| 1 | 1 | | 81R6367 UM-D |
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| 2 | 2 | | By: Ellis, Van de Putte, Watson S.B. No. 1475 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to the notice required by certain mortgage servicers |
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| 8 | 8 | | before foreclosing a contract lien on certain real property; |
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| 9 | 9 | | providing civil penalties. |
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| 10 | 10 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 11 | 11 | | SECTION 1. Chapter 51, Property Code, is amended by adding |
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| 12 | 12 | | Section 51.0022 to read as follows: |
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| 13 | 13 | | Sec. 51.0022. PRE-FORECLOSURE REQUIREMENTS FOR CERTAIN |
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| 14 | 14 | | MORTGAGE SERVICERS. (a) This section applies to the foreclosure of |
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| 15 | 15 | | a contract lien on residential real property occupied by an owner of |
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| 16 | 16 | | the property if the mortgagee is a financial institution that |
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| 17 | 17 | | requested and received funds from the federal government as |
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| 18 | 18 | | provided by the Emergency Economic Stabilization Act of 2008 (Pub. |
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| 19 | 19 | | L. No. 110-343). |
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| 20 | 20 | | (b) A mortgagee may not accelerate a repayment of a debt |
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| 21 | 21 | | secured by a contract lien to which this section applies or post |
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| 22 | 22 | | real property for a foreclosure sale under Section 51.002 unless |
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| 23 | 23 | | the mortgage servicer, not earlier than the 90th day before the date |
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| 24 | 24 | | on which the debt was accelerated or the property is posted for |
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| 25 | 25 | | foreclosure or later than the 60th day before that date, sends a |
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| 26 | 26 | | notice to the debtor, in the form prescribed under Subsection (h), |
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| 27 | 27 | | by regular mail and by certified mail, return receipt requested, |
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| 28 | 28 | | that states in 14-point or larger type that the debtor has the right |
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| 29 | 29 | | to enter into mediation. |
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| 30 | 30 | | (c) A mortgage servicer that gives notice under Subsection |
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| 31 | 31 | | (b) must prepare a written affirmation that indicates: |
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| 32 | 32 | | (1) the mortgage servicer provided the notice in |
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| 33 | 33 | | accordance with Subsection (b); and |
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| 34 | 34 | | (2) whether: |
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| 35 | 35 | | (A) the mortgage servicer mediated the dispute |
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| 36 | 36 | | without resolution; |
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| 37 | 37 | | (B) the mortgage servicer mediated the dispute |
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| 38 | 38 | | and the debtor failed to comply with a substantive term of an |
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| 39 | 39 | | agreement reached in the mediation; or |
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| 40 | 40 | | (C) the debtor refused to engage in mediation |
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| 41 | 41 | | after receiving notice of the right to mediate the dispute. |
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| 42 | 42 | | (d) A debtor is entitled to mediation under this section if |
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| 43 | 43 | | the debtor or the debtor's authorized agent sends a written notice |
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| 44 | 44 | | indicating the debtor's election to mediate on or before the 30th |
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| 45 | 45 | | day after the postmark date on the notice sent by the mortgage |
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| 46 | 46 | | servicer by certified mail under Subsection (b). A notice of the |
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| 47 | 47 | | debtor's election to mediate may be delivered by hand, e-mailed, |
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| 48 | 48 | | faxed, or mailed. |
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| 49 | 49 | | (e) If mediation is timely elected by the debtor, the |
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| 50 | 50 | | mortgage servicer shall cease all collection activity on the debt |
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| 51 | 51 | | until the earlier of: |
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| 52 | 52 | | (1) the date on which the mediation is completed; or |
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| 53 | 53 | | (2) the 60th day after the date on which the debtor |
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| 54 | 54 | | notifies the mortgage servicer of the debtor's election to mediate. |
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| 55 | 55 | | (f) A debtor may receive assistance in conducting the |
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| 56 | 56 | | mediation from a housing counselor approved by the United States |
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| 57 | 57 | | Department of Housing and Urban Development. A formal, in-person |
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| 58 | 58 | | mediation may be conducted with the consent of the debtor and the |
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| 59 | 59 | | mortgage servicer. If the debtor or mortgage servicer does not |
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| 60 | 60 | | consent to a formal mediation, an informal mediation may be |
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| 61 | 61 | | conducted through multiple telephone conversations between the |
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| 62 | 62 | | mortgage servicer and the debtor. Individuals engaged in a |
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| 63 | 63 | | mediation under this section must have actual authority to |
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| 64 | 64 | | negotiate the terms, conditions, fees, and other issues surrounding |
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| 65 | 65 | | the foreclosure and the underlying debt. |
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| 66 | 66 | | (g) A mortgage servicer who violates this section is liable |
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| 67 | 67 | | for a person's actual damages arising from the violation and for a |
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| 68 | 68 | | civil penalty of not more than $2,000. A person may file an action |
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| 69 | 69 | | to seek injunctive relief for a violation of this section. |
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| 70 | 70 | | (h) The Texas Department of Housing and Community Affairs |
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| 71 | 71 | | shall prescribe the form of the notice required by Subsection (b). |
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| 72 | 72 | | SECTION 2. The changes in law made by this Act apply only to |
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| 73 | 73 | | the acceleration of repayment for a debt secured by residential |
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| 74 | 74 | | real property or the posting of real property for a foreclosure sale |
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| 75 | 75 | | on or after the effective date of this Act. The acceleration of |
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| 76 | 76 | | repayment of a debt or the posting of real property for a |
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| 77 | 77 | | foreclosure sale before the effective date of this Act is governed |
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| 78 | 78 | | by the law in effect immediately before the effective date of this |
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| 79 | 79 | | Act, and that law is continued in effect for that purpose. |
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| 80 | 80 | | SECTION 3. This Act takes effect September 1, 2009. |
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