Texas House Bill HB2385

Texas 2017 - 85th Regular

Caption

Relating to benefits offered to purchasers by builders of new residences.

Impact

The implementation of HB2385 will directly affect how builders conduct business, especially regarding their relationships with lenders and title companies. By prohibiting builders from tying benefits to the use of specific lenders or title companies, the bill is intended to diminish undue influence and potentially coercive practices that could disadvantage home buyers. This measure has significant implications for both builders and consumers, as it aims to level the playing field in terms of financial choices available to purchasers of new homes.

Summary

House Bill 2385 aims to address and prohibit certain practices by builders of new residences concerning the benefits they offer purchasers related to residential mortgage loans and title insurance. Specifically, it makes it illegal for builders to provide benefits or incentives conditioned on the use of specific preferred lenders or title companies for transactions involving new home purchases. This legislation seeks to create a more transparent and fair marketplace for consumers in the residential real estate sector.

Contention

While HB2385 is framed as a consumer protection bill, there may be differing opinions among stakeholders about its necessity and potential consequences. Builders might argue that such limitations could inhibit their ability to negotiate beneficial terms with lenders and title companies, ultimately increasing costs. Conversely, consumer advocates may contend that this legislation is essential to protecting home buyers from conflicts of interest and ensuring they have access to fair lending practices without being influenced by builders’ preferential arrangements.