Texas Senate Bill SB1124

Texas 2011 - 82nd Regular

• Introduced: 3/3/11
• Out of Senate Committee: 3/24/11
• Voted on by Senate: 3/31/11
• Refer: 3/16/11
• Out of House Committee: 5/2/11
• Report Pass: 3/24/11
• Voted on by House: 5/23/11
• Engrossed: 3/31/11
• Governor Action: 6/17/11
• Refer: 4/11/11
• Report Pass: 4/28/11
• Enrolled: 5/26/11
• Passed: 6/17/11

Caption

Relating to licensing and regulation of certain persons involved in residential mortgage lending pursuant to the Texas Secure and Fair Enforcement for Mortgage Licensing Act of 2009; providing penalties.

Impact

The proposed changes are significant for the residential mortgage industry in Texas as they aim to enhance accountability and consumer protection in mortgage lending practices. By establishing a recovery fund, the bill provides a mechanism for addressing grievances and offers financial recourse for consumers who might otherwise have no means to recover their losses. This can lead to a more regulated and secure lending environment, which is beneficial for both consumers and legitimate mortgage originators.

Summary

SB1124 aims to amend the Texas Secure and Fair Enforcement for Mortgage Licensing Act of 2009, specifically focusing on the licensing and regulation of residential mortgage lenders. The bill establishes the framework for a recovery fund that protects consumers who suffer damages due to wrongful actions by licensed mortgage originators. This fund will act as a financial safeguard by providing reimbursement for losses incurred by loan applicants as a direct consequence of violations committed by mortgage loan originators.

Contention

Notably, one of the points of contention surrounding SB1124 may involve the balance between protecting consumers and imposing burdensome regulations on mortgage lenders. Advocates argue that the legislation strengthens oversight and helps ensure ethical practices in lending, while opponents may express concerns over the administrative complexities and costs associated with maintaining the recovery fund and the potential impact on smaller mortgage businesses. Overall, this bill represents an effort to align state laws with best practices in residential lending.