81R6367 UM-D
By: Ellis, Van de Putte, Watson S.B. No. 1475
A BILL TO BE ENTITLED
AN ACT
relating to the notice required by certain mortgage servicers
before foreclosing a contract lien on certain real property;
providing civil penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 51, Property Code, is amended by adding
Section 51.0022 to read as follows:
Sec. 51.0022. PRE-FORECLOSURE REQUIREMENTS FOR CERTAIN
MORTGAGE SERVICERS. (a) This section applies to the foreclosure of
a contract lien on residential real property occupied by an owner of
the property if the mortgagee is a financial institution that
requested and received funds from the federal government as
provided by the Emergency Economic Stabilization Act of 2008 (Pub.
L. No. 110-343).
(b) A mortgagee may not accelerate a repayment of a debt
secured by a contract lien to which this section applies or post
real property for a foreclosure sale under Section 51.002 unless
the mortgage servicer, not earlier than the 90th day before the date
on which the debt was accelerated or the property is posted for
foreclosure or later than the 60th day before that date, sends a
notice to the debtor, in the form prescribed under Subsection (h),
by regular mail and by certified mail, return receipt requested,
that states in 14-point or larger type that the debtor has the right
to enter into mediation.
(c) A mortgage servicer that gives notice under Subsection
(b) must prepare a written affirmation that indicates:
(1) the mortgage servicer provided the notice in
accordance with Subsection (b); and
(2) whether:
(A) the mortgage servicer mediated the dispute
without resolution;
(B) the mortgage servicer mediated the dispute
and the debtor failed to comply with a substantive term of an
agreement reached in the mediation; or
(C) the debtor refused to engage in mediation
after receiving notice of the right to mediate the dispute.
(d) A debtor is entitled to mediation under this section if
the debtor or the debtor's authorized agent sends a written notice
indicating the debtor's election to mediate on or before the 30th
day after the postmark date on the notice sent by the mortgage
servicer by certified mail under Subsection (b). A notice of the
debtor's election to mediate may be delivered by hand, e-mailed,
faxed, or mailed.
(e) If mediation is timely elected by the debtor, the
mortgage servicer shall cease all collection activity on the debt
until the earlier of:
(1) the date on which the mediation is completed; or
(2) the 60th day after the date on which the debtor
notifies the mortgage servicer of the debtor's election to mediate.
(f) A debtor may receive assistance in conducting the
mediation from a housing counselor approved by the United States
Department of Housing and Urban Development. A formal, in-person
mediation may be conducted with the consent of the debtor and the
mortgage servicer. If the debtor or mortgage servicer does not
consent to a formal mediation, an informal mediation may be
conducted through multiple telephone conversations between the
mortgage servicer and the debtor. Individuals engaged in a
mediation under this section must have actual authority to
negotiate the terms, conditions, fees, and other issues surrounding
the foreclosure and the underlying debt.
(g) A mortgage servicer who violates this section is liable
for a person's actual damages arising from the violation and for a
civil penalty of not more than $2,000. A person may file an action
to seek injunctive relief for a violation of this section.
(h) The Texas Department of Housing and Community Affairs
shall prescribe the form of the notice required by Subsection (b).
SECTION 2. The changes in law made by this Act apply only to
the acceleration of repayment for a debt secured by residential
real property or the posting of real property for a foreclosure sale
on or after the effective date of this Act. The acceleration of
repayment of a debt or the posting of real property for a
foreclosure sale before the effective date of this Act is governed
by the law in effect immediately before the effective date of this
Act, and that law is continued in effect for that purpose.
SECTION 3. This Act takes effect September 1, 2009.