Texas Senate Bill SB1475

Texas 2009 - 81st Regular

Caption

Relating to the notice required by certain mortgage servicers before foreclosing a contract lien on certain real property; providing civil penalties.

Impact

The bill aims to enhance consumer protection by ensuring that homeowners are aware of their rights regarding mediation, which can provide an alternative to foreclosure. By requiring the mediator's involvement, the bill helps to foster communication between mortgage servicers and homeowners, potentially preventing unnecessary foreclosures. The effect of this legislation would likely provide a reprieve to homeowners facing financial difficulties, allowing them additional time and resources to negotiate terms with their lenders.

Summary

Senate Bill 1475 introduces new requirements for mortgage servicers prior to foreclosing on a contract lien applicable to residential real property. The bill mandates that mortgage servicers must provide notice to debtors about their right to enter into mediation before the acceleration of debt repayment or foreclosure occurs. This notice should be sent between 60 and 90 days prior to any foreclosure action and must be in a clear font size to ensure readability.

Contention

There may be contention surrounding the enforcement mechanism of this bill, particularly regarding the civil penalties imposed on mortgage servicers who do not comply with the new notice requirements. This could lead to debates about the balance of responsibilities between financial institutions and consumers. Some stakeholders might argue that the requirements could place additional burdens on mortgage servicers, while others would view it as a necessary protective measure for homeowners, ensuring they have adequate opportunity to resolve their financial issues before foreclosure proceedings commence.