By: Truitt (Senate Sponsor - Wentworth) H.B. No. 2779
(In the Senate - Received from the House April 29, 2009;
May 1, 2009, read first time and referred to Committee on Business
and Commerce; May 19, 2009, reported adversely, with favorable
Committee Substitute by the following vote: Yeas 9, Nays 0;
May 19, 2009, sent to printer.)
COMMITTEE SUBSTITUTE FOR H.B. No. 2779 By: Van de Putte
A BILL TO BE ENTITLED
AN ACT
relating to the regulation of certain mortgage banker employees who
are residential mortgage loan originators; providing penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 157.001, Finance Code, is amended to
read as follows:
Sec. 157.001. SHORT TITLE. This chapter may be cited as the
Mortgage Banker Registration and Residential Mortgage Loan
Originator License Act.
SECTION 2. Section 157.002, Finance Code, is amended to
read as follows:
Sec. 157.002. DEFINITIONS. In this chapter:
(1) "Commissioner" means the savings and mortgage
lending commissioner.
(2) "Disciplinary action" means any order by the
commissioner that requires one or more of the following:
(A) suspension or revocation of a residential
mortgage loan originator license under this chapter;
(B) probation of a suspension or revocation of a
residential mortgage loan originator license under this chapter on
terms and conditions that the commissioner determines appropriate;
(C) a reprimand of a person with a residential
mortgage loan originator license under this chapter; or
(D) an administrative penalty imposed on a person
holding a residential mortgage loan originator license under this
chapter.
(3) "Finance commission" means the Finance Commission
of Texas.
(4) "Mortgage banker" means a person who:
(A) accepts an application for a residential
mortgage loan or makes a residential mortgage loan; and
(B) is an approved or authorized:
(i) mortgagee with direct endorsement
underwriting authority granted by the United States Department of
Housing and Urban Development;
(ii) seller or servicer of the Federal
National Mortgage Association or the Federal Home Loan Mortgage
Corporation; or
(iii) issuer for the Government National
Mortgage Association.
(5) "Residential mortgage [(3) "Mortgage] loan" means
a debt secured by a [first] lien on residential real property
designed principally for occupancy by one to four families that is
created by a deed of trust, security deed, or other security
instrument.
(6) "Residential mortgage loan originator" has the
meaning assigned by Section 180.002.
SECTION 3. Section 157.003, Finance Code, is amended by
amending Subsections (b), (c), and (d) and adding Subsection (b-1)
to read as follows:
(b) To register under this chapter, a mortgage banker shall
file with the commissioner a statement that contains:
(1) the name and address of the mortgage banker;
(2) the name, address, and telephone number of the
representative of the mortgage banker to be contacted regarding a
written complaint; [and]
(3) a list of the locations in this state at which the
person conducts the business of a mortgage banker; and
(4) a list of employees of the mortgage banker who are
residential mortgage loan originators.
(b-1) The list of mortgage banker employees required by
Subsection (b)(4) must be promptly updated to reflect any changes,
and the updated list must be submitted to the commissioner.
(c) An employee of a mortgage banker who is not a
residential mortgage loan originator is not required to register or
be licensed under this chapter.
(d) Except as provided by Section 157.008(b), the [The]
commissioner may not require a mortgage banker to provide
information other than information contained in the registration
statement.
SECTION 4. Section 157.004, Finance Code, is amended to
read as follows:
Sec. 157.004. EXEMPTIONS. This chapter does not apply to:
(1) a federally insured bank, savings bank, savings
and loan association, Farm Credit System Institution, or credit
union;
(2) a [an affiliate or] subsidiary of a federally
insured bank, savings bank, savings and loan association, Farm
Credit System Institution, or credit union;
(3) a person licensed as a mortgage broker under
Chapter 156; [or]
(4) an authorized lender licensed under Chapter 342;
or
(5) the state or a governmental agency, political
subdivision, or other instrumentality of the state, or an employee
of the state or a governmental agency, political subdivision, or
instrumentality of the state who is acting within the scope of the
person's employment [if:
[(A) the authorized lender includes with an
application for a mortgage loan a notice that is substantially
similar to the notice required by Section 157.007 and provides the
method of submitting complaints to the consumer credit
commissioner;
[(B) the authorized lender uses the forms adopted
by the Finance Commission of Texas under Section 157.011(b); and
[(C) the Finance Commission of Texas determines
by rule that the consumer credit commissioner may suspend or revoke
a license issued under Chapter 342 if the authorized lender engages
in unlawful or unfair practices while making a mortgage loan].
SECTION 5. Section 157.007, Finance Code, is amended to
read as follows:
Sec. 157.007. DISCLOSURE STATEMENT. A mortgage banker
shall include the following notice to a residential mortgage loan
applicant with an application for a residential mortgage loan:
"COMPLAINTS REGARDING MORTGAGE BANKERS SHOULD BE SENT TO THE
DEPARTMENT OF SAVINGS AND MORTGAGE LENDING,
______________________________ (street address of the Department
of Savings and Mortgage Lending). A TOLL-FREE CONSUMER HOTLINE IS
AVAILABLE AT _______________ (telephone number of the Department of
Savings and Mortgage Lending's toll-free consumer hotline)."
SECTION 6. Section 157.009(d), Finance Code, is amended to
read as follows:
(d) The commissioner may revoke the registration of a
mortgage banker after considering a complaint filed under this
chapter if the commissioner concludes that the mortgage banker has
engaged in an intentional course of conduct to violate federal or
state law or has engaged in an intentional course of conduct that
constitutes improper, fraudulent, or dishonest dealings or has
engaged in a negligent course of conduct exhibited through pattern
or practice. The commissioner shall recite the basis of the
decision in an order revoking the registration.
SECTION 7. Section 157.011, Finance Code, is amended by
adding Subsection (c) to read as follows:
(c) The finance commission may adopt rules under this
chapter as required to carry out the intentions of the federal
Secure and Fair Enforcement for Mortgage Licensing Act of 2008
(Pub. L. No. 110-289).
SECTION 8. Chapter 157, Finance Code, is amended by adding
Sections 157.012 through 157.031 to read as follows:
Sec. 157.012. LICENSE REQUIRED FOR CERTAIN EMPLOYEES OF
MORTGAGE BANKERS. (a) An employee of a mortgage banker may not act
in the capacity of a residential mortgage loan originator unless
the employee:
(1) is licensed under this chapter and enrolled with
the Nationwide Mortgage Licensing System and Registry as required
by Section 180.052; and
(2) complies with other applicable requirements of
Chapter 180 and rules adopted by the finance commission under that
chapter.
(b) The finance commission may adopt rules under this
chapter as required to carry out the intentions of the federal
Secure and Fair Enforcement for Mortgage Licensing Act of 2008
(Pub. L. No. 110-289).
(c) To be eligible to be licensed as a residential mortgage
loan originator, an employee of a mortgage banker, in addition to
the requirements of Subsection (a), must:
(1) satisfy the commissioner as to the employee's good
moral character, including the employee's honesty,
trustworthiness, and integrity;
(2) not be in violation of this chapter or a rule
adopted under this chapter; and
(3) provide the commissioner with satisfactory
evidence that the employee meets the qualifications provided by
Chapter 180.
Sec. 157.013. APPLICATION FOR LICENSE; FEES. (a) An
application for a residential mortgage loan originator license must
be:
(1) in writing;
(2) under oath; and
(3) on the form prescribed by the commissioner.
(b) An application for a residential mortgage loan
originator license must be accompanied by an application fee in an
amount determined by the commissioner, not to exceed $500.
(c) An application fee under this section is not refundable
and may not be credited or applied to any other fee or indebtedness
owed by the person paying the fee.
Sec. 157.014. ISSUANCE OF RESIDENTIAL MORTGAGE LOAN
ORIGINATOR LICENSE. (a) The commissioner shall issue a
residential mortgage loan originator license to an applicant if the
commissioner determines that the applicant meets all requirements
and conditions for the license.
(b) Each residential mortgage loan originator license must
have a unique identifier as provided by Chapter 180.
Sec. 157.015. RENEWAL OF LICENSE. (a) A residential
mortgage loan originator license issued under this chapter is valid
for one year and may be renewed on or before its expiration date.
(b) Each residential mortgage loan originator license will
be renewed for not more than a one-year period expiring December 31
of each calendar year.
(c) An application for renewal of a residential mortgage
loan originator license shall meet the requirements of Section
157.013.
(d) An application for renewal of a residential mortgage
loan originator license must meet all of the standards and
qualifications for license renewal under Chapter 180.
(e) The commissioner shall issue a renewal residential
mortgage loan originator license if the commissioner finds that the
applicant meets all of the requirements and conditions for the
license.
(f) The commissioner may deny the renewal application for a
residential mortgage loan originator license for the same reasons
and grounds on which the commissioner could have denied an original
application for a license.
(g) The commissioner may deny the renewal application for a
residential mortgage loan originator license if:
(1) the person seeking the renewal of the residential
mortgage loan originator license is in violation of this chapter or
Chapter 180, an applicable rule adopted under this chapter or
Chapter 180, or any order previously issued to the person by the
commissioner;
(2) the person seeking renewal of the residential
mortgage loan originator license is in default in the payment of any
administrative penalty, fee, charge, or other indebtedness owed
under this title;
(3) the person seeking the renewal of the residential
mortgage loan originator license is in default on a student loan
administered by the Texas Guaranteed Student Loan Corporation,
under Section 57.491, Education Code; or
(4) during the current term of the license, the
commissioner becomes aware of any fact that would have been grounds
for denial of an original license if the fact had been known by the
commissioner on the date the license was granted.
Sec. 157.016. RENEWAL AFTER EXPIRATION OF LICENSE; NOTICE.
(a) A person whose residential mortgage loan originator license
has expired may not engage in activities that require a license
until the license has been renewed.
(b) A person whose residential mortgage loan originator
license has not been renewed before January 1 but who is otherwise
eligible to renew a license, and does so before March 1, may renew
the license by paying the commissioner a reinstatement fee in an
amount that is equal to 150 percent of the required renewal fee.
(c) A person whose residential mortgage loan originator
license has not been renewed before March 1 may not renew the
license. The person may obtain a new license by complying with the
requirements and procedures for obtaining an original license.
(d) Not later than the 60th day before the date a person's
residential mortgage loan originator license is scheduled to
expire, the commissioner or the commissioner's authorized
representative shall send written notice of the impending
expiration to the person at the person's last known address
according to the official licensing records.
Sec. 157.017. DENIAL OF APPLICATIONS AND RENEWALS. (a) If
the commissioner declines or fails to issue or renew a residential
mortgage loan originator license, the commissioner shall promptly
give written notice to the applicant that the application or
renewal, as appropriate, was denied.
(b) Before the applicant or a person requesting the renewal
of a residential mortgage loan originator license may appeal a
determination to a district court as provided by Section
157.026(d), the applicant or person must file with the
commissioner, not later than the 10th day after the date on which
notice under Subsection (a) is received, an appeal of the ruling
requesting a time and place for a hearing before an administrative
law judge designated by the commissioner.
(c) The designated administrative law judge shall set the
time and place for a hearing requested under Subsection (b) not
later than the 90th day after the date on which the appeal is
received. The administrative law judge shall provide at least 10
days' notice of the hearing to the applicant or person requesting
the renewal. The time of the hearing may be continued periodically
with the consent of the applicant or person requesting the renewal.
After the hearing, the commissioner shall enter an order relative
to the applicant based on the findings of fact, conclusions of law,
and recommendations of the administrative law judge.
(d) If an applicant or person requesting the renewal fails
to request a hearing under this section, the commissioner's refusal
to issue or renew a license is final and not subject to review by the
courts.
(e) A hearing held under this section is governed by Chapter
2001, Government Code. An appeal of a final order issued under this
section may be made in accordance with Section 157.026(d).
(f) A person who requests a hearing under this section shall
be required to pay a deposit to secure the payment of the costs of
the hearing in an amount to be determined by the commissioner not to
exceed $500. The entire deposit shall be refunded to the person if
the person prevails in the contested case hearing. If the person
does not prevail, any portion of the deposit in excess of the costs
of the hearing assessed against that person shall be refunded.
(g) A person whose application for a license has been denied
is not eligible to be licensed for a period of two years after the
date the denial becomes final, or a shorter period determined by the
commissioner after evaluating the specific circumstances of the
person's subsequent application. The finance commission may adopt
rules to provide conditions for which the commissioner may shorten
the time for eligibility for a new license.
Sec. 157.018. PROBATIONARY AND PROVISIONAL LICENSES.
(a) The commissioner may issue probationary and provisional
licenses.
(b) The finance commission by rule shall adopt reasonable
terms and conditions for probationary and provisional licenses.
Sec. 157.019. MODIFICATION OF LICENSE. (a) Before the 10th
day preceding the effective date of an address change, a mortgage
banker employee who is a residential mortgage loan originator shall
notify the commissioner or authorized designee in writing of the
new address.
(b) A person licensed under this chapter must notify the
commissioner or the commissioner's authorized designee not later
than the 10th day after the date of any change in the person's name
for the issuance of an amended license.
Sec. 157.020. ANNUAL CALL REPORT. (a) Each mortgage
banker shall file an annual call report with the commissioner or the
commissioner's authorized designee on a form prescribed by the
commissioner or authorized designee. The report is a statement of
condition of the mortgage banker and the mortgage banker's
operations, including financial statements and production activity
volumes.
(b) The information contained in the call report related to
residential mortgage loan origination volume or other trade
information is confidential and may not be disclosed by the
commissioner or authorized designee.
Sec. 157.021. INSPECTION; INVESTIGATIONS. (a) The
commissioner may conduct an inspection of a person licensed as a
residential mortgage loan originator as the commissioner
determines necessary to determine whether the person is complying
with this chapter, Chapter 180, and applicable rules. An
inspection under this subsection may include inspection of the
books, records, documents, operations, and facilities of the
person. The commissioner may request the assistance and
cooperation of the mortgage banker in providing needed documents
and records. The commissioner may not make a request of the
mortgage banker for documents and records unrelated to the person
being investigated or inspected. The commissioner may share
evidence of criminal activity gathered during an inspection or
investigation with any state or federal law enforcement agency.
(b) On the signed written complaint of a person, the
commissioner shall investigate the actions and records of a person
licensed as a residential mortgage loan originator if the
complaint, or the complaint and documentary or other evidence
presented in connection with the complaint, provides a reasonable
cause. Before commencing an investigation, the commissioner must
notify the licensed residential mortgage loan originator in writing
of the complaint and that the commissioner intends to investigate
the matter.
(c) For reasonable cause, the commissioner at any time may
investigate a person licensed as a residential mortgage loan
originator to determine whether the person is complying with this
chapter, Chapter 180, and applicable rules.
(d) The commissioner may conduct an undercover or covert
investigation only if the commissioner, after due consideration of
the circumstances, determines that the investigation is necessary
to prevent immediate harm and to carry out the purposes of this
chapter.
(e) The finance commission by rule shall provide guidelines
to govern an inspection or investigation, including rules to:
(1) determine the information and records of the
licensed residential mortgage loan originator to which the
commissioner may demand access during an inspection or an
investigation; and
(2) establish what constitutes reasonable cause for an
investigation.
(f) Information obtained by the commissioner during an
inspection or an investigation is confidential unless disclosure of
the information is permitted or required by other law.
(g) The commissioner may share information gathered during
an investigation or inspection with any state or federal agency
only if the commissioner determines there is a valid reason for the
sharing.
Sec. 157.022. ISSUANCE AND ENFORCEMENT OF SUBPOENA. (a)
During an investigation, the commissioner may issue a subpoena that
is addressed to a peace officer of this state or other person
authorized by law to serve citation or perfect service. The
subpoena may require a person to give a deposition, produce
documents, or both.
(b) If a person disobeys a subpoena or if a person appearing
in a deposition in connection with the investigation refuses to
testify, the commissioner may petition a district court in Travis
County to issue an order requiring the person to obey the subpoena,
testify, or produce documents relating to the matter. The court
shall promptly set an application to enforce a subpoena issued
under Subsection (a) for hearing and shall cause notice of the
application and the hearing to be served on the person to whom the
subpoena is directed.
Sec. 157.023. ADMINISTRATIVE PENALTY. (a) The
commissioner, after notice and opportunity for a hearing, may
impose an administrative penalty on a person licensed as a
residential mortgage loan originator under this chapter who
violates this chapter or a rule or order adopted under this chapter.
(b) The amount of the penalty may not exceed $2,500, and
each day a violation continues or occurs is a separate violation for
the purpose of imposing a penalty. The amount shall be based on:
(1) the seriousness of the violation, including the
nature, circumstances, extent, and gravity of the violation;
(2) the history of previous violations;
(3) the amount necessary to deter a future violation;
(4) efforts to correct the violation; and
(5) any other matter that justice may require.
(c) The enforcement of the penalty may be stayed during the
time the order is under judicial review if the person pays the
penalty to the clerk of the court or files a supersedeas bond with
the court in the amount of the penalty. A person who cannot afford
to pay the penalty or file the bond may stay the enforcement by
filing an affidavit in the manner required by the Texas Rules of
Civil Procedure for a party who cannot afford to file security for
costs, subject to the right of the commissioner to contest the
affidavit as provided by those rules.
(d) The attorney general may sue to collect the penalty.
(e) An appeal of an administrative penalty under this
section is considered to be a contested case under Chapter 2001,
Government Code.
Sec. 157.024. DISCIPLINARY ACTION; CEASE AND DESIST ORDER.
(a) The commissioner may order disciplinary action against a
licensed residential mortgage loan originator when the
commissioner, after notice and opportunity for a hearing, has
determined that the person:
(1) obtained a license, including a renewal of a
license, under this chapter through a false or fraudulent
representation or made a material misrepresentation in an
application for a license or for the renewal of a license under this
chapter;
(2) published or caused to be published an
advertisement related to the business of a residential mortgage
loan originator that:
(A) was misleading;
(B) was likely to deceive the public;
(C) in any manner tended to create a misleading
impression;
(D) failed to identify as a licensed residential
mortgage loan originator the person causing the advertisement to be
published; or
(E) violated federal or state law;
(3) while performing an act for which a license under
this chapter is required, engaged in conduct that constitutes
improper, fraudulent, or dishonest dealings;
(4) entered a plea of nolo contendere to or was
convicted of a criminal offense that is a felony or that involves
fraud or moral turpitude in a court of this or another state or in a
federal court;
(5) failed to use a fee collected in advance of closing
a residential mortgage loan for a purpose for which the fee was
paid;
(6) failed within a reasonable time to honor a check
issued to the commissioner after the commissioner mailed a request
for payment by mail to the person's last known business address as
reflected in the commissioner's records;
(7) induced or attempted to induce a party to a
contract to breach the contract so the person could make a
residential mortgage loan;
(8) published or circulated an unjustified or
unwarranted threat of legal proceedings in matters related to the
person's actions or services as a licensed residential mortgage
loan originator;
(9) aided, abetted, or conspired with a person to
circumvent the requirements of this chapter;
(10) acted in the dual capacity of a licensed
residential mortgage loan originator and real estate broker,
salesperson, or attorney in a transaction without the knowledge and
written consent of the mortgage applicant or in violation of
applicable requirements under federal law;
(11) discriminated against a prospective borrower on
the basis of race, color, religion, sex, national origin, ancestry,
familial status, or disability;
(12) failed or refused on demand to:
(A) produce a document, book, or record
concerning a residential mortgage loan transaction conducted by the
licensed residential mortgage loan originator for inspection by the
commissioner or the commissioner's authorized personnel or
representative;
(B) give the commissioner or the commissioner's
authorized personnel or representative free access to the books or
records relating to the residential mortgage loan originator's
business kept by any other person or any business entity through
which the residential mortgage loan originator conducts
residential mortgage loan origination activities; or
(C) provide information requested by the
commissioner as a result of a formal or informal complaint made to
the commissioner;
(13) failed without just cause to surrender, on
demand, a copy of a document or other instrument coming into the
residential mortgage loan originator's possession that was
provided to the residential mortgage loan originator by another
person making the demand or that the person making the demand is
under law entitled to receive;
(14) disregarded or violated this chapter, a rule
adopted under this chapter, or an order issued by the commissioner
under this chapter;
(15) provided false information to the commissioner
during the course of an investigation or inspection;
(16) paid compensation to a person who is not licensed
or exempt under this chapter for acts for which a license under this
chapter is required; or
(17) established an association, by employment or
otherwise, with a person not licensed or exempt under this chapter
who was expected or required to act as a residential mortgage loan
originator.
(b) The commissioner may also order disciplinary action
against a licensed residential mortgage loan originator, after
notice and opportunity for a hearing, if the commissioner, during
the current term of the license, becomes aware of any fact that
would have been grounds for denial of an original license if the
fact had been known by the commissioner on the date the license was
granted.
(c) In addition to disciplinary action by the commissioner
authorized under Subsections (a) and (b), the commissioner, if the
commissioner has reasonable cause to believe that a licensed
residential mortgage loan originator has violated or is about to
violate this section, may issue without notice and hearing an order
to cease and desist continuing a particular action or an order to
take affirmative action, or both, to enforce compliance with this
chapter.
(d) An order issued under Subsection (c) must contain a
reasonably detailed statement of the facts on which the order is
made. If a residential mortgage loan originator against whom the
order is made requests a hearing, the commissioner shall set and
give notice of a hearing before the commissioner or an
administrative law judge. The hearing shall be governed by Chapter
2001, Government Code. Based on the findings of fact, conclusions
of law, and recommendations of the administrative law judge, the
commissioner by order may find that a violation has occurred or not
occurred.
(e) If a hearing is not requested under Subsection (d) not
later than the 30th day after the date on which an order is made, the
order is considered final and not appealable.
(f) The commissioner, after giving notice, may impose
against a residential mortgage loan originator who violates a cease
and desist order an administrative penalty in an amount not to
exceed $1,000 for each day of the violation. In addition to any
other remedy provided by law, the commissioner may institute in
district court a suit for injunctive relief and to collect the
administrative penalty. A bond is not required of the commissioner
with respect to injunctive relief granted under this subsection.
(g) For purposes of Subsection (a), a residential mortgage
loan originator is considered convicted if a sentence is imposed on
that person, that person receives community supervision, including
deferred adjudication community supervision, or the court defers
final disposition of that person's case.
(h) If a residential mortgage loan originator fails to pay
an administrative penalty that has become final or fails to comply
with an order of the commissioner that has become final, in addition
to any other remedy provided under law, the commissioner, on not
less than 10 days' notice to the residential mortgage loan
originator, may without a prior hearing suspend the residential
mortgage loan originator's license. The suspension continues until
the residential mortgage loan originator has complied with the
administrative order or paid the administrative penalty. During
the period of suspension, the residential mortgage loan originator
may not originate a residential mortgage loan, as defined by
Section 180.002.
(i) An order of suspension under Subsection (h) may be
appealed. An appeal is a contested case governed by Chapter 2001,
Government Code. A hearing of an appeal of an order of suspension
issued under Subsection (h) shall be held not later than the 15th
day after the date of receipt of the notice of appeal. The
appellant shall be provided at least three days' notice of the time
and place of the hearing.
(j) An order revoking the license of a residential mortgage
loan originator may provide that the person is prohibited, without
previously obtaining written consent of the commissioner, from:
(1) engaging in the business of originating or making
residential mortgage loans, as defined by Section 180.002;
(2) otherwise affiliating with a person for the
purpose of engaging in the business of originating or making
residential mortgage loans, as defined by Section 180.002; and
(3) being an employee, officer, director, manager,
shareholder, member, agent, contractor, or processor of a mortgage
banker, mortgage broker, or mortgage broker loan officer.
(k) On notice and opportunity for a hearing, the
commissioner may suspend the license of a residential mortgage loan
originator under this chapter if an indictment or information is
filed or returned alleging that the person committed a criminal
offense involving fraud, theft, or dishonesty. The suspension
continues until the criminal case is dismissed or the person is
acquitted.
Sec. 157.025. RESTITUTION. The commissioner may order a
residential mortgage loan originator to make restitution for any
amount received by that person in violation of this chapter.
Sec. 157.026. HEARINGS AND JUDICIAL REVIEW. (a) The
commissioner may employ an enforcement staff to investigate and
prosecute complaints made against residential mortgage loan
originators licensed under this chapter. The commissioner may
employ an administrative law judge to conduct hearings under this
section. The commissioner may collect and deposit any court costs
assessed under a final order.
(b) If the commissioner proposes to suspend or revoke a
license of a residential mortgage loan originator or if the
commissioner refuses to issue or renew a license to an applicant for
a residential mortgage loan originator license or person requesting
a renewal of a residential mortgage loan originator license under
this chapter, the applicant or license holder is entitled to a
hearing before the commissioner or an administrative law judge who
shall make a proposal for decision to the commissioner. The
commissioner or administrative law judge shall prescribe the time
and place of the hearing. The hearing is governed by Chapter 2001,
Government Code.
(c) The commissioner or administrative law judge may issue
subpoenas for the attendance of witnesses and the production of
records or documents. Process issued by the commissioner or the
administrative law judge may extend to all parts of the state and
may be served by any person designated by the commissioner or
administrative law judge.
(d) An individual aggrieved by a ruling, order, or decision
of the commissioner has the right to appeal to a district court in
the county in which the hearing was held. An appeal under this
subsection is governed by Chapter 2001, Government Code.
Sec. 157.027. CIVIL ACTIONS AND INJUNCTIVE RELIEF. (a) A
residential mortgage loan applicant injured by a violation of this
chapter by a residential mortgage loan originator may bring an
action for recovery of actual monetary damages and reasonable
attorney's fees and court costs.
(b) The commissioner, the attorney general, or a
residential mortgage loan applicant may bring an action to enjoin a
violation of this chapter by a residential mortgage loan
originator.
(c) A remedy provided by this section is in addition to any
other remedy provided by law.
Sec. 157.028. BURDEN OF PROOF TO ESTABLISH AN EXEMPTION.
The burden of proving an exemption in a proceeding or action brought
under this chapter is on the person claiming the benefit of the
exemption.
Sec. 157.029. RELIANCE ON WRITTEN NOTICES FROM THE
COMMISSIONER. A person does not violate this chapter with respect
to an action taken or omission made in reliance on a written notice,
written interpretation, or written report from the commissioner
unless a subsequent amendment to this chapter or a rule adopted
under this chapter affects the commissioner's notice,
interpretation, or report.
Sec. 157.030. COMPLETION OF RESIDENTIAL MORTGAGE
ORIGINATION SERVICES. (a) On disbursement of mortgage proceeds to
or on behalf of the residential mortgage loan applicant, the
residential mortgage loan originator who assisted the applicant in
obtaining the residential mortgage loan is considered to have
completed the performance of the loan originator's services for the
applicant and owes no additional duties or obligations to the
applicant with respect to the loan.
(b) This section does not limit or preclude the liability of
a residential mortgage loan originator for:
(1) failing to comply with this chapter or a rule
adopted under this chapter;
(2) failing to comply with a provision of or duty
arising under an agreement with a residential mortgage loan
applicant under this chapter; or
(3) violating any other state or federal law.
Sec. 157.031. UNLICENSED ACTIVITY; OFFENSE. (a) A person
commits an offense if the person is an employee of a mortgage
banker, is not exempt under this chapter, and acts as a residential
mortgage loan originator without first obtaining a license required
under this chapter. An offense under this subsection is a Class B
misdemeanor. A second or subsequent conviction for an offense
under this subsection is a Class A misdemeanor.
(b) If the commissioner has reasonable cause to believe that
a person who is not licensed or exempt under this chapter has
engaged, or is about to engage, in an act or practice for which a
license is required under this chapter, the commissioner may issue,
without notice and hearing, an order to cease and desist from
continuing a particular action or an order to take affirmative
action, or both, to enforce compliance with this chapter. The order
must contain a reasonably detailed statement of the facts on which
the order is made. The order may assess an administrative penalty
in an amount not to exceed $1,000 per day for each violation and may
require a person to pay to a residential mortgage loan applicant any
compensation received by the person from the applicant in violation
of this chapter. If a person against whom the order is made
requests a hearing, the commissioner shall set and give notice of a
hearing before the commissioner or an administrative law judge.
The hearing shall be governed by Chapter 2001, Government Code. An
order under this subsection becomes final unless the person to whom
the order is issued requests a hearing not later than the 30th day
after the date the order is issued.
(c) If a hearing has not been requested under Subsection (b)
not later than the 30th day after the date the order is made, the
order is considered final and not appealable. The commissioner,
after giving notice, may impose against a person who violates a
cease and desist order, an administrative penalty in an amount not
to exceed $1,000 for each day of a violation. In addition to any
other remedy provided by law, the commissioner may institute in
district court a suit for injunctive relief and to collect the
administrative penalty. A bond is not required of the commissioner
with respect to injunctive relief granted under this section.
SECTION 9. The heading to Section 341.103, Finance Code, is
amended to read as follows:
Sec. 341.103. REGULATION OF SAVINGS INSTITUTIONS, [AND]
LICENSED MORTGAGE BROKERS AND LOAN OFFICERS, AND REGISTERED
MORTGAGE BANKERS AND LICENSED LOAN OFFICERS.
SECTION 10. Section 341.103(a), Finance Code, is amended to
read as follows:
(a) The savings and mortgage lending commissioner shall
enforce this subtitle relating to the regulation of:
(1) state savings associations operating under this
subtitle;
(2) state savings banks operating under this subtitle;
[and]
(3) persons licensed under Chapter 156; and
(4) persons registered or licensed under Chapter 157.
SECTION 11. An individual is not required to comply with
Section 157.012, Finance Code, as added by this Act, until the later
of:
(1) July 31, 2010; or
(2) a subsequent date that is approved by the
secretary of the United States Department of Housing and Urban
Development under the authority granted under the federal Secure
and Fair Enforcement for Mortgage Licensing Act of 2008 (Pub. L. No.
110-289).
SECTION 12. This Act takes effect only if House Bill 10 or
another similar bill of the Regular Session of the 81st Legislature
relating to the licensing of residential mortgage loan originators
is enacted and becomes law. If House Bill 10 or another similar
bill of the Regular Session of the 81st Legislature relating to the
licensing of residential mortgage loan originators does not become
law, this Act does not take effect.
SECTION 13. Except as provided by Section 12 of this Act,
this Act takes effect April 1, 2010.
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