| 1 | 1 | | By: Zaffirini S.B. No. 1431 |
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| 2 | 2 | | |
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| 3 | 3 | | |
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| 4 | 4 | | A BILL TO BE ENTITLED |
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| 5 | 5 | | AN ACT |
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| 6 | 6 | | relating to escrow payments for a loan secured by a new dwelling. |
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| 7 | 7 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 8 | 8 | | SECTION 1. Subchapter B, Chapter 343, Finance Code, is |
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| 9 | 9 | | amended by adding Section 343.107 to read as follows: |
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| 10 | 10 | | Sec. 343.107. DETERMINATION OF INITIAL AMOUNT OF ESCROW |
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| 11 | 11 | | PAYMENTS ON LOAN SECURED BY NEW DWELLING. (a) In this section, |
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| 12 | 12 | | "mortgage servicer" has the meaning assigned by Section 51.0001, |
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| 13 | 13 | | Property Code. |
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| 14 | 14 | | (b) This section applies only to a home loan secured by real |
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| 15 | 15 | | property on which a dwelling has been constructed that is not |
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| 16 | 16 | | included on the appraisal roll of the appraisal district that |
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| 17 | 17 | | appraises the property for ad valorem tax purposes because the |
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| 18 | 18 | | dwelling is a new improvement. |
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| 19 | 19 | | (c) Subject to 12 C.F.R. Section 1024.17, if an escrow |
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| 20 | 20 | | account is created for the home loan, the lender or mortgage |
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| 21 | 21 | | servicer, as applicable, shall make a good-faith effort to ensure |
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| 22 | 22 | | that the amount the borrower is initially required to pay into the |
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| 23 | 23 | | escrow account for purposes of payment of the ad valorem taxes |
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| 24 | 24 | | imposed on the property is reasonably likely to be sufficient to pay |
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| 25 | 25 | | the taxes based on all available evidence, including the probable |
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| 26 | 26 | | effect of the newly constructed dwelling on the appraised value, |
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| 27 | 27 | | and the market value of comparable improved residential properties |
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| 28 | 28 | | in the market area as determined by the appraisal districts that |
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| 29 | 29 | | appraise those properties for ad valorem tax purposes as |
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| 30 | 30 | | applicable. |
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| 31 | 31 | | (d) A lender or mortgage servicer's failure to ensure that |
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| 32 | 32 | | the amount paid into escrow is sufficient to pay the taxes as |
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| 33 | 33 | | described by Subsection (c) does not affect the lender or mortgage |
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| 34 | 34 | | servicer's security interest in the real property that secures the |
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| 35 | 35 | | home loan. |
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| 36 | 36 | | (e) This section does not create a cause of action. |
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| 37 | 37 | | SECTION 2. The change in law made by this Act applies to a |
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| 38 | 38 | | loan closed on or after the effective date of this Act. A loan |
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| 39 | 39 | | closed before the effective date of this Act is governed by the law |
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| 40 | 40 | | in effect when the loan was closed, and the former law is continued |
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| 41 | 41 | | in effect for that purpose. |
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| 42 | 42 | | SECTION 3. This Act takes effect September 1, 2017. |
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