82R5668 DAK/AJA-D
By: Miles H.B. No. 2410
A BILL TO BE ENTITLED
AN ACT
relating to mortgage loans.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 51.002(d) and (e), Property Code, are
amended to read as follows:
(d) Notwithstanding any agreement to the contrary, the
mortgage servicer of the debt shall serve a debtor in default under
a security instrument imposing a [deed of trust or other] contract
lien on real property and each other person having a recorded
interest in the real property [used as the debtor's residence] with
written notice by certified mail stating that the debtor is in
default under the security instrument imposing the [deed of trust
or other] contract lien, providing a full written disclosure of the
terms of the security instrument, and giving the debtor and any
other person entitled to the notice at least 30 [20] days to cure
the default before notice of sale can be given under Subsection (b).
The entire calendar day on which the notice required by this
subsection is given, regardless of the time of day at which the
notice is given, is included in computing the [20-day] notice
period required by this subsection, and the entire calendar day on
which notice of sale is given under Subsection (b) is excluded in
computing the [20-day] notice period.
(e) Service of a notice under this section by certified mail
is complete when the notice is deposited in the United States mail,
postage prepaid and addressed to the person entitled to notice
[debtor] at the person's [debtor's] last known address. The
affidavit of a person knowledgeable of the facts to the effect that
service was completed is prima facie evidence of service.
SECTION 2. Section 51.0021, Property Code, is amended to
read as follows:
Sec. 51.0021. NOTICE OF CHANGE OF ADDRESS [REQUIRED]. A
debtor shall, and any other person entitled to notice from a
mortgagee or mortgage servicer under this chapter may, inform the
mortgage servicer of the debt in a reasonable manner of any change
of the person's address [of the debtor] for purposes of providing
notice to the person [debtor] under Section 51.002 or another
provision of this chapter.
SECTION 3. Chapter 51, Property Code, is amended by adding
Sections 51.0022 and 51.0023 to read as follows:
Sec. 51.0022. DISCLOSURE OF TERMS OF SECURITY INSTRUMENT.
Not later than the 90th day after the date on which a mortgagee or
the mortgagee's mortgage servicer receives a written request from a
person having a recorded interest in real property that is subject
to a contract lien in which the mortgagee has an interest, the
mortgagee or mortgage servicer shall provide the person a full
written disclosure of the terms of the security instrument.
Sec. 51.0023. JUDICIAL FORECLOSURE: NOTICE OF DEFAULT AND
RIGHT TO CURE. (a) Before a mortgagee or mortgage servicer
commences a judicial foreclosure proceeding, the mortgagee or
mortgage servicer must serve each person having a recorded interest
in the real property that is subject to the deed of trust or other
contract lien being foreclosed, regardless of whether the person is
liable on the debt secured by the contract lien, with written notice
by certified mail stating that the debtor is in default under the
security instrument imposing the contract lien, providing a full
written disclosure of the terms of the security instrument, and
giving the person at least 30 days to cure the default before a
foreclosure proceeding can be commenced.
(b) The entire calendar day on which the notice required by
this section is given, regardless of the time of day at which the
notice is given, is included in computing the notice period
required by this section, and the entire calendar day on which the
judicial foreclosure proceeding is commenced is excluded in
computing the notice period.
(c) Service of a notice under this section by certified mail
is complete when the notice is deposited in the United States mail,
postage prepaid and addressed to the person entitled to notice at
the person's last known address. The affidavit of a person
knowledgeable of the facts to the effect that service was completed
is prima facie evidence of service.
SECTION 4. Subtitle B, Title 4, Finance Code, is amended by
adding Chapter 343A to read as follows:
CHAPTER 343A. REPAYMENT OF REVERSE MORTGAGE LOAN
Sec. 343A.001. DEFINITIONS. In this chapter:
(1) "Personal representative" has the meaning
assigned by Section 3, Texas Probate Code.
(2) "Reverse mortgage" means an extension of credit
that meets the requirements of Sections 50(k)-(p), Article XVI,
Texas Constitution.
Sec. 343A.002. PROCEDURES FOR REPAYMENT FOLLOWING DEATH OF
BORROWERS. A lender who makes a reverse mortgage shall allow for
the repayment of the advances made under the extension of credit
after the death of all borrowers who entered into the loan as
provided by this chapter.
Sec. 343A.003. REQUEST BY HEIR OR REPRESENTATIVE OF
BORROWER'S ESTATE. (a) Following the death of all borrowers who
entered into a reverse mortgage with a lender, a person who is an
heir of the estate of the last surviving borrower may:
(1) establish with the lender that the person is an
heir by:
(A) showing that the person is named in the
borrower's will as an heir entitled to all or part of the real
property securing the reverse mortgage; or
(B) showing evidence of filing an affidavit of
the borrower's death with the recorder of deeds that establishes
the person's identity as an heir entitled to the real property; and
(2) request a disclosure of the terms of the reverse
mortgage and a statement of the amount of advances made under the
extension of credit and the amount owed on the obligation.
(b) A personal representative of the last surviving
borrower's estate may make a request under this section on behalf of
an heir of the borrower if the representative establishes with the
lender that the representative:
(1) is named in the will of the borrower to serve as
personal representative of the estate; or
(2) has been appointed by a probate court to serve as
personal representative of the estate.
Sec. 343A.004. DISCLOSURE. (a) A lender who receives a
request under Section 343A.003 shall provide to the heir or
representative making the request:
(1) a full written disclosure of the terms of the
reverse mortgage and a statement that contains the information
described by Section 343A.003(a)(2); and
(2) a written offer to the heirs for the repayment of
the mortgage that:
(A) allows the heir a repayment period of at
least 15 years;
(B) provides for interest to be charged at a rate
not to exceed the average rate of interest charged on reverse
mortgage loans on the date of the borrower's death; and
(C) provides for a period of at least 90 days
after the date the information is sent for the offer to be accepted.
(b) The information required under Subsection (a) must be
mailed to the heir or the personal representative, by certified
mail, return receipt requested, not later than the earlier of:
(1) the 90th day after the date the lender receives the
request; or
(2) the 90th day before the date the lender commences
any foreclosure proceedings.
SECTION 5. (a) Sections 51.002(d) and (e), Property Code,
as amended by this Act, apply to a foreclosure for which a notice of
sale under Section 51.002(b), Property Code, is given on or after
the effective date of this Act, unless the notice of default was
given under Section 51.002(d), Property Code, before the effective
date of this Act. A foreclosure for which the notice of default was
given 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.
(b) Chapter 343A, Finance Code, as added by this Act,
applies to a reverse mortgage entered into by an individual whose
death occurs on or after the effective date of this Act without
regard to whether the mortgage was entered into before, on, or after
the effective date of this Act.
SECTION 6. This Act takes effect September 1, 2011.