82R9071 TRH-F
By: Thompson H.B. No. 2713
A BILL TO BE ENTITLED
AN ACT
relating to refinancing low-rate home loans involving natural
disaster recovery funds.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter B, Chapter 343, Finance Code, is
amended by adding Section 343.1011 to read as follows:
Sec. 343.1011. REFINANCING OF LOAN MADE WITH DISASTER
RECOVERY FUNDS. (a) For purposes of this section, a low-rate home
loan, including an open-end account and notwithstanding Section
343.002, is a home loan that at its inception carries an interest
rate two percentage points or more below the yield on treasury
securities having comparable periods of maturity to the loan
maturity, except that if the loan's interest rate is subject to
change, the maximum rate that may be charged at any time during the
loan shall be used instead of the rate at the loan's inception to
determine whether the loan is a low-rate home loan.
(b) A lender may not refinance, replace, or consolidate a
low-rate home loan directly made by a government or nonprofit
lender wholly or partly using or funded by community development
block grant disaster recovery funds before the seventh anniversary
of the date of the loan unless the new or consolidated loan has a
lower interest rate and requires payment of a lesser amount of
points and fees than the original loan or is a restructure to avoid
foreclosure.
(c) In addition to other remedies provided by law, a lien
does not attach to real property that is based on a loan made in
violation of this section.
SECTION 2. The changes in law made by this Act apply only to
a loan closed on or after the effective date of this Act. A loan
closed before the effective date of this Act is governed by the law
in effect when the loan was closed, and the former law is continued
in effect for that purpose.
SECTION 3. This Act takes effect September 1, 2011.