Texas 2009 - 81st Regular

Texas House Bill HB2779 Compare Versions

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1	1	H.B. No. 2779
2	2
3	3
4	4	AN ACT
5	5	relating to the regulation of certain mortgage banker employees who
6	6	are residential mortgage loan originators; providing penalties.
7	7	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
8	8	SECTION 1. Section 157.001, Finance Code, is amended to
9	9	read as follows:
10	10	Sec. 157.001. SHORT TITLE. This chapter may be cited as the
11	11	Mortgage Banker Registration and Residential Mortgage Loan
12	12	Originator License Act.
13	13	SECTION 2. Section 157.002, Finance Code, is amended to
14	14	read as follows:
15	15	Sec. 157.002. DEFINITIONS. In this chapter:
16	16	(1) "Commissioner" means the savings and mortgage
17	17	lending commissioner.
18	18	(2) "Disciplinary action" means any order by the
19	19	commissioner that requires one or more of the following:
20	20	(A) suspension or revocation of a residential
21	21	mortgage loan originator license under this chapter;
22	22	(B) probation of a suspension or revocation of a
23	23	residential mortgage loan originator license under this chapter on
24	24	terms and conditions that the commissioner determines appropriate;
25	25	(C) a reprimand of a person with a residential
26	26	mortgage loan originator license under this chapter; or
27	27	(D) an administrative penalty imposed on a person
28	28	holding a residential mortgage loan originator license under this
29	29	chapter.
30	30	(3) "Finance commission" means the Finance Commission
31	31	of Texas.
32	32	(4) "Mortgage banker" means a person who:
33	33	(A) accepts an application for a residential
34	34	mortgage loan or makes a residential mortgage loan; and
35	35	(B) is an approved or authorized:
36	36	(i) mortgagee with direct endorsement
37	37	underwriting authority granted by the United States Department of
38	38	Housing and Urban Development;
39	39	(ii) seller or servicer of the Federal
40	40	National Mortgage Association or the Federal Home Loan Mortgage
41	41	Corporation; or
42	42	(iii) issuer for the Government National
43	43	Mortgage Association.
44	44	(5) "Residential mortgage [(3) "Mortgage] loan" means
45	45	a debt secured by a [first] lien on residential real property
46	46	designed principally for occupancy by one to four families that is
47	47	created by a deed of trust, security deed, or other security
48	48	instrument.
49	49	(6) "Residential mortgage loan originator" has the
50	50	meaning assigned by Section 180.002.
51	51	SECTION 3. Section 157.003, Finance Code, is amended by
52	52	amending Subsections (b), (c), and (d) and adding Subsection (b-1)
53	53	to read as follows:
54	54	(b) To register under this chapter, a mortgage banker shall
55	55	file with the commissioner a statement that contains:
56	56	(1) the name and address of the mortgage banker;
57	57	(2) the name, address, and telephone number of the
58	58	representative of the mortgage banker to be contacted regarding a
59	59	written complaint; [and]
60	60	(3) a list of the locations in this state at which the
61	61	person conducts the business of a mortgage banker; and
62	62	(4) a list of employees of the mortgage banker who are
63	63	residential mortgage loan originators.
64	64	(b-1) The list of mortgage banker employees required by
65	65	Subsection (b)(4) must be promptly updated to reflect any changes,
66	66	and the updated list must be submitted to the commissioner.
67	67	(c) An employee of a mortgage banker who is not a
68	68	residential mortgage loan originator is not required to register or
69	69	be licensed under this chapter.
70	70	(d) Except as provided by Section 157.008(b), the [The]
71	71	commissioner may not require a mortgage banker to provide
72	72	information other than information contained in the registration
73	73	statement.
74	74	SECTION 4. Section 157.004, Finance Code, is amended to
75	75	read as follows:
76	76	Sec. 157.004. EXEMPTIONS. This chapter does not apply to:
77	77	(1) a federally insured bank, savings bank, savings
78	78	and loan association, Farm Credit System Institution, or credit
79	79	union;
80	80	(2) a [an affiliate or] subsidiary of a federally
81	81	insured bank, savings bank, savings and loan association, Farm
82	82	Credit System Institution, or credit union;
83	83	(3) a person licensed as a mortgage broker under
84	84	Chapter 156; [or]
85	85	(4) an authorized lender licensed under Chapter 342;
86	86	or
87	87	(5) the state or a governmental agency, political
88	88	subdivision, or other instrumentality of the state, or an employee
89	89	of the state or a governmental agency, political subdivision, or
90	90	instrumentality of the state who is acting within the scope of the
91	91	person's employment [if:
92	92	[(A) the authorized lender includes with an
93	93	application for a mortgage loan a notice that is substantially
94	94	similar to the notice required by Section 157.007 and provides the
95	95	method of submitting complaints to the consumer credit
96	96	commissioner;
97	97	[(B) the authorized lender uses the forms adopted
98	98	by the Finance Commission of Texas under Section 157.011(b); and
99	99	[(C) the Finance Commission of Texas determines
100	100	by rule that the consumer credit commissioner may suspend or revoke
101	101	a license issued under Chapter 342 if the authorized lender engages
102	102	in unlawful or unfair practices while making a mortgage loan].
103	103	SECTION 5. Section 157.007, Finance Code, is amended to
104	104	read as follows:
105	105	Sec. 157.007. DISCLOSURE STATEMENT. A mortgage banker
106	106	shall include the following notice to a residential mortgage loan
107	107	applicant with an application for a residential mortgage loan:
108	108	"COMPLAINTS REGARDING MORTGAGE BANKERS SHOULD BE SENT TO THE
109	109	DEPARTMENT OF SAVINGS AND MORTGAGE LENDING,
110	110	______________________________ (street address of the Department
111	111	of Savings and Mortgage Lending). A TOLL-FREE CONSUMER HOTLINE IS
112	112	AVAILABLE AT _______________ (telephone number of the Department of
113	113	Savings and Mortgage Lending's toll-free consumer hotline)."
114	114	SECTION 6. Section 157.009(d), Finance Code, is amended to
115	115	read as follows:
116	116	(d) The commissioner may revoke the registration of a
117	117	mortgage banker after considering a complaint filed under this
118	118	chapter if the commissioner concludes that the mortgage banker has
119	119	engaged in an intentional course of conduct to violate federal or
120	120	state law or has engaged in an intentional course of conduct that
121	121	constitutes improper, fraudulent, or dishonest dealings or has
122	122	engaged in a negligent course of conduct exhibited through pattern
123	123	or practice. The commissioner shall recite the basis of the
124	124	decision in an order revoking the registration.
125	125	SECTION 7. Section 157.011, Finance Code, is amended by
126	126	adding Subsection (c) to read as follows:
127	127	(c) The finance commission may adopt rules under this
128	128	chapter as required to carry out the intentions of the federal
129	129	Secure and Fair Enforcement for Mortgage Licensing Act of 2008
130	130	(Pub. L. No. 110-289).
131	131	SECTION 8. Chapter 157, Finance Code, is amended by adding
132	132	Sections 157.012 through 157.031 to read as follows:
133	133	Sec. 157.012. LICENSE REQUIRED FOR CERTAIN EMPLOYEES OF
134	134	MORTGAGE BANKERS. (a) An employee of a mortgage banker may not act
135	135	in the capacity of a residential mortgage loan originator unless
136	136	the employee:
137	137	(1) is licensed under this chapter and enrolled with
138	138	the Nationwide Mortgage Licensing System and Registry as required
139	139	by Section 180.052; and
140	140	(2) complies with other applicable requirements of
141	141	Chapter 180 and rules adopted by the finance commission under that
142	142	chapter.
143	143	(b) The finance commission may adopt rules under this
144	144	chapter as required to carry out the intentions of the federal
145	145	Secure and Fair Enforcement for Mortgage Licensing Act of 2008
146	146	(Pub. L. No. 110-289).
147	147	(c) To be eligible to be licensed as a residential mortgage
148	148	loan originator, an employee of a mortgage banker, in addition to
149	149	the requirements of Subsection (a), must:
150	150	(1) satisfy the commissioner as to the employee's good
151	151	moral character, including the employee's honesty,
152	152	trustworthiness, and integrity;
153	153	(2) not be in violation of this chapter or a rule
154	154	adopted under this chapter; and
155	155	(3) provide the commissioner with satisfactory
156	156	evidence that the employee meets the qualifications provided by
157	157	Chapter 180.
158	158	Sec. 157.013. APPLICATION FOR LICENSE; FEES. (a) An
159	159	application for a residential mortgage loan originator license must
160	160	be:
161	161	(1) in writing;
162	162	(2) under oath; and
163	163	(3) on the form prescribed by the commissioner.
164	164	(b) An application for a residential mortgage loan
165	165	originator license must be accompanied by an application fee in an
166	166	amount determined by the commissioner, not to exceed $500.
167	167	(c) An application fee under this section is not refundable
168	168	and may not be credited or applied to any other fee or indebtedness
169	169	owed by the person paying the fee.
170	170	Sec. 157.014. ISSUANCE OF RESIDENTIAL MORTGAGE LOAN
171	171	ORIGINATOR LICENSE. (a) The commissioner shall issue a
172	172	residential mortgage loan originator license to an applicant if the
173	173	commissioner determines that the applicant meets all requirements
174	174	and conditions for the license.
175	175	(b) Each residential mortgage loan originator license must
176	176	have a unique identifier as provided by Chapter 180.
177	177	Sec. 157.015. RENEWAL OF LICENSE. (a) A residential
178	178	mortgage loan originator license issued under this chapter is valid
179	179	for one year and may be renewed on or before its expiration date.
180	180	(b) Each residential mortgage loan originator license will
181	181	be renewed for not more than a one-year period expiring December 31
182	182	of each calendar year.
183	183	(c) An application for renewal of a residential mortgage
184	184	loan originator license shall meet the requirements of Section
185	185	157.013.
186	186	(d) An application for renewal of a residential mortgage
187	187	loan originator license must meet all of the standards and
188	188	qualifications for license renewal under Chapter 180.
189	189	(e) The commissioner shall issue a renewal residential
190	190	mortgage loan originator license if the commissioner finds that the
191	191	applicant meets all of the requirements and conditions for the
192	192	license.
193	193	(f) The commissioner may deny the renewal application for a
194	194	residential mortgage loan originator license for the same reasons
195	195	and grounds on which the commissioner could have denied an original
196	196	application for a license.
197	197	(g) The commissioner may deny the renewal application for a
198	198	residential mortgage loan originator license if:
199	199	(1) the person seeking the renewal of the residential
200	200	mortgage loan originator license is in violation of this chapter or
201	201	Chapter 180, an applicable rule adopted under this chapter or
202	202	Chapter 180, or any order previously issued to the person by the
203	203	commissioner;
204	204	(2) the person seeking renewal of the residential
205	205	mortgage loan originator license is in default in the payment of any
206	206	administrative penalty, fee, charge, or other indebtedness owed
207	207	under this title;
208	208	(3) the person seeking the renewal of the residential
209	209	mortgage loan originator license is in default on a student loan
210	210	administered by the Texas Guaranteed Student Loan Corporation,
211	211	under Section 57.491, Education Code; or
212	212	(4) during the current term of the license, the
213	213	commissioner becomes aware of any fact that would have been grounds
214	214	for denial of an original license if the fact had been known by the
215	215	commissioner on the date the license was granted.
216	216	Sec. 157.016. RENEWAL AFTER EXPIRATION OF LICENSE; NOTICE.
217	217	(a) A person whose residential mortgage loan originator license
218	218	has expired may not engage in activities that require a license
219	219	until the license has been renewed.
220	220	(b) A person whose residential mortgage loan originator
221	221	license has not been renewed before January 1 but who is otherwise
222	222	eligible to renew a license, and does so before March 1, may renew
223	223	the license by paying the commissioner a reinstatement fee in an
224	224	amount that is equal to 150 percent of the required renewal fee.
225	225	(c) A person whose residential mortgage loan originator
226	226	license has not been renewed before March 1 may not renew the
227	227	license. The person may obtain a new license by complying with the
228	228	requirements and procedures for obtaining an original license.
229	229	(d) Not later than the 60th day before the date a person's
230	230	residential mortgage loan originator license is scheduled to
231	231	expire, the commissioner or the commissioner's authorized
232	232	representative shall send written notice of the impending
233	233	expiration to the person at the person's last known address
234	234	according to the official licensing records.
235	235	Sec. 157.017. DENIAL OF APPLICATIONS AND RENEWALS. (a) If
236	236	the commissioner declines or fails to issue or renew a residential
237	237	mortgage loan originator license, the commissioner shall promptly
238	238	give written notice to the applicant that the application or
239	239	renewal, as appropriate, was denied.
240	240	(b) Before the applicant or a person requesting the renewal
241	241	of a residential mortgage loan originator license may appeal a
242	242	determination to a district court as provided by Section
243	243	157.026(d), the applicant or person must file with the
244	244	commissioner, not later than the 10th day after the date on which
245	245	notice under Subsection (a) is received, an appeal of the ruling
246	246	requesting a time and place for a hearing before an administrative
247	247	law judge designated by the commissioner.
248	248	(c) The designated administrative law judge shall set the
249	249	time and place for a hearing requested under Subsection (b) not
250	250	later than the 90th day after the date on which the appeal is
251	251	received. The administrative law judge shall provide at least 10
252	252	days' notice of the hearing to the applicant or person requesting
253	253	the renewal. The time of the hearing may be continued periodically
254	254	with the consent of the applicant or person requesting the renewal.
255	255	After the hearing, the commissioner shall enter an order relative
256	256	to the applicant based on the findings of fact, conclusions of law,
257	257	and recommendations of the administrative law judge.
258	258	(d) If an applicant or person requesting the renewal fails
259	259	to request a hearing under this section, the commissioner's refusal
260	260	to issue or renew a license is final and not subject to review by the
261	261	courts.
262	262	(e) A hearing held under this section is governed by Chapter
263	263	2001, Government Code. An appeal of a final order issued under this
264	264	section may be made in accordance with Section 157.026(d).
265	265	(f) A person who requests a hearing under this section shall
266	266	be required to pay a deposit to secure the payment of the costs of
267	267	the hearing in an amount to be determined by the commissioner not to
268	268	exceed $500. The entire deposit shall be refunded to the person if
269	269	the person prevails in the contested case hearing. If the person
270	270	does not prevail, any portion of the deposit in excess of the costs
271	271	of the hearing assessed against that person shall be refunded.
272	272	(g) A person whose application for a license has been denied
273	273	is not eligible to be licensed for a period of two years after the
274	274	date the denial becomes final, or a shorter period determined by the
275	275	commissioner after evaluating the specific circumstances of the
276	276	person's subsequent application. The finance commission may adopt
277	277	rules to provide conditions for which the commissioner may shorten
278	278	the time for eligibility for a new license.
279	279	Sec. 157.018. PROBATIONARY AND PROVISIONAL LICENSES. (a)
280	280	The commissioner may issue probationary and provisional licenses.
281	281	(b) The finance commission by rule shall adopt reasonable
282	282	terms and conditions for probationary and provisional licenses.
283	283	Sec. 157.019. MODIFICATION OF LICENSE. (a) Before the 10th
284	284	day preceding the effective date of an address change, a mortgage
285	285	banker employee who is a residential mortgage loan originator shall
286	286	notify the commissioner or authorized designee in writing of the
287	287	new address.
288	288	(b) A person licensed under this chapter must notify the
289	289	commissioner or the commissioner's authorized designee not later
290	290	than the 10th day after the date of any change in the person's name
291	291	for the issuance of an amended license.
292	292	Sec. 157.020. ANNUAL CALL REPORT. (a) Each mortgage banker
293	293	shall file an annual call report with the commissioner or the
294	294	commissioner's authorized designee on a form prescribed by the
295	295	commissioner or authorized designee. The report is a statement of
296	296	condition of the mortgage banker and the mortgage banker's
297	297	operations, including financial statements and production activity
298	298	volumes.
299	299	(b) The information contained in the call report related to
300	300	residential mortgage loan origination volume or other trade
301	301	information is confidential and may not be disclosed by the
302	302	commissioner or authorized designee.
303	303	Sec. 157.021. INSPECTION; INVESTIGATIONS. (a) The
304	304	commissioner may conduct an inspection of a person licensed as a
305	305	residential mortgage loan originator as the commissioner
306	306	determines necessary to determine whether the person is complying
307	307	with this chapter, Chapter 180, and applicable rules. An
308	308	inspection under this subsection may include inspection of the
309	309	books, records, documents, operations, and facilities of the
310	310	person. The commissioner may request the assistance and
311	311	cooperation of the mortgage banker in providing needed documents
312	312	and records. The commissioner may not make a request of the
313	313	mortgage banker for documents and records unrelated to the person
314	314	being investigated or inspected. The commissioner may share
315	315	evidence of criminal activity gathered during an inspection or
316	316	investigation with any state or federal law enforcement agency.
317	317	(b) On the signed written complaint of a person, the
318	318	commissioner shall investigate the actions and records of a person
319	319	licensed as a residential mortgage loan originator if the
320	320	complaint, or the complaint and documentary or other evidence
321	321	presented in connection with the complaint, provides a reasonable
322	322	cause. Before commencing an investigation, the commissioner must
323	323	notify the licensed residential mortgage loan originator in writing
324	324	of the complaint and that the commissioner intends to investigate
325	325	the matter.
326	326	(c) For reasonable cause, the commissioner at any time may
327	327	investigate a person licensed as a residential mortgage loan
328	328	originator to determine whether the person is complying with this
329	329	chapter, Chapter 180, and applicable rules.
330	330	(d) The commissioner may conduct an undercover or covert
331	331	investigation only if the commissioner, after due consideration of
332	332	the circumstances, determines that the investigation is necessary
333	333	to prevent immediate harm and to carry out the purposes of this
334	334	chapter.
335	335	(e) The finance commission by rule shall provide guidelines
336	336	to govern an inspection or investigation, including rules to:
337	337	(1) determine the information and records of the
338	338	licensed residential mortgage loan originator to which the
339	339	commissioner may demand access during an inspection or an
340	340	investigation; and
341	341	(2) establish what constitutes reasonable cause for an
342	342	investigation.
343	343	(f) Information obtained by the commissioner during an
344	344	inspection or an investigation is confidential unless disclosure of
345	345	the information is permitted or required by other law.
346	346	(g) The commissioner may share information gathered during
347	347	an investigation or inspection with any state or federal agency
348	348	only if the commissioner determines there is a valid reason for the
349	349	sharing.
350	350	Sec. 157.022. ISSUANCE AND ENFORCEMENT OF SUBPOENA. (a)
351	351	During an investigation, the commissioner may issue a subpoena that
352	352	is addressed to a peace officer of this state or other person
353	353	authorized by law to serve citation or perfect service. The
354	354	subpoena may require a person to give a deposition, produce
355	355	documents, or both.
356	356	(b) If a person disobeys a subpoena or if a person appearing
357	357	in a deposition in connection with the investigation refuses to
358	358	testify, the commissioner may petition a district court in Travis
359	359	County to issue an order requiring the person to obey the subpoena,
360	360	testify, or produce documents relating to the matter. The court
361	361	shall promptly set an application to enforce a subpoena issued
362	362	under Subsection (a) for hearing and shall cause notice of the
363	363	application and the hearing to be served on the person to whom the
364	364	subpoena is directed.
365	365	Sec. 157.023. ADMINISTRATIVE PENALTY. (a) The
366	366	commissioner, after notice and opportunity for a hearing, may
367	367	impose an administrative penalty on a person licensed as a
368	368	residential mortgage loan originator under this chapter who
369	369	violates this chapter or a rule or order adopted under this chapter.
370	370	(b) The amount of the penalty may not exceed $2,500, and
371	371	each day a violation continues or occurs is a separate violation for
372	372	the purpose of imposing a penalty. The amount shall be based on:
373	373	(1) the seriousness of the violation, including the
374	374	nature, circumstances, extent, and gravity of the violation;
375	375	(2) the history of previous violations;
376	376	(3) the amount necessary to deter a future violation;
377	377	(4) efforts to correct the violation; and
378	378	(5) any other matter that justice may require.
379	379	(c) The enforcement of the penalty may be stayed during the
380	380	time the order is under judicial review if the person pays the
381	381	penalty to the clerk of the court or files a supersedeas bond with
382	382	the court in the amount of the penalty. A person who cannot afford
383	383	to pay the penalty or file the bond may stay the enforcement by
384	384	filing an affidavit in the manner required by the Texas Rules of
385	385	Civil Procedure for a party who cannot afford to file security for
386	386	costs, subject to the right of the commissioner to contest the
387	387	affidavit as provided by those rules.
388	388	(d) The attorney general may sue to collect the penalty.
389	389	(e) An appeal of an administrative penalty under this
390	390	section is considered to be a contested case under Chapter 2001,
391	391	Government Code.
392	392	Sec. 157.024. DISCIPLINARY ACTION; CEASE AND DESIST ORDER.
393	393	(a) The commissioner may order disciplinary action against a
394	394	licensed residential mortgage loan originator when the
395	395	commissioner, after notice and opportunity for a hearing, has
396	396	determined that the person:
397	397	(1) obtained a license, including a renewal of a
398	398	license, under this chapter through a false or fraudulent
399	399	representation or made a material misrepresentation in an
400	400	application for a license or for the renewal of a license under this
401	401	chapter;
402	402	(2) published or caused to be published an
403	403	advertisement related to the business of a residential mortgage
404	404	loan originator that:
405	405	(A) was misleading;
406	406	(B) was likely to deceive the public;
407	407	(C) in any manner tended to create a misleading
408	408	impression;
409	409	(D) failed to identify as a licensed residential
410	410	mortgage loan originator the person causing the advertisement to be
411	411	published; or
412	412	(E) violated federal or state law;
413	413	(3) while performing an act for which a license under
414	414	this chapter is required, engaged in conduct that constitutes
415	415	improper, fraudulent, or dishonest dealings;
416	416	(4) entered a plea of nolo contendere to or was
417	417	convicted of a criminal offense that is a felony or that involves
418	418	fraud or moral turpitude in a court of this or another state or in a
419	419	federal court;
420	420	(5) failed to use a fee collected in advance of closing
421	421	a residential mortgage loan for a purpose for which the fee was
422	422	paid;
423	423	(6) failed within a reasonable time to honor a check
424	424	issued to the commissioner after the commissioner mailed a request
425	425	for payment by mail to the person's last known business address as
426	426	reflected in the commissioner's records;
427	427	(7) induced or attempted to induce a party to a
428	428	contract to breach the contract so the person could make a
429	429	residential mortgage loan;
430	430	(8) published or circulated an unjustified or
431	431	unwarranted threat of legal proceedings in matters related to the
432	432	person's actions or services as a licensed residential mortgage
433	433	loan originator;
434	434	(9) aided, abetted, or conspired with a person to
435	435	circumvent the requirements of this chapter;
436	436	(10) acted in the dual capacity of a licensed
437	437	residential mortgage loan originator and real estate broker,
438	438	salesperson, or attorney in a transaction without the knowledge and
439	439	written consent of the mortgage applicant or in violation of
440	440	applicable requirements under federal law;
441	441	(11) discriminated against a prospective borrower on
442	442	the basis of race, color, religion, sex, national origin, ancestry,
443	443	familial status, or disability;
444	444	(12) failed or refused on demand to:
445	445	(A) produce a document, book, or record
446	446	concerning a residential mortgage loan transaction conducted by the
447	447	licensed residential mortgage loan originator for inspection by the
448	448	commissioner or the commissioner's authorized personnel or
449	449	representative;
450	450	(B) give the commissioner or the commissioner's
451	451	authorized personnel or representative free access to the books or
452	452	records relating to the residential mortgage loan originator's
453	453	business kept by any other person or any business entity through
454	454	which the residential mortgage loan originator conducts
455	455	residential mortgage loan origination activities; or
456	456	(C) provide information requested by the
457	457	commissioner as a result of a formal or informal complaint made to
458	458	the commissioner;
459	459	(13) failed without just cause to surrender, on
460	460	demand, a copy of a document or other instrument coming into the
461	461	residential mortgage loan originator's possession that was
462	462	provided to the residential mortgage loan originator by another
463	463	person making the demand or that the person making the demand is
464	464	under law entitled to receive;
465	465	(14) disregarded or violated this chapter, a rule
466	466	adopted under this chapter, or an order issued by the commissioner
467	467	under this chapter;
468	468	(15) provided false information to the commissioner
469	469	during the course of an investigation or inspection;
470	470	(16) paid compensation to a person who is not licensed
471	471	or exempt under this chapter for acts for which a license under this
472	472	chapter is required; or
473	473	(17) established an association, by employment or
474	474	otherwise, with a person not licensed or exempt under this chapter
475	475	who was expected or required to act as a residential mortgage loan
476	476	originator.
477	477	(b) The commissioner may also order disciplinary action
478	478	against a licensed residential mortgage loan originator, after
479	479	notice and opportunity for a hearing, if the commissioner, during
480	480	the current term of the license, becomes aware of any fact that
481	481	would have been grounds for denial of an original license if the
482	482	fact had been known by the commissioner on the date the license was
483	483	granted.
484	484	(c) In addition to disciplinary action by the commissioner
485	485	authorized under Subsections (a) and (b), the commissioner, if the
486	486	commissioner has reasonable cause to believe that a licensed
487	487	residential mortgage loan originator has violated or is about to
488	488	violate this section, may issue without notice and hearing an order
489	489	to cease and desist continuing a particular action or an order to
490	490	take affirmative action, or both, to enforce compliance with this
491	491	chapter.
492	492	(d) An order issued under Subsection (c) must contain a
493	493	reasonably detailed statement of the facts on which the order is
494	494	made. If a residential mortgage loan originator against whom the
495	495	order is made requests a hearing, the commissioner shall set and
496	496	give notice of a hearing before the commissioner or an
497	497	administrative law judge. The hearing shall be governed by Chapter
498	498	2001, Government Code. Based on the findings of fact, conclusions
499	499	of law, and recommendations of the administrative law judge, the
500	500	commissioner by order may find that a violation has occurred or not
501	501	occurred.
502	502	(e) If a hearing is not requested under Subsection (d) not
503	503	later than the 30th day after the date on which an order is made, the
504	504	order is considered final and not appealable.
505	505	(f) The commissioner, after giving notice, may impose
506	506	against a residential mortgage loan originator who violates a cease
507	507	and desist order an administrative penalty in an amount not to
508	508	exceed $1,000 for each day of the violation. In addition to any
509	509	other remedy provided by law, the commissioner may institute in
510	510	district court a suit for injunctive relief and to collect the
511	511	administrative penalty. A bond is not required of the commissioner
512	512	with respect to injunctive relief granted under this subsection.
513	513	(g) For purposes of Subsection (a), a residential mortgage
514	514	loan originator is considered convicted if a sentence is imposed on
515	515	that person, that person receives community supervision, including
516	516	deferred adjudication community supervision, or the court defers
517	517	final disposition of that person's case.
518	518	(h) If a residential mortgage loan originator fails to pay
519	519	an administrative penalty that has become final or fails to comply
520	520	with an order of the commissioner that has become final, in addition
521	521	to any other remedy provided under law, the commissioner, on not
522	522	less than 10 days' notice to the residential mortgage loan
523	523	originator, may without a prior hearing suspend the residential
524	524	mortgage loan originator's license. The suspension continues until
525	525	the residential mortgage loan originator has complied with the
526	526	administrative order or paid the administrative penalty. During
527	527	the period of suspension, the residential mortgage loan originator
528	528	may not originate a residential mortgage loan, as defined by
529	529	Section 180.002.
530	530	(i) An order of suspension under Subsection (h) may be
531	531	appealed. An appeal is a contested case governed by Chapter 2001,
532	532	Government Code. A hearing of an appeal of an order of suspension
533	533	issued under Subsection (h) shall be held not later than the 15th
534	534	day after the date of receipt of the notice of appeal. The
535	535	appellant shall be provided at least three days' notice of the time
536	536	and place of the hearing.
537	537	(j) An order revoking the license of a residential mortgage
538	538	loan originator may provide that the person is prohibited, without
539	539	previously obtaining written consent of the commissioner, from:
540	540	(1) engaging in the business of originating or making
541	541	residential mortgage loans, as defined by Section 180.002;
542	542	(2) otherwise affiliating with a person for the
543	543	purpose of engaging in the business of originating or making
544	544	residential mortgage loans, as defined by Section 180.002; and
545	545	(3) being an employee, officer, director, manager,
546	546	shareholder, member, agent, contractor, or processor of a mortgage
547	547	banker, mortgage broker, or mortgage broker loan officer.
548	548	(k) On notice and opportunity for a hearing, the
549	549	commissioner may suspend the license of a residential mortgage loan
550	550	originator under this chapter if an indictment or information is
551	551	filed or returned alleging that the person committed a criminal
552	552	offense involving fraud, theft, or dishonesty. The suspension
553	553	continues until the criminal case is dismissed or the person is
554	554	acquitted.
555	555	Sec. 157.025. RESTITUTION. The commissioner may order a
556	556	residential mortgage loan originator to make restitution for any
557	557	amount received by that person in violation of this chapter.
558	558	Sec. 157.026. HEARINGS AND JUDICIAL REVIEW. (a) The
559	559	commissioner may employ an enforcement staff to investigate and
560	560	prosecute complaints made against residential mortgage loan
561	561	originators licensed under this chapter. The commissioner may
562	562	employ an administrative law judge to conduct hearings under this
563	563	section. The commissioner may collect and deposit any court costs
564	564	assessed under a final order.
565	565	(b) If the commissioner proposes to suspend or revoke a
566	566	license of a residential mortgage loan originator or if the
567	567	commissioner refuses to issue or renew a license to an applicant for
568	568	a residential mortgage loan originator license or person requesting
569	569	a renewal of a residential mortgage loan originator license under
570	570	this chapter, the applicant or license holder is entitled to a
571	571	hearing before the commissioner or an administrative law judge who
572	572	shall make a proposal for decision to the commissioner. The
573	573	commissioner or administrative law judge shall prescribe the time
574	574	and place of the hearing. The hearing is governed by Chapter 2001,
575	575	Government Code.
576	576	(c) The commissioner or administrative law judge may issue
577	577	subpoenas for the attendance of witnesses and the production of
578	578	records or documents. Process issued by the commissioner or the
579	579	administrative law judge may extend to all parts of the state and
580	580	may be served by any person designated by the commissioner or
581	581	administrative law judge.
582	582	(d) An individual aggrieved by a ruling, order, or decision
583	583	of the commissioner has the right to appeal to a district court in
584	584	the county in which the hearing was held. An appeal under this
585	585	subsection is governed by Chapter 2001, Government Code.
586	586	Sec. 157.027. CIVIL ACTIONS AND INJUNCTIVE RELIEF. (a) A
587	587	residential mortgage loan applicant injured by a violation of this
588	588	chapter by a residential mortgage loan originator may bring an
589	589	action for recovery of actual monetary damages and reasonable
590	590	attorney's fees and court costs.
591	591	(b) The commissioner, the attorney general, or a
592	592	residential mortgage loan applicant may bring an action to enjoin a
593	593	violation of this chapter by a residential mortgage loan
594	594	originator.
595	595	(c) A remedy provided by this section is in addition to any
596	596	other remedy provided by law.
597	597	Sec. 157.028. BURDEN OF PROOF TO ESTABLISH AN EXEMPTION.
598	598	The burden of proving an exemption in a proceeding or action brought
599	599	under this chapter is on the person claiming the benefit of the
600	600	exemption.
601	601	Sec. 157.029. RELIANCE ON WRITTEN NOTICES FROM THE
602	602	COMMISSIONER. A person does not violate this chapter with respect
603	603	to an action taken or omission made in reliance on a written notice,
604	604	written interpretation, or written report from the commissioner
605	605	unless a subsequent amendment to this chapter or a rule adopted
606	606	under this chapter affects the commissioner's notice,
607	607	interpretation, or report.
608	608	Sec. 157.030. COMPLETION OF RESIDENTIAL MORTGAGE
609	609	ORIGINATION SERVICES. (a) On disbursement of mortgage proceeds to
610	610	or on behalf of the residential mortgage loan applicant, the
611	611	residential mortgage loan originator who assisted the applicant in
612	612	obtaining the residential mortgage loan is considered to have
613	613	completed the performance of the loan originator's services for the
614	614	applicant and owes no additional duties or obligations to the
615	615	applicant with respect to the loan.
616	616	(b) This section does not limit or preclude the liability of
617	617	a residential mortgage loan originator for:
618	618	(1) failing to comply with this chapter or a rule
619	619	adopted under this chapter;
620	620	(2) failing to comply with a provision of or duty
621	621	arising under an agreement with a residential mortgage loan
622	622	applicant under this chapter; or
623	623	(3) violating any other state or federal law.
624	624	Sec. 157.031. UNLICENSED ACTIVITY; OFFENSE. (a) A person
625	625	commits an offense if the person is an employee of a mortgage
626	626	banker, is not exempt under this chapter, and acts as a residential
627	627	mortgage loan originator without first obtaining a license required
628	628	under this chapter. An offense under this subsection is a Class B
629	629	misdemeanor. A second or subsequent conviction for an offense
630	630	under this subsection is a Class A misdemeanor.
631	631	(b) If the commissioner has reasonable cause to believe that
632	632	a person who is not licensed or exempt under this chapter has
633	633	engaged, or is about to engage, in an act or practice for which a
634	634	license is required under this chapter, the commissioner may issue,
635	635	without notice and hearing, an order to cease and desist from
636	636	continuing a particular action or an order to take affirmative
637	637	action, or both, to enforce compliance with this chapter. The order
638	638	must contain a reasonably detailed statement of the facts on which
639	639	the order is made. The order may assess an administrative penalty
640	640	in an amount not to exceed $1,000 per day for each violation and may
641	641	require a person to pay to a residential mortgage loan applicant any
642	642	compensation received by the person from the applicant in violation
643	643	of this chapter. If a person against whom the order is made
644	644	requests a hearing, the commissioner shall set and give notice of a
645	645	hearing before the commissioner or an administrative law judge.
646	646	The hearing shall be governed by Chapter 2001, Government Code. An
647	647	order under this subsection becomes final unless the person to whom
648	648	the order is issued requests a hearing not later than the 30th day
649	649	after the date the order is issued.
650	650	(c) If a hearing has not been requested under Subsection (b)
651	651	not later than the 30th day after the date the order is made, the
652	652	order is considered final and not appealable. The commissioner,
653	653	after giving notice, may impose against a person who violates a
654	654	cease and desist order, an administrative penalty in an amount not
655	655	to exceed $1,000 for each day of a violation. In addition to any
656	656	other remedy provided by law, the commissioner may institute in
657	657	district court a suit for injunctive relief and to collect the
658	658	administrative penalty. A bond is not required of the commissioner
659	659	with respect to injunctive relief granted under this section.
660	660	SECTION 9. The heading to Section 341.103, Finance Code, is
661	661	amended to read as follows:
662	662	Sec. 341.103. REGULATION OF SAVINGS INSTITUTIONS, [AND]
663	663	LICENSED MORTGAGE BROKERS AND LOAN OFFICERS, AND REGISTERED
664	664	MORTGAGE BANKERS AND LICENSED LOAN OFFICERS.
665	665	SECTION 10. Section 341.103(a), Finance Code, is amended to
666	666	read as follows:
667	667	(a) The savings and mortgage lending commissioner shall
668	668	enforce this subtitle relating to the regulation of:
669	669	(1) state savings associations operating under this
670	670	subtitle;
671	671	(2) state savings banks operating under this subtitle;
672	672	[and]
673	673	(3) persons licensed under Chapter 156; and
674	674	(4) persons registered or licensed under Chapter 157.
675	675	SECTION 11. An individual is not required to comply with
676	676	Section 157.012, Finance Code, as added by this Act, until the later
677	677	of:
678	678	(1) July 31, 2010; or
679	679	(2) a subsequent date that is approved by the
680	680	secretary of the United States Department of Housing and Urban
681	681	Development under the authority granted under the federal Secure
682	682	and Fair Enforcement for Mortgage Licensing Act of 2008 (Pub. L. No.
683	683	110-289).
684	684	SECTION 12. This Act takes effect only if House Bill 10 or
685	685	another similar bill of the Regular Session of the 81st Legislature
686	686	relating to the licensing of residential mortgage loan originators
687	687	is enacted and becomes law. If House Bill 10 or another similar
688	688	bill of the Regular Session of the 81st Legislature relating to the
689	689	licensing of residential mortgage loan originators does not become
690	690	law, this Act does not take effect.
691	691	SECTION 13. Except as provided by Section 12 of this Act,
692	692	this Act takes effect April 1, 2010.
693	693	______________________________ ______________________________
694	694	President of the Senate Speaker of the House
695	695	I certify that H.B. No. 2779 was passed by the House on April
696	696	28, 2009, by the following vote: Yeas 146, Nays 0, 1 present, not
697	697	voting; and that the House concurred in Senate amendments to H.B.
698	698	No. 2779 on May 29, 2009, by the following vote: Yeas 144, Nays 0,
699	699	2 present, not voting.
700	700	______________________________
701	701	Chief Clerk of the House
702	702	I certify that H.B. No. 2779 was passed by the Senate, with
703	703	amendments, on May 26, 2009, by the following vote: Yeas 31, Nays
704	704	0.
705	705	______________________________
706	706	Secretary of the Senate
707	707	APPROVED: __________________
708	708	Date
709	709	__________________
710	710	Governor