82R4552 PMO-D
By: Lucio III H.B. No. 2684
A BILL TO BE ENTITLED
AN ACT
relating to the foreclosure process; creating an offense; providing
penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Title 5, Property Code, is amended by adding
Subtitle A-1 to read as follows:
SUBTITLE A-1. CONSUMER PROTECTIONS
CHAPTER 50. FORECLOSURE PROTECTION ACT
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 50.001. SHORT TITLE. This chapter may be cited as the
"Foreclosure Protection Act."
Sec. 50.002. DEFINITIONS. (a) In this chapter:
(1) "Equity purchase contract" means a contract
between an equity purchaser and the homeowner of a residence in
foreclosure.
(2) "Equity purchaser" means a person who acquires
title to a residence in foreclosure. The term does not include a
person who acquires the title:
(A) for purposes of using the property as the
person's residence for at least one year;
(B) by a deed in lieu of foreclosure to the holder
of a voluntary lien or encumbrance of record;
(C) by a deed from the officer charged with
selling property under Chapter 34, Tax Code;
(D) at a sale of real property authorized by
statute;
(E) by court order or judgment;
(F) from the person's spouse or a relative of the
person related by consanguinity or affinity;
(G) while performing services as a part of a
person's normal business activities under the laws of this state or
the United States that regulate banks, trust companies, savings and
loan associations, credit unions, or insurance companies;
(H) while performing services as an affiliate of
a person described by Paragraph (G), or as an employee or agent of a
person described by Paragraph (G), if the affiliate or employee or
agent performs those services as part of that person's normal
business activities; or
(I) as a result of a short sale transaction that
complies with Section 50.107 and in which a short sale addendum
form, as adopted by the Texas Real Estate Commission, is part of the
contract used to acquire the residence in foreclosure.
(3) "Foreclosure consultant" means a person who, in
the course of the person's business, vocation, or occupation,
solicits, represents, or offers to a homeowner to perform, for
compensation from the homeowner or from the proceeds of a loan or
advance of funds, a service that the person represents will:
(A) prevent or postpone a foreclosure sale;
(B) obtain a forbearance from:
(i) a mortgagee;
(ii) a beneficiary of a deed of trust; or
(iii) another person who holds a lien
secured by the residence in foreclosure;
(C) assist the homeowner:
(i) to cure the default giving rise to the
foreclosure action; or
(ii) to exercise the right of reinstatement
of the homeowner's obligation secured by the residence in
foreclosure;
(D) obtain an extension of the period within
which the homeowner may reinstate the homeowner's obligation
secured by the residence in foreclosure;
(E) obtain a waiver of an acceleration clause
contained in a promissory note or contract secured by a deed of
trust or mortgage on a residence in foreclosure or contained in the
deed of trust or mortgage;
(F) assist the homeowner to obtain a loan or
advance of funds to prevent foreclosure;
(G) avoid or ameliorate the impairment of the
homeowner's credit resulting from the recording of a notice of
default or the conduct of a foreclosure sale;
(H) save the homeowner's residence from
foreclosure; or
(I) assist the homeowner in obtaining excess
proceeds from a foreclosure sale of the homeowner's residence.
(4) "Foreclosure consulting contract" means a
contract between a foreclosure consultant and the homeowner of a
residence.
(5) "Homeowner" means a person who holds record title
to a residence and occupies the residence as the person's principal
residence.
(6) "Residence in foreclosure" means residential real
property consisting of not more than four single-family dwelling
units, at least one of which is occupied as the property owner's
principal place of residence, and against which a foreclosure
action has been commenced or as to which an equity purchaser has
actual or constructive knowledge that the loan is at least 30 days
delinquent or in default.
(7) "Short sale" means a transaction in which the
residence in foreclosure is sold when a holder of an obligation
secured by a lien of record agrees to release the lien for an amount
that is less than the outstanding amount due and owing under the
obligation.
(b) For purposes of Subsection (a)(6), a foreclosure action
has been commenced if:
(1) notice of sale has been filed under Section
51.002(b); or
(2) a judicial foreclosure action has been commenced.
Sec. 50.003. EXCEPTION FROM APPLICABILITY OF CHAPTER. (a)
Except as provided by Subsection (b), this chapter does not apply to
the following persons that perform foreclosure consulting
services:
(1) an attorney admitted to practice in this state who
performs those services in relation to the attorney's
attorney-client relationship with a homeowner or the beneficiary of
the lien being foreclosed;
(2) a person that holds or is owed an obligation
secured by a lien on a residence in foreclosure if the person
performs those services in connection with the obligation or lien;
(3) a mortgage servicer, as defined by Section
51.0001, of an obligation secured by a lien on a residence in
foreclosure if the servicer performs those services in connection
with the obligation or lien;
(4) a person that regulates banks, trust companies,
savings and loan associations, credit unions, or insurance
companies under the laws of this state or the United States if the
person performs those services as part of the person's normal
business activities;
(5) an affiliate of a person described by Subdivision
(4) or an employee or agent of a person described by Subdivision (4)
if the affiliate, employee, or agent performs those services as
part of that person's normal business activities;
(6) a judgment creditor of the homeowner of the
residence in foreclosure, if:
(A) the legal action giving rise to the judgment
was commenced before the notice of default required under Section
5.064, 5.066, or 51.002(d); and
(B) the judgment is recorded in the real property
records of the clerk of the county where the residence in
foreclosure is located;
(7) a licensed title insurer, title insurance agent,
or escrow officer authorized to transact business in this state if
the person is performing those services in conjunction with title
insurance or settlement services;
(8) a licensed real estate broker or real estate
salesperson if the person is engaging in an activity for which the
person is licensed;
(9) a mortgage broker or loan officer licensed under
Chapter 156, Finance Code, if the person is engaging in an activity
for which the person is licensed; or
(10) a nonprofit organization that provides solely
counseling or advice to homeowners who have a residence in
foreclosure or have defaulted on their home loans, unless the
organization is an associate of the foreclosure consultant.
(b) This chapter applies to a person described by Subsection
(a) if the person is providing foreclosure consulting services
designed or intended to transfer title, directly or indirectly, to
a residence in foreclosure to that person or that person's
associate.
Sec. 50.004. WAIVER OF CERTAIN RIGHTS VOID. A provision in
a foreclosure consulting contract or equity purchase contract is
void if the provision attempts or purports to:
(1) waive a right specified in this chapter or the
right to a jury trial;
(2) consent to jurisdiction for litigation or choice
of law in a state other than this state;
(3) consent to venue in a county other than the county
in which the residence is located; or
(4) impose a cost or fee greater than the actual cost
or fee.
Sec. 50.005. CONFLICT WITH OTHER LAW. To the extent of a
conflict between this chapter and Chapter 393, Finance Code, this
chapter controls.
[Sections 50.006-50.050 reserved for expansion]
SUBCHAPTER B. FORECLOSURE CONSULTANTS
Sec. 50.051. FORM AND TERMS OF CONTRACT. A contract for
services of a foreclosure consultant entered into by a homeowner of
a residence in foreclosure must:
(1) be printed in at least 12-point type;
(2) include the name of the foreclosure consultant and
the address to which a notice of cancellation may be mailed;
(3) include a full disclosure of:
(A) the nature of the consulting services to be
provided; and
(B) the total amount and terms of any
compensation to be received by the foreclosure consultant;
(4) be provided to each homeowner for review at least
24 hours before the homeowner signs the contract; and
(5) be dated, signed, and acknowledged by each
homeowner and the foreclosure consultant.
Sec. 50.052. REQUIRED DISCLOSURE. (a) Before entering
into a contract with a homeowner of a residence in foreclosure for
the purchase of the services of a foreclosure consultant, the
foreclosure consultant shall provide the homeowner written notice
stating the following, in at least 14-point boldfaced type:
NOTICE REQUIRED BY TEXAS LAW
_______ (name of foreclosure consultant) or an associate of
_________ (name of foreclosure consultant) cannot ask you to sign
or have you sign any document that transfers an interest in your
home or property to __________ (name of foreclosure consultant) or
___________ (name of foreclosure consultant's) associate.
_______ (name of foreclosure consultant) or ________ (name of
foreclosure consultant's) associate cannot guarantee you that they
will be able to refinance your home or arrange for you to keep your
home.
You may, at any time, cancel this contract without penalty of any
kind.
If you want to cancel this contract, mail a signed and dated copy of
this notice of cancellation, or another written notice indicating
your intent to cancel the foreclosure consulting contract, to
_________________ (name and address of foreclosure consultant) at
________________________ (address of foreclosure consultant,
including facsimile and e-mail address).
As part of the cancellation of the contract, you (the homeowner)
must not later than the 60th day after the date of this notice:
(1) repay any money spent on your behalf by
_____________________ (name of foreclosure consultant) before the
consultant receives this notice; and
(2) pay, as a result of this contract, interest on that
amount calculated at the prime rate published by the federal
reserve, plus two percent, with the total interest rate not to
exceed eight percent a year.
This is an important legal contract and could result in the loss of
your home. Contact an attorney or a housing counselor approved by
the federal department of housing and urban development before
signing.
(b) The contract must have attached two easily detachable
copies of a notice of cancellation. The notice must state the
following in at least 14-point type:
NOTICE OF CANCELLATION
_____________ (date of contract)
To: _____________ (name of foreclosure consultant)
_____________ (address of foreclosure consultant, including
facsimile and e-mail)
I hereby cancel this contract.
_____________ (date)
_____________ (homeowner's signature)
(c) The foreclosure consultant shall provide to the
homeowner a signed, dated, and acknowledged copy of the foreclosure
consulting contract, with the notice of cancellation attached, on
execution of the contract.
Sec. 50.053. RIGHT OF CANCELLATION. (a) In addition to any
right of rescission available under state or federal law, the
homeowner has the right to cancel a foreclosure consulting contract
under this chapter at any time.
(b) Notice of cancellation of the foreclosure consulting
contract is effective on the date the homeowner sends the notice by
United States mail, properly addressed with postage prepaid, to the
foreclosure consultant at the address specified in the contract or
through any facsimile or e-mail address identified in the contract
or other materials provided to the homeowner by the foreclosure
consultant.
(c) Notice of cancellation may be in a form other than the
form provided in the contract and is effective, however expressed,
if the notice indicates the homeowner's intention to cancel the
foreclosure consulting contract.
(d) A homeowner who exercises the right to cancel a
foreclosure consulting contract shall, not later than the 60th day
after the date of the notice of cancellation:
(1) repay any money that the foreclosure consultant
paid or advanced in good faith before the consultant received the
notice of cancellation; and
(2) pay interest on that amount calculated at the
prime rate published by the federal reserve plus two percent, with
the total interest rate not to exceed eight percent a year, from the
date of the expenditure until the date repaid by the homeowner.
(e) The right to cancel may not be conditioned on the
repayment of any money.
Sec. 50.054. LANGUAGE. (a) A foreclosure consultant shall
provide the homeowner a copy of all documents required by this
chapter in typed or written form:
(1) in English; and
(2) on request of the homeowner, translated into
another language identified by the homeowner and certified by the
translator as a true and correct translation of the English
version.
(b) The translated, certified document has equal status and
credibility as the English version.
Sec. 50.055. PROHIBITED CONDUCT. A foreclosure consultant
may not:
(1) charge, collect, or receive interest or
compensation for a loan made by the foreclosure consultant to the
homeowner of a residence in foreclosure that exceeds eight percent
a year;
(2) take an assignment of wages to secure payment of
compensation;
(3) acquire an interest, directly or indirectly, in
the real or personal property of the homeowner of a residence in
foreclosure with whom the foreclosure consultant has contracted to
perform services; or
(4) take an action under a power of attorney from a
homeowner for any purpose other than to inspect documents related
to the foreclosure.
Sec. 50.056. RESTRICTIONS ON CHARGE OR RECEIPT OF
CONSIDERATION. A foreclosure consultant may not:
(1) charge, collect, or receive compensation until the
date that the foreclosure consultant has fully performed each
service that the foreclosure consultant has contracted to perform
or has represented that the foreclosure consultant can or will
perform; or
(2) receive any consideration from a third party in
connection with foreclosure consulting services provided to the
homeowner of a residence in foreclosure unless the consideration is
fully disclosed in writing to the homeowner.
[Sections 50.057-50.100 reserved for expansion]
SUBCHAPTER C. EQUITY PURCHASE CONTRACTS
Sec. 50.101. FORM AND TERMS OF CONTRACT. (a) Each equity
purchase contract must be printed in at least 12-point type, dated,
and signed by each selling owner of the residence in foreclosure and
the equity purchaser before the execution of an instrument
quit-claiming, assigning, transferring, conveying, or encumbering
an interest in the residence in foreclosure.
(b) In addition to the notice required by Section 50.103,
the contract must contain:
(1) the name, business address, and telephone number
of the equity purchaser;
(2) the street address and legal description of the
residence in foreclosure;
(3) a clear and conspicuous disclosure of any
financial or legal obligations of the homeowner that will be
assumed by the equity purchaser;
(4) the total consideration to be paid by the equity
purchaser in connection with or incident to the equity purchaser's
acquisition of the residence in foreclosure;
(5) the payment terms or the terms of other
consideration, including any services the equity purchaser
represents will be performed for the homeowner before or after the
sale;
(6) the date and time the possession of the residence
in foreclosure is to be transferred to the equity purchaser;
(7) the terms of any lease agreement;
(8) the specifications of any option or right to
repurchase the residence in foreclosure, including the specific
amount of any escrow deposit, down payment, purchase price, closing
cost, commission, or other fee or cost;
(9) a notice of cancellation as provided in Section
50.103; and
(10) the following notice printed in at least 14-point
boldfaced type immediately above the statement required by Section
50.103:
NOTICE REQUIRED BY TEXAS LAW
Until your right to cancel this contract has ended, ____________
(name of equity purchaser) or anyone working for __________ (name
of equity purchaser) CANNOT ask you to sign or have you sign any
deed or any other document.
(c) If the equity purchaser will not be assuming any
financial or legal obligations of the homeowner, the equity
purchaser shall provide to the homeowner a separate written
disclosure, in at least 14-point boldfaced type, that contains
substantially the following language:
WARNING: PURCHASER, _______________, WILL NOT ASSUME OR PAY ANY
PRESENT MORTGAGE, DEEDS OF TRUST, OR OTHER LIENS OR ENCUMBRANCES
AGAINST THE PROPERTY. THE SELLER, _______________, UNDERSTANDS
THAT THE SELLER WILL REMAIN RESPONSIBLE FOR ALL PAYMENTS DUE ON ALL
MORTGAGES, DEEDS OF TRUST, OR OTHER LIENS OR ENCUMBRANCES AND FOR
ANY DEFICIENCY JUDGMENT ENTERED AFTER THE FORECLOSURE SALE.
I HAVE HAD THIS ENTIRE WARNING READ OUT LOUD TO ME AND
UNDERSTAND THAT THE PURCHASER, _______________, WILL NOT ASSUME ANY
PRESENT MORTGAGES, DEEDS OF TRUST, OR OTHER LIENS OR ENCUMBRANCES
AGAINST THE PROPERTY DESCRIBED AS _______________________.
DATE ________________
SELLER'S SIGNATURE _______________________________.
(d) The contract survives delivery of any instrument of
conveyance of the residence in foreclosure, but does not have any
effect on a person other than a party to the contract or affect
title to the residence in foreclosure.
Sec. 50.102. RIGHT OF CANCELLATION. (a) In addition to any
right of rescission available under state or federal law, the
homeowner has the right to cancel a contract with an equity
purchaser before midnight of the third business day following the
day on which the homeowner signs a contract that complies with this
subchapter or before noon on the day before the foreclosure sale of
the residence in foreclosure, whichever occurs first.
(b) Notice of cancellation of the equity purchase contract
is effective on the date the homeowner personally delivers the
notice to the address specified in the contract or sends the notice
by the United States mail, properly addressed, with postage
prepaid.
(c) Notice of cancellation may be in a form other than the
form provided in the contract and is effective, however expressed,
if the notice indicates the homeowner's intention to cancel the
contract.
(d) In the absence of any written notice of cancellation
from the homeowner, the homeowner's execution of a deed or other
instrument of conveyance of an interest in the residence in
foreclosure to the equity purchaser after the expiration of the
cancellation period creates a rebuttable presumption that the
homeowner did not cancel the contract with the equity purchaser.
Sec. 50.103. NOTICE OF CANCELLATION. (a) The contract must
conspicuously state in at least 12-point boldfaced type the
following as the last provision before the space reserved for the
selling homeowner's signature:
You may cancel this contract for the sale of your house without any
penalty or obligation at any time before _________________ (date
and time). See the attached notice of cancellation form for an
explanation of this right.
(b) The contract must have attached two easily detachable
copies of a cancellation notice. The notice must state the
following in at least 14-point boldfaced type:
NOTICE OF CANCELLATION
______ (date contract signed)
You may cancel this contract for the sale of your house, without any
penalty or obligation, at any time before
_________________________ (date and time). To cancel this
transaction, personally deliver a signed and dated copy of this
Notice of Cancellation by United States mail, postage prepaid, to
__________________, (name of purchaser) at _______________________
(street address of purchaser's place of business) NOT LATER THAN
__________________ (date and time). I hereby cancel this
transaction.
________________________________ (date)
________________________________ (seller's signature)
(c) The equity purchaser shall provide the homeowner with a
signed and dated copy of the contract, with the notice of
cancellation, as provided by Subsection (b), attached on execution
of the contract.
(d) Not later than the 10th day after the date the equity
purchaser receives a notice of cancellation as provided by Section
50.102 and this section, the equity purchaser shall unconditionally
return the original equity purchase contract and any other
documents signed by the homeowner.
Sec. 50.104. ACTIONS BEFORE CANCELLATION PERIOD EXPIRES.
An equity purchaser may not do any of the following before the
period within which the homeowner may cancel the transaction has
elapsed:
(1) accept from the homeowner an execution of, or
induce the homeowner to execute, an instrument of conveyance of an
interest in the residence in foreclosure;
(2) record any document, including the contract or any
lease, lien, or instrument of conveyance, that is signed by the
homeowner;
(3) transfer or encumber or purport to transfer or
encumber an interest in the residence in foreclosure to a third
party; or
(4) pay any consideration to the homeowner.
Sec. 50.105. LANGUAGE. (a) Except as provided by
Subsection (b), an equity purchaser shall provide to a homeowner a
contract, rental agreement, lease, option or right to repurchase,
or notice, conveyance, lien, encumbrance, consent, or other
document or instrument signed by the homeowner printed in English.
(b) If the equity purchaser has actual or constructive
knowledge that the homeowner's principal language is a language
other than English, the equity purchaser shall provide the
homeowner with a notice, printed in the homeowner's principal
language, substantially similar to the following:
This transaction involves important and complex legal
consequences, including your right to cancel this transaction
within three business days following the date you sign this
contract. You should consult with an attorney or seek assistance
from a housing counselor by calling the Texas foreclosure hotline
at _______________ (current, correct telephone number).
(c) If a notice in the homeowner's principal language is
required to be provided under Subsection (b), the equity purchaser
shall provide the notice to the homeowner as a separate document
accompanying the contract required by Section 50.101.
Sec. 50.106. OPTIONS THROUGH RECONVEYANCES. (a) A
reconveyance contract in which a homeowner purports to grant a
residence in foreclosure to an equity purchaser by an instrument
that appears to be an absolute conveyance and reserves to the
homeowner or in which the equity purchaser grants the homeowner an
option to repurchase is permitted only if all of the following
conditions are met:
(1) the reconveyance contract complies with Section
50.101;
(2) the reconveyance contract provides the homeowner
with a nonwaivable 30-day right to cure any default under the
reconveyance contract and specifies that the homeowner may exercise
this right on not less than three separate occasions during the term
of the reconveyance contract;
(3) the equity purchaser fully assumes or discharges
the lien in foreclosure and any prior liens that the foreclosure did
not extinguish without violation of the terms and conditions of the
liens being assumed or discharged;
(4) the equity purchaser verifies and demonstrates
that the homeowner has or will have a reasonable ability to make
lease payments for the residence in foreclosure and to repurchase
the residence in foreclosure not later than the expiration of the
term of the option to repurchase under the reconveyance contract;
and
(5) the price the homeowner must pay to exercise the
option to repurchase the residence in foreclosure is not
unconscionable.
(b) For purposes of Subsection (d), there is a rebuttable
presumption that the homeowner has a reasonable ability to make
lease payments and to repurchase the residence in foreclosure if
the homeowner's payments for primary housing expenses and regular
principal and interest payments on other personal debt do not
exceed 60 percent of the homeowner's monthly gross income.
(c) The acquisition price paid by the equity purchaser may
include any actual costs incurred by the equity purchaser in
acquiring the residence in foreclosure.
(d) For purposes of Subsection (a)(5), there is a rebuttable
presumption that a reconveyance contract in which the repurchase
price is greater than 25 percent of the price at which the equity
purchaser acquired the residence in foreclosure is unconscionable.
Sec. 50.107. SHORT SALES. (a) In this section, "subsequent
purchaser" means a person who:
(1) enters into a contract with an equity purchaser
before the closing of a short sale transaction to acquire the
residence in foreclosure; and
(2) acquires the residence in foreclosure not later
than the 14th day after the date of the closing of the short sale
transaction.
(b) With respect to a short sale transaction in which an
equity purchaser intends to resell the residence in foreclosure to
a subsequent purchaser, the equity purchaser shall:
(1) not later than the date of closing of the short
sale, provide full disclosure to the homeowner and to the holder of
the lien or encumbrance on the residence in foreclosure, or the
holder's representative, of the terms of the agreement between the
equity purchaser and a subsequent purchaser, including the purchase
price to be paid by the subsequent purchaser;
(2) fully disclose to the subsequent purchaser and to
the subsequent purchaser's lender, or the lender's representative,
not later than the effective date of the contract between the
subsequent purchaser and the equity purchaser, the terms of the
agreement between the equity purchaser and the homeowner, including
the purchase price paid by the equity purchaser for the residence in
foreclosure;
(3) comply with all applicable rules adopted by the
Texas Real Estate Commission with regard to short sales; and
(4) comply with Section 2501.006, Insurance Code.
[Sections 50.108-50.150 reserved for expansion]
SUBCHAPTER D. ENFORCEMENT
Sec. 50.151. CRIMINAL PENALTY. (a) A person commits an
offense if the person violates this chapter.
(b) An offense under this chapter is a Class A misdemeanor.
Sec. 50.152. DECEPTIVE TRADE PRACTICE. A violation of this
chapter is a false, misleading, or deceptive act or practice
actionable under Subchapter E, Chapter 17, Business & Commerce
Code.
SECTION 2. Section 17.46(b), Business & Commerce Code, is
amended to read as follows:
(b) Except as provided in Subsection (d) [of this section],
the term "false, misleading, or deceptive acts or practices"
includes, but is not limited to, the following acts:
(1) passing off goods or services as those of another;
(2) causing confusion or misunderstanding as to the
source, sponsorship, approval, or certification of goods or
services;
(3) causing confusion or misunderstanding as to
affiliation, connection, or association with, or certification by,
another;
(4) using deceptive representations or designations
of geographic origin in connection with goods or services;
(5) representing that goods or services have
sponsorship, approval, characteristics, ingredients, uses,
benefits, or quantities which they do not have or that a person has
a sponsorship, approval, status, affiliation, or connection which
he does not;
(6) representing that goods are original or new if
they are deteriorated, reconditioned, reclaimed, used, or
secondhand;
(7) representing that goods or services are of a
particular standard, quality, or grade, or that goods are of a
particular style or model, if they are of another;
(8) disparaging the goods, services, or business of
another by false or misleading representation of facts;
(9) advertising goods or services with intent not to
sell them as advertised;
(10) advertising goods or services with intent not to
supply a reasonable expectable public demand, unless the
advertisements disclosed a limitation of quantity;
(11) making false or misleading statements of fact
concerning the reasons for, existence of, or amount of price
reductions;
(12) representing that an agreement confers or
involves rights, remedies, or obligations which it does not have or
involve, or which are prohibited by law;
(13) knowingly making false or misleading statements
of fact concerning the need for parts, replacement, or repair
service;
(14) misrepresenting the authority of a salesman,
representative or agent to negotiate the final terms of a consumer
transaction;
(15) basing a charge for the repair of any item in
whole or in part on a guaranty or warranty instead of on the value of
the actual repairs made or work to be performed on the item without
stating separately the charges for the work and the charge for the
warranty or guaranty, if any;
(16) disconnecting, turning back, or resetting the
odometer of any motor vehicle so as to reduce the number of miles
indicated on the odometer gauge;
(17) advertising of any sale by fraudulently
representing that a person is going out of business;
(18) advertising, selling, or distributing a card
which purports to be a prescription drug identification card issued
under Section 4151.152, Insurance Code, in accordance with rules
adopted by the commissioner of insurance, which offers a discount
on the purchase of health care goods or services from a third party
provider, and which is not evidence of insurance coverage, unless:
(A) the discount is authorized under an agreement
between the seller of the card and the provider of those goods and
services or the discount or card is offered to members of the
seller;
(B) the seller does not represent that the card
provides insurance coverage of any kind; and
(C) the discount is not false, misleading, or
deceptive;
(19) using or employing a chain referral sales plan in
connection with the sale or offer to sell of goods, merchandise, or
anything of value, which uses the sales technique, plan,
arrangement, or agreement in which the buyer or prospective buyer
is offered the opportunity to purchase merchandise or goods and in
connection with the purchase receives the seller's promise or
representation that the buyer shall have the right to receive
compensation or consideration in any form for furnishing to the
seller the names of other prospective buyers if receipt of the
compensation or consideration is contingent upon the occurrence of
an event subsequent to the time the buyer purchases the merchandise
or goods;
(20) representing that a guarantee or warranty confers
or involves rights or remedies which it does not have or involve,
provided, however, that nothing in this subchapter shall be
construed to expand the implied warranty of merchantability as
defined in Sections 2.314 through 2.318 and Sections 2A.212 through
2A.216 to involve obligations in excess of those which are
appropriate to the goods;
(21) promoting a pyramid promotional scheme, as
defined by Section 17.461;
(22) representing that work or services have been
performed on, or parts replaced in, goods when the work or services
were not performed or the parts replaced;
(23) filing suit founded upon a written contractual
obligation of and signed by the defendant to pay money arising out
of or based on a consumer transaction for goods, services, loans, or
extensions of credit intended primarily for personal, family,
household, or agricultural use in any county other than in the
county in which the defendant resides at the time of the
commencement of the action or in the county in which the defendant
in fact signed the contract; provided, however, that a violation of
this subsection shall not occur where it is shown by the person
filing such suit he neither knew or had reason to know that the
county in which such suit was filed was neither the county in which
the defendant resides at the commencement of the suit nor the county
in which the defendant in fact signed the contract;
(24) failing to disclose information concerning goods
or services which was known at the time of the transaction if such
failure to disclose such information was intended to induce the
consumer into a transaction into which the consumer would not have
entered had the information been disclosed;
(25) using the term "corporation," "incorporated," or
an abbreviation of either of those terms in the name of a business
entity that is not incorporated under the laws of this state or
another jurisdiction;
(26) selling, offering to sell, or illegally promoting
an annuity contract under Chapter 22 (S.B. 17), Acts of the 57th
Legislature, 3rd Called Session, 1962 (Article 6228a-5, Vernon's
Texas Civil Statutes), with the intent that the annuity contract
will be the subject of a salary reduction agreement, as defined by
that Act, if the annuity contract is not an eligible qualified
investment under that Act or is not registered with the Teacher
Retirement System of Texas as required by Section 8A of that Act;
[or]
(27) taking advantage of a disaster declared by the
governor under Chapter 418, Government Code, by:
(A) selling or leasing fuel, food, medicine, or
another necessity at an exorbitant or excessive price; or
(B) demanding an exorbitant or excessive price in
connection with the sale or lease of fuel, food, medicine, or
another necessity;
(28) making false or misleading statements of fact in
inducing or attempting to induce a homeowner to enter into a
foreclosure consulting contract that does not comply with Chapter
50, Property Code; or
(29) making false or misleading statements of material
fact concerning the sale of a residence in foreclosure to the equity
purchaser under Chapter 50, Property Code, including a statement
regarding:
(A) the value of a residence in foreclosure;
(B) the amount of proceeds a homeowner will
receive after a foreclosure sale;
(C) a contract term;
(D) a homeowner's rights or obligations incident
to or arising out of a sale transaction; or
(E) the nature of a document that an equity
purchaser induces a homeowner to sign.
SECTION 3. The changes in law made by this Act apply to a
foreclosure consulting or equity purchase contract entered into on
or after the effective date of this Act. A foreclosure consulting
or equity purchase contract entered into before the effective date
of this Act is governed by the law in effect on the date the contract
was entered into, and the former law is continued in effect for that
purpose.
SECTION 4. This Act takes effect September 1, 2011.