Texas 2009 - 81st Regular

Texas House Bill HB3588 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	81R11344 CLG-D
2	2	By: Olivo H.B. No. 3588
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the regulation of mortgage brokers.
8	8	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	9	SECTION 1. Subchapter C, Chapter 156, Finance Code, is
10	10	amended by adding Sections 156.216 and 156.217 to read as follows:
11	11	Sec. 156.216. MORTGAGE BROKER DUTIES. (a) A mortgage broker
12	12	owes a fiduciary duty to a mortgage applicant in the origination of
13	13	a mortgage loan. The exercise of this duty includes:
14	14	(1) ensuring that any mortgage loan offered is
15	15	affordable and meets the mortgage applicant's purposes, as
16	16	determined by considering factors including:
17	17	(A) the applicant's circumstances;
18	18	(B) the purpose of the loan, including the reason
19	19	why the applicant has applied for the loan; and
20	20	(C) the applicant's ability to repay;
21	21	(2) making reasonable efforts to secure a loan that is
22	22	suitable to the mortgage applicant considering all of the
23	23	circumstances, including interest rates, charges, and repayment
24	24	terms of the loan and the loan options for which the applicant
25	25	qualifies; and
26	26	(3) offering the mortgage applicant the most favorable
27	27	terms available to a person having the applicant's qualifications.
28	28	(b) A mortgage applicant's statement of ability to repay a
29	29	loan is not conclusive evidence of the applicant's ability to repay
30	30	the loan. A mortgage broker must evaluate other reliable,
31	31	objective evidence of affordability and ability to repay.
32	32	(c) The duties of a mortgage broker may not be waived or
33	33	disclaimed unless otherwise provided by law.
34	34	Sec. 156.217. PROHIBITED PRACTICES. (a) A mortgage broker
35	35	may not recommend or make a mortgage loan that contains a provision
36	36	for a prepayment penalty.
37	37	(b) A mortgage broker may not receive any yield-spread
38	38	premium from a lender for processing and originating a mortgage
39	39	loan.
40	40	(c) A mortgage broker may not recommend to a mortgage
41	41	applicant an interest rate, charge, principal amount, or prepayment
42	42	term that is not suitable to the mortgage applicant considering all
43	43	of the applicant's circumstances, including the characteristics of
44	44	the property that secures or will secure the mortgage loan and the
45	45	loan terms for which the mortgage applicant qualifies.
46	46	(d) A mortgage broker may not:
47	47	(1) mischaracterize:
48	48	(A) a mortgage applicant's credit history; or
49	49	(B) the mortgage loans available to an applicant;
50	50	(2) discourage a mortgage applicant from seeking a
51	51	mortgage loan from another creditor or with another mortgage
52	52	broker, if the mortgage broker is unable to offer or recommend a
53	53	suitable mortgage loan to the applicant;
54	54	(3) misrepresent the material facts or knowingly make
55	55	a false promise likely to induce an applicant to obtain a mortgage
56	56	loan, or pursue a course of misrepresentation through an agent or
57	57	otherwise;
58	58	(4) misrepresent to or conceal from a mortgage
59	59	applicant material factors or terms of a mortgage loan transaction;
60	60	(5) fail to disburse funds in accordance with an
61	61	agreement;
62	62	(6) engage in a transaction, practice, or course of
63	63	business that operates a fraud on a person or violates Subchapter E,
64	64	Chapter 17, Business & Commerce Code;
65	65	(7) fraudulently or deceitfully advertise a mortgage
66	66	loan or misrepresent the terms or charges incidental to a mortgage
67	67	loan in an advertisement;
68	68	(8) recommend or encourage default on an existing loan
69	69	or other debt before and in connection with the closing or planned
70	70	closing of a mortgage loan that refinances all or a portion of that
71	71	existing loan or debt;
72	72	(9) knowingly engage in the practice of making a home
73	73	loan to a mortgage applicant who refinances an existing loan if the
74	74	new loan does not have a reasonable, tangible net benefit to the
75	75	mortgage applicant considering all of the circumstances, including
76	76	the terms of the new and refinanced loans, the cost of the new loan,
77	77	and the mortgage applicant's circumstances; and
78	78	(10) influence or attempt to influence through direct
79	79	or indirect means the outcome of a real estate appraisal sought in
80	80	connection with a mortgage loan, or otherwise engage in a practice
81	81	or course of business that induces or attempts to induce a real
82	82	estate appraiser to violate the Uniform Standards of Professional
83	83	Appraisal Practice in connection with a mortgage loan.
84	84	(e) This section does not prohibit a mortgage broker from
85	85	providing a mortgage applicant with accurate, unbiased, or general
86	86	information about consumer home loans, underwriting standards,
87	87	methods of improving credit history, or other matters relevant to a
88	88	mortgage applicant.
89	89	SECTION 2. This Act takes effect September 1, 2009.