Texas 2017 - 85th Regular

Texas House Bill HB2656 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New	Differences
1	1	85R25947 EES-F
2	2	By: Longoria H.B. No. 2656
3	3	Substitute the following for H.B. No. 2656:
4	4	By: Stephenson C.S.H.B. No. 2656
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to the regulation of residential mortgage loan companies,
10	10	including the registration of mortgage lot lender companies;
11	11	authorizing a fee.
12	12	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
13	13	SECTION 1. Section 156.002, Finance Code, is amended by
14	14	adding Subdivision (8-b) and amending Subdivisions (10-b) and (13)
15	15	to read as follows:
16	16	(8-b) "Mortgage lot lender company" means a
17	17	corporation, company, partnership, or sole proprietorship that
18	18	engages in the business of residential mortgage loan origination on
19	19	residential real estate located in this state on which no dwelling
20	20	is constructed to purchasers of the residential real estate for all
21	21	or part of the purchase price of the residential real estate against
22	22	which the mortgage is secured.
23	23	(10-b) "Qualifying individual" means an individual
24	24	who is:
25	25	(A) except as provided by Section
26	26	156.2045(a)(3), licensed under Chapter 157 as a residential
27	27	mortgage loan originator; and
28	28	(B) designated by a residential mortgage loan
29	29	company as the company's representative.
30	30	(13) "Residential mortgage loan company" means a
31	31	person, other than an individual, that engages in the business of
32	32	residential mortgage loan origination on residential real estate
33	33	located in this state. The term includes a credit union subsidiary
34	34	organization, auxiliary mortgage loan activity company, mortgage
35	35	company, independent contractor loan processor or underwriter
36	36	company, mortgage lot lender company, and financial services
37	37	company.
38	38	SECTION 2. Section 156.201, Finance Code, is amended to
39	39	read as follows:
40	40	Sec. 156.201. LICENSES REQUIRED. (a) A person may not act
41	41	in the capacity of, engage in the business of, or advertise or hold
42	42	that person out as engaging in or conducting the business of a
43	43	residential mortgage loan company in this state unless the person
44	44	holds an active residential mortgage loan company license, is
45	45	registered under Section 156.2012, is registered under Section
46	46	156.2045, or is exempt under Section 156.202.
47	47	(c) Each residential mortgage loan company and the
48	48	company's qualifying individual are [licensed under Chapter 157 is]
49	49	responsible to the commissioner and members of the public for any
50	50	act or conduct performed by the residential mortgage loan
51	51	originator sponsored by or acting for the residential mortgage loan
52	52	company in connection with:
53	53	(1) the origination of a residential mortgage loan; or
54	54	(2) a transaction that is related to the origination
55	55	of a residential mortgage loan in which the qualifying individual
56	56	knew or should have known of the transaction.
57	57	SECTION 3. Section 156.202(a-1), Finance Code, is amended
58	58	to read as follows:
59	59	(a-1) The following entities are exempt from this chapter:
60	60	(1) a nonprofit organization:
61	61	(A) providing self-help housing that originates
62	62	zero interest residential mortgage loans for borrowers who have
63	63	provided part of the labor to construct the dwelling securing the
64	64	loan; or
65	65	(B) that has designation as a Section 501(c)(3)
66	66	organization by the Internal Revenue Service and originates
67	67	residential mortgage loans for borrowers who, through a self-help
68	68	program, have provided at least 200 labor hours or 65 percent of the
69	69	labor to construct the dwelling securing the loan;
70	70	(2) a mortgage banker registered under Chapter 157;
71	71	(3) any owner of residential real estate who in any
72	72	12-consecutive-month period makes no more than five residential
73	73	mortgage loans to purchasers of the residential real estate
74	74	[property] for all or part of the purchase price of the residential
75	75	real estate against which the mortgage is secured; and
76	76	(4) an entity that is:
77	77	(A) a depository institution;
78	78	(B) a subsidiary of a depository institution that
79	79	is:
80	80	(i) owned and controlled by the depository
81	81	institution; and
82	82	(ii) regulated by a federal banking agency;
83	83	or
84	84	(C) an institution regulated by the Farm Credit
85	85	Administration.
86	86	SECTION 4. Section 156.203, Finance Code, is amended by
87	87	adding Subsection (a-3) to read as follows:
88	88	(a-3) An application for a mortgage lot lender company
89	89	registration under Section 156.2045 must be:
90	90	(1) in writing;
91	91	(2) under oath; and
92	92	(3) on the form prescribed by the commissioner.
93	93	SECTION 5. Subchapter C, Chapter 156, Finance Code, is
94	94	amended by adding Section 156.2045 to read as follows:
95	95	Sec. 156.2045. QUALIFICATIONS AND REQUIREMENTS FOR
96	96	REGISTRATION: MORTGAGE LOT LENDER COMPANY. (a) To be registered as
97	97	a mortgage lot lender company, an applicant must:
98	98	(1) submit a completed application together with the
99	99	payment of applicable fees through the Nationwide Mortgage
100	100	Licensing System and Registry;
101	101	(2) designate control persons for the company through
102	102	the Nationwide Mortgage Licensing System and Registry;
103	103	(3) designate an individual as the company's
104	104	qualifying individual who is either:
105	105	(A) an owner, officer, or partner of the company;
106	106	or
107	107	(B) a residential mortgage loan originator who is
108	108	licensed under Chapter 157;
109	109	(4) properly sponsor one or more residential mortgage
110	110	loan originators who are licensed under Chapter 157;
111	111	(5) not be in violation of this chapter, a rule adopted
112	112	under this chapter, or any order previously issued by the
113	113	commissioner to the applicant;
114	114	(6) have the company name or assumed name properly
115	115	filed with either the secretary of state or the appropriate county
116	116	clerk's office;
117	117	(7) maintain a physical office in this state; and
118	118	(8) provide any other information required by the
119	119	commissioner.
120	120	(b) If the commissioner determines that a person has met the
121	121	requirements of Subsection (a), the commissioner shall issue a
122	122	registration to the person. The registration is valid for one year,
123	123	expires on December 31 of each year, and must be renewed annually by
124	124	meeting the requirements under Subsection (a) and paying a renewal
125	125	fee in an amount not to exceed $500. A person must renew an expired
126	126	registration in the manner determined by the commissioner.
127	127	(c) A registered mortgage lot lender company is subject to
128	128	Subchapters D and E as if the company were licensed as a residential
129	129	mortgage loan company.
130	130	SECTION 6. As soon as practicable after the effective date
131	131	of this Act, the Finance Commission of Texas shall adopt the rules
132	132	necessary to implement the changes in law made by this Act, and the
133	133	savings and mortgage lending commissioner shall begin registering
134	134	persons as mortgage lot lender companies as required by Section
135	135	156.2045, Finance Code, as added by this Act.
136	136	SECTION 7. This Act takes effect September 1, 2017.