82R28225 KFF-D
By: Lucio, et al. S.B. No. 1319
(Oliveira, Truitt)
Substitute the following for S.B. No. 1319: No.
A BILL TO BE ENTITLED
AN ACT
relating to certain loans secured by a lien on residential real
property and to other transactions involving residential real
property; providing civil penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Title 5, Finance Code, is amended by adding
Chapter 397 to read as follows:
CHAPTER 397. INFORMATION FURNISHED BY RESIDENTIAL MORTGAGE
SERVICERS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 397.001. DEFINITION. In this chapter, "mortgage
servicer" has the meaning assigned by Section 51.0001, Property
Code.
Sec. 397.002. APPLICABILITY. (a) This chapter applies
only to a loan secured by a first or subordinate lien on residential
real property that is not:
(1) a federally related mortgage loan, as defined by
12 U.S.C. Section 2602;
(2) a loan that is made by a credit union regulated by
the Credit Union Department; or
(3) a loan that is primarily for business, commercial,
or agricultural purposes, or for temporary financing, such as a
construction loan, as referred to under 12 U.S.C. Section 2602.
(b) This chapter does not apply to a loan if the mortgage
servicer is a natural person who is related to the borrower within
the second degree by consanguinity or affinity, as determined under
Subchapter B, Chapter 573, Government Code.
[Sections 397.003-397.050 reserved for expansion]
SUBCHAPTER B. BORROWER REQUESTS FOR INFORMATION
Sec. 397.051. RULES. The Finance Commission of Texas may
adopt rules necessary to implement this subchapter.
Sec. 397.052. RECEIPTS FOR PAYMENTS BY BORROWERS. At the
request of a borrower, a mortgage servicer shall provide a receipt
to the borrower each time the mortgage servicer accepts payment
from the borrower. The receipt must clearly and conspicuously
state:
(1) the amount received by the mortgage servicer as
payment toward the loan; and
(2) how the amount described by Subdivision (1) was
applied to the borrower's account.
Sec. 397.053. ANNUAL ACCOUNTING STATEMENT. A mortgage
servicer shall provide to the borrower an annual statement in
January of each year for the term of the loan. The statement must
clearly and conspicuously state the following information:
(1) the amount of each payment that was received by the
mortgage servicer as payment toward the loan during the preceding
calendar year;
(2) how each payment described by Subdivision (1) was
applied to the borrower's account, including a statement of the
amount of each payment that was applied to:
(A) the borrower's principal obligation under
the loan;
(B) the interest charged on the loan;
(C) any escrow or suspense account associated
with the loan; and
(D) any fee or other charge assessed against the
borrower during the preceding calendar year; and
(3) the outstanding balance of the borrower's
principal obligation under the loan.
Sec. 397.054. PAYOFF STATEMENTS. (a) In this section,
"payoff statement" has the meaning assigned by Section 12.017,
Property Code.
(b) Except as provided by Subsection (c) and subject to
Subsection (d), a mortgage servicer may not charge a fee for
preparing or transmitting a payoff statement to a borrower or other
person requesting a payoff statement on behalf of the borrower.
(c) A mortgage servicer may charge a reasonable processing
fee to cover the cost of providing a payoff statement by facsimile
transmission or by a courier service if, before charging the fee,
the mortgage servicer discloses to the requestor that payoff
statements are available for free if the requestor requests that
the statement be provided in a manner that will not result in the
charging of a processing fee.
(d) After a mortgage servicer has provided two payoff
statements during a calendar year to or on behalf of a borrower
under Subsection (b) without charge, other than processing fees
authorized under Subsection (c), the mortgage servicer may charge a
reasonable fee for providing a payoff statement to or on behalf of
the borrower during the remainder of the calendar year.
(e) A mortgage servicer shall provide a payoff statement not
later than the 10th day after the date the lender receives the
request for the payoff statement from or on behalf of a borrower,
and the statement must be valid for a reasonable time after being
provided to the requestor.
Sec. 397.055. PROVISION OF INFORMATION REGARDING DISPUTE OR
ERROR. (a) A mortgage servicer shall provide a written statement
to a borrower in response to a borrower's written request for
information regarding a dispute or error involving the borrower's
account that includes the following information, if requested:
(1) whether the account is current and an explanation
of any default and the date the account went into default;
(2) the current balance due on the loan, including the
principal due, the amount of any funds held in a suspense account,
the amount of any escrow balance known to the servicer, and whether
there are any escrow deficiencies or shortages known to the
servicer;
(3) the identity, address, and other relevant
information about the current holder, owner, or assignee of the
loan; and
(4) the telephone number and mailing address of a
servicer representative with the information and authority to
answer questions and resolve disputes.
(b) A mortgage servicer must provide a statement under
Subsection (a) on or before the 10th day after the date the servicer
receives a written request from the borrower that:
(1) includes or otherwise enables the servicer to
identify the name and account of the borrower; and
(2) includes a statement that the account is or may be
in error or otherwise provides sufficient detail to the servicer
regarding information sought by the borrower.
[Sections 397.056-397.100 reserved for expansion]
SUBCHAPTER C. REMEDIES
Sec. 397.101. ENFORCEMENT GENERALLY. The Department of
Savings and Mortgage Lending, the attorney general, or any party to
a loan to which this chapter applies may enforce this chapter.
Sec. 397.102. ACTION BY BORROWER. In addition to any other
legal and equitable remedy available, a borrower injured by a
violation of this chapter may bring an action:
(1) for injunctive relief to require compliance with
this chapter; and
(2) to recover:
(A) actual damages, including reasonable
attorney's fees; and
(B) $500 for each violation of this chapter.
Sec. 397.103. ACTION BY ATTORNEY GENERAL. (a) The
attorney general may bring an action on behalf of the state:
(1) for injunctive relief to require compliance with
this chapter;
(2) to recover a civil penalty of $500 for each
violation of this chapter; or
(3) for both injunctive relief and to recover the
civil penalty.
(b) The attorney general is entitled to recover reasonable
expenses incurred in obtaining injunctive relief or a civil
penalty, or both, under this section, including court costs,
reasonable attorney's fees, and investigatory costs.
(c) The court may make such additional orders or judgments
as are necessary to compensate identifiable persons for actual
damages or to restore money or property, real or personal, that may
have been acquired by means of any violation of this chapter.
Damages may not include any damages incurred beyond a point two
years before the institution of the action by the attorney general.
Orders of the court may also include the appointment of a receiver
or a sequestration of assets if a person who has been ordered by a
court to make restitution under this section has failed to do so
within three months after the order to make restitution has become
final and nonappealable.
(d) In bringing or participating in an action under this
chapter, the attorney general acts in the name of the state and does
not establish an attorney-client relationship with another person,
including a person to whom the attorney general requests that the
court award relief.
SECTION 2. Title 2, Business & Commerce Code, is amended by
adding Chapter 21 to read as follows:
CHAPTER 21. EXECUTION OF DEEDS IN CERTAIN TRANSACTIONS INVOLVING
RESIDENTIAL REAL ESTATE
Sec. 21.001. DEFINITION. In this chapter, "residential
real estate" means real property on which a dwelling designed for
occupancy for one to four families is constructed or intended to be
constructed.
Sec. 21.002. PROHIBITION OF EXECUTION OF DEEDS CONVEYING
RESIDENTIAL REAL ESTATE IN CERTAIN TRANSACTIONS. (a) A seller of
residential real estate or a person who makes an extension of credit
and takes a security interest or mortgage against residential real
estate may not, before or at the time of the conveyance of the
residential real estate to the purchaser or the extension of credit
to the borrower, request or require the purchaser or borrower to
execute and deliver to the seller or person making the extension of
credit a deed conveying the residential real estate to the seller or
person making the extension of credit.
(b) A deed executed in violation of this section is voidable
unless a subsequent purchaser of the residential real estate, for
valuable consideration, obtains an interest in the property after
the deed was recorded without notice of the violation, including
notice provided by actual possession of the property by the grantor
of the deed. The residential real estate continues to be subject to
the security interest of a creditor who, without notice of the
violation, granted an extension of credit to a borrower based on the
deed executed in violation of this section.
(c) A purchaser or borrower must bring an action to void a
deed executed in violation of this section not later than the fourth
anniversary of the date the deed was recorded.
Sec. 21.003. CIVIL ACTION FOR DAMAGES. A person who
violates Section 21.002 is liable to the purchaser or borrower for:
(1) actual damages;
(2) exemplary damages in an amount equal to or greater
than $5,000 and not more than three times the amount of actual
damages;
(3) court costs; and
(4) reasonable attorney's fees.
SECTION 3. Section 24.004, Property Code, is amended to
read as follows:
Sec. 24.004. JURISDICTION; DISMISSAL. (a) Except as
provided by Subsection (b), a [A] justice court in the precinct in
which the real property is located has jurisdiction in eviction
suits. Eviction suits include forcible entry and detainer and
forcible detainer suits.
(b) A justice court does not have jurisdiction in a forcible
entry and detainer or forcible detainer suit and shall dismiss the
suit if the defendant files a sworn statement alleging the suit is
based on a deed executed in violation of Chapter 21, Business &
Commerce Code.
SECTION 4. This Act takes effect September 1, 2011.