
enjoin an action, make a counterclaim or cross-claim, or plead a
defense in a civil action.
Sec. 397.203. SERVICER DEFENSE. A mortgage servicer will
not be in violation of this chapter if the servicer shows by a
preponderance of evidence that:
(1) the violation was not intentional or the result of
bad faith; and
(2) not later than the 30th day after the date the
servicer discovers or is notified of an error and before the debtor
institutes an action against the servicer under this subchapter,
the servicer corrects the error and compensates the debtor for any
fees or charges incurred by the debtor as a result of the violation.
SECTION 2. This Act takes effect September 1, 2009.