Texas 2009 - 81st Regular

Texas Senate Bill SB1026 Compare Versions

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

Old	New	Differences
1	1	81R4346 JAM-D
2	2	By: Lucio S.B. No. 1026
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the establishment of the Texas secure loan pilot
8	8	program by the Texas Department of Housing and Community Affairs.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Chapter 2306, Government Code, is amended by
11	11	adding Subchapter NN to read as follows:
12	12	SUBCHAPTER NN. TEXAS SECURE LOAN PILOT PROGRAM
13	13	Sec. 2306.1081. DEFINITION. In this subchapter, "program"
14	14	means the Texas secure loan pilot program.
15	15	Sec. 2306.1082. TEXAS SECURE LOAN PILOT PROGRAM. (a) The
16	16	department shall establish the Texas secure loan pilot program to
17	17	provide first lien and second lien single-family mortgage loans to
18	18	individuals and families of low income.
19	19	(b) The program may include the provision of down payment
20	20	and closing cost assistance.
21	21	Sec. 2306.1083. ADMINISTRATION OF PROGRAM; RULES. (a) The
22	22	department shall administer the program.
23	23	(b) The board shall adopt rules governing:
24	24	(1) the administration of the program, including the
25	25	origination of loans under the program;
26	26	(2) the criteria for approving another entity to
27	27	service loans originated under the program;
28	28	(3) the use of insurance on the loans and the homes
29	29	financed under the program, as considered appropriate by the board
30	30	to provide additional security for the loans;
31	31	(4) the verification of occupancy of the home by the
32	32	homebuyer as the homebuyer's principal residence;
33	33	(5) the terms of any memorandum of understanding or
34	34	contract with another entity for processing, servicing, or
35	35	administering the loans; and
36	36	(6) criteria for authorizing the modification of loan
37	37	terms for homebuyers whose income is adversely affected by
38	38	circumstances such as unemployment, a reduction of wages or hours
39	39	of employment, illness, or the death of a spouse or other person
40	40	contributing to the income of a homebuyer.
41	41	Sec. 2306.1084. ELIGIBILITY. (a) To be eligible for a
42	42	mortgage loan issued by the department under this subchapter, a
43	43	homebuyer must:
44	44	(1) earn an income, adjusted for family size, of not
45	45	more than:
46	46	(A) 80 percent of the area median income if the
47	47	homebuyer lives in a rural area; or
48	48	(B) 60 percent of the area median income if the
49	49	homebuyer lives in an urban area;
50	50	(2) intend to occupy, as the homebuyer's principal
51	51	residence, the home for which the mortgage loan is issued; and
52	52	(3) meet any additional eligibility requirements or
53	53	limitations prescribed by the department.
54	54	(b) The department may enter into memoranda of
55	55	understanding with other agencies of the state or may contract with
56	56	private entities to process, service, or administer all or a
57	57	portion of the loans issued under this subchapter.
58	58	Sec. 2306.1085. ALLOCATION OF LOANS. The department shall
59	59	issue at least 50 percent of all loans under this subchapter to
60	60	homebuyers whose incomes do not exceed 60 percent of area median
61	61	family income, adjusted for family size.
62	62	Sec. 2306.1086. LOAN TERMS; RECOVERY OF PRINCIPAL. (a) The
63	63	department shall establish reasonable interest rates for first lien
64	64	and second lien mortgage loans under this subchapter to allow full
65	65	repayment of those loans by low-income homebuyers.
66	66	(b) The department shall recover the full amount of the
67	67	principal of a loan issued under this subchapter.
68	68	Sec. 2306.1087. MODIFICATION OF LOAN TERMS. If a homebuyer
69	69	meets the criteria adopted by the department under Section
70	70	2306.1083(b)(6), the department or other servicer of the loan may
71	71	modify the terms of the loan by:
72	72	(1) suspending payments for a specific period;
73	73	(2) extending the term of the loan to reduce the amount
74	74	of the payments; or
75	75	(3) lowering the interest rate to reduce the amount of
76	76	the payments.
77	77	Sec. 2306.1088. INITIATION OF MODIFIED LOAN TERMS. (a)
78	78	Regardless of whether a loan payment is missed, the modification of
79	79	loan terms under Section 2306.1087 may be requested by the
80	80	homebuyer or initiated by the department or other servicer of the
81	81	loan.
82	82	(b) If a homebuyer misses a scheduled payment for a loan
83	83	under this subchapter, the department or other servicer of the loan
84	84	shall contact the homebuyer and determine the reason for the missed
85	85	payment. If the payment was missed for a reason meeting the
86	86	criteria adopted by the board under Section 2306.1083(b)(6), the
87	87	department or servicer may modify the terms of the loan under
88	88	Section 2306.1087.
89	89	Sec. 2306.1089. EDUCATION SERVICES FOR HOMEBUYERS. The
90	90	department shall provide homebuyer and homeowner education and
91	91	counseling services to persons receiving loans under this
92	92	subchapter.
93	93	Sec. 2306.1090. FUNDING. (a) The department shall ensure
94	94	that a loan issued under this subchapter is structured in a way that
95	95	complies with any requirements associated with the source of the
96	96	funds used for the loan.
97	97	(b) In addition to funds set aside for the program under
98	98	Section 1372.023 and any other available funds, including
99	99	legislative appropriations, the department may solicit and accept
100	100	gifts and grants for the purposes of this subchapter.
101	101	(c) The department may package, securitize, and sell the
102	102	loans issued under this subchapter and use the proceeds of the sale
103	103	to issue additional loans.
104	104	SECTION 2. The Texas Department of Housing and Community
105	105	Affairs shall adopt the rules required by Subchapter NN, Government
106	106	Code, as added by this Act, not later than October 1, 2009, and
107	107	shall begin issuing loans under the Texas secure loan pilot program
108	108	not later than January 1, 2010.
109	109	SECTION 3. This Act takes effect September 1, 2009.