Texas 2017 - 85th Regular

Texas Senate Bill SB1995 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	85R6268 AJA-F
2	2	By: Watson, Rodríguez, Zaffirini S.B. No. 1995
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to disclosures in connection with certain wrap mortgage
8	8	loan transactions; providing a criminal penalty.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Subtitle E, Title 3, Finance Code, is amended by
11	11	adding Chapter 160 to read as follows:
12	12	CHAPTER 160. RESIDENTIAL WRAP MORTGAGE LOAN FINANCING
13	13	SUBCHAPTER A. GENERAL PROVISIONS
14	14	Sec. 160.001. DEFINITIONS. In this chapter:
15	15	(1) "Residential mortgage loan" and "residential real
16	16	estate" have the meanings assigned by Section 180.002.
17	17	(2) "Wrap borrower" means a person obligated to pay a
18	18	wrap mortgage loan.
19	19	(3) "Wrap lender" means a person who makes a wrap
20	20	mortgage loan.
21	21	(4) "Wrap mortgage loan" means a residential mortgage
22	22	loan:
23	23	(A) made to finance the purchase of residential
24	24	real estate that will continue to be subject to an unreleased lien
25	25	that:
26	26	(i) attached to the residential real estate
27	27	before the loan was made; and
28	28	(ii) secures a debt incurred by a person
29	29	other than the wrap borrower that was not paid off at the time the
30	30	loan was made; and
31	31	(B) obligating the wrap borrower to the wrap
32	32	lender for payment of a debt the principal amount of which includes:
33	33	(i) the outstanding balance of the debt
34	34	described by Paragraph (A)(ii); and
35	35	(ii) any remaining amount of the purchase
36	36	price financed by the wrap lender.
37	37	SUBCHAPTER B. DISCLOSURE REQUIREMENTS
38	38	Sec. 160.051. DISCLOSURE STATEMENT. (a) A wrap lender not
39	39	otherwise required to provide a written disclosure statement to the
40	40	wrap borrower under Section 5.016, Property Code, must, on or
41	41	before the seventh day before the wrap mortgage loan agreement is
42	42	entered into, provide to the wrap borrower and each holder of a lien
43	43	described by Section 160.001(4)(A), a separate written disclosure
44	44	statement in at least 12-point type that contains the information
45	45	required for a written disclosure statement under Section 5.016,
46	46	Property Code.
47	47	(b) Regardless of whether the wrap lender provides a written
48	48	disclosure statement under Subsection (a) or under Section 5.016,
49	49	Property Code, the wrap lender's disclosure statement to the wrap
50	50	borrower must include a statement in a form substantially similar
51	51	to the following:
52	52	NOTICE REGARDING PROPERTY INSURANCE: ANY INSURANCE MAINTAINED BY A
53	53	SELLER, LENDER, OR OTHER PERSON WHO IS NOT THE BUYER OF THIS
54	54	PROPERTY MAY NOT PROVIDE COVERAGE TO THE BUYER IF THE BUYER SUFFERS
55	55	A LOSS OR INCURS LIABILITY IN CONNECTION WITH THE PROPERTY. TO
56	56	ENSURE THE BUYER'S INTERESTS ARE PROTECTED, THE BUYER SHOULD
57	57	PURCHASE THE BUYER'S OWN PROPERTY INSURANCE. BEFORE PURCHASING
58	58	THIS PROPERTY, YOU MAY WISH TO CONSULT AN INSURANCE AGENT REGARDING
59	59	THE INSURANCE COVERAGE AVAILABLE TO YOU AS A BUYER OF THE PROPERTY.
60	60	Sec. 160.052. RECORD OF DISCLOSURE. A wrap lender must
61	61	retain a copy of a disclosure statement provided under Section
62	62	160.051 until the first anniversary of the earliest date on which
63	63	all liens described by Section 160.001(4)(A) are released.
64	64	Sec. 160.053. FOREIGN LANGUAGE REQUIREMENT. Regardless of
65	65	whether the wrap lender provides a written disclosure statement
66	66	under Section 160.051 or under Section 5.016, Property Code, if the
67	67	negotiations that precede the execution of the wrap mortgage loan
68	68	agreement are conducted primarily in a language other than English,
69	69	the wrap lender shall provide a copy of the required disclosure
70	70	statement in that language to the wrap borrower.
71	71	Sec. 160.054. FAILURE TO PROVIDE DISCLOSURE: TOLLING OF
72	72	LIMITATIONS. If a wrap lender fails to provide the disclosure
73	73	statement as required by Section 160.051 or fails to provide the
74	74	disclosure statement in the language required by Section 160.053,
75	75	the limitations period applicable to any cause of action of the wrap
76	76	borrower against the wrap lender arising out of the wrap lender's
77	77	violation of a law of this state in connection with the wrap
78	78	mortgage loan transaction is tolled until the 120th day after the
79	79	date the required disclosure statement is provided.
80	80	Sec. 160.055. FAILURE TO PROVIDE NOTICE: OFFENSE. (a) A
81	81	wrap lender commits an offense if the wrap lender fails to provide a
82	82	written disclosure statement under Section 160.051 or Section
83	83	5.016, Property Code, that meets the requirements of this chapter
84	84	and Section 5.016, Property Code, as applicable.
85	85	(b) An offense under this section is a Class A misdemeanor.
86	86	SECTION 2. Chapter 160, Finance Code, as added by this Act,
87	87	applies only to a wrap mortgage loan made on or after the effective
88	88	date of this Act.
89	89	SECTION 3. This Act takes effect September 1, 2017.