85R25947 EES-F
By: Longoria H.B. No. 2656
Substitute the following for H.B. No. 2656:
By: Stephenson C.S.H.B. No. 2656
A BILL TO BE ENTITLED
AN ACT
relating to the regulation of residential mortgage loan companies,
including the registration of mortgage lot lender companies;
authorizing a fee.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 156.002, Finance Code, is amended by
adding Subdivision (8-b) and amending Subdivisions (10-b) and (13)
to read as follows:
(8-b) "Mortgage lot lender company" means a
corporation, company, partnership, or sole proprietorship that
engages in the business of residential mortgage loan origination on
residential real estate located in this state on which no dwelling
is constructed to purchasers of the residential real estate for all
or part of the purchase price of the residential real estate against
which the mortgage is secured.
(10-b) "Qualifying individual" means an individual
who is:
(A) except as provided by Section
156.2045(a)(3), licensed under Chapter 157 as a residential
mortgage loan originator; and
(B) designated by a residential mortgage loan
company as the company's representative.
(13) "Residential mortgage loan company" means a
person, other than an individual, that engages in the business of
residential mortgage loan origination on residential real estate
located in this state. The term includes a credit union subsidiary
organization, auxiliary mortgage loan activity company, mortgage
company, independent contractor loan processor or underwriter
company, mortgage lot lender company, and financial services
company.
SECTION 2. Section 156.201, Finance Code, is amended to
read as follows:
Sec. 156.201. LICENSES REQUIRED. (a) A person may not act
in the capacity of, engage in the business of, or advertise or hold
that person out as engaging in or conducting the business of a
residential mortgage loan company in this state unless the person
holds an active residential mortgage loan company license, is
registered under Section 156.2012, is registered under Section
156.2045, or is exempt under Section 156.202.
(c) Each residential mortgage loan company and the
company's qualifying individual are [licensed under Chapter 157 is]
responsible to the commissioner and members of the public for any
act or conduct performed by the residential mortgage loan
originator sponsored by or acting for the residential mortgage loan
company in connection with:
(1) the origination of a residential mortgage loan; or
(2) a transaction that is related to the origination
of a residential mortgage loan in which the qualifying individual
knew or should have known of the transaction.
SECTION 3. Section 156.202(a-1), Finance Code, is amended
to read as follows:
(a-1) The following entities are exempt from this chapter:
(1) a nonprofit organization:
(A) providing self-help housing that originates
zero interest residential mortgage loans for borrowers who have
provided part of the labor to construct the dwelling securing the
loan; or
(B) that has designation as a Section 501(c)(3)
organization by the Internal Revenue Service and originates
residential mortgage loans for borrowers who, through a self-help
program, have provided at least 200 labor hours or 65 percent of the
labor to construct the dwelling securing the loan;
(2) a mortgage banker registered under Chapter 157;
(3) any owner of residential real estate who in any
12-consecutive-month period makes no more than five residential
mortgage loans to purchasers of the residential real estate
[property] for all or part of the purchase price of the residential
real estate against which the mortgage is secured; and
(4) an entity that is:
(A) a depository institution;
(B) a subsidiary of a depository institution that
is:
(i) owned and controlled by the depository
institution; and
(ii) regulated by a federal banking agency;
or
(C) an institution regulated by the Farm Credit
Administration.
SECTION 4. Section 156.203, Finance Code, is amended by
adding Subsection (a-3) to read as follows:
(a-3) An application for a mortgage lot lender company
registration under Section 156.2045 must be:
(1) in writing;
(2) under oath; and
(3) on the form prescribed by the commissioner.
SECTION 5. Subchapter C, Chapter 156, Finance Code, is
amended by adding Section 156.2045 to read as follows:
Sec. 156.2045. QUALIFICATIONS AND REQUIREMENTS FOR
REGISTRATION: MORTGAGE LOT LENDER COMPANY. (a) To be registered as
a mortgage lot lender company, an applicant must:
(1) submit a completed application together with the
payment of applicable fees through the Nationwide Mortgage
Licensing System and Registry;
(2) designate control persons for the company through
the Nationwide Mortgage Licensing System and Registry;
(3) designate an individual as the company's
qualifying individual who is either:
(A) an owner, officer, or partner of the company;
or
(B) a residential mortgage loan originator who is
licensed under Chapter 157;
(4) properly sponsor one or more residential mortgage
loan originators who are licensed under Chapter 157;
(5) not be in violation of this chapter, a rule adopted
under this chapter, or any order previously issued by the
commissioner to the applicant;
(6) have the company name or assumed name properly
filed with either the secretary of state or the appropriate county
clerk's office;
(7) maintain a physical office in this state; and
(8) provide any other information required by the
commissioner.
(b) If the commissioner determines that a person has met the
requirements of Subsection (a), the commissioner shall issue a
registration to the person. The registration is valid for one year,
expires on December 31 of each year, and must be renewed annually by
meeting the requirements under Subsection (a) and paying a renewal
fee in an amount not to exceed $500. A person must renew an expired
registration in the manner determined by the commissioner.
(c) A registered mortgage lot lender company is subject to
Subchapters D and E as if the company were licensed as a residential
mortgage loan company.
SECTION 6. As soon as practicable after the effective date
of this Act, the Finance Commission of Texas shall adopt the rules
necessary to implement the changes in law made by this Act, and the
savings and mortgage lending commissioner shall begin registering
persons as mortgage lot lender companies as required by Section
156.2045, Finance Code, as added by this Act.
SECTION 7. This Act takes effect September 1, 2017.