Texas House Bill HB3140

Texas 2019 - 86th Regular

Caption

Relating to the regulation of residential mortgage loan companies, including requiring the registration of mortgage lot lender companies; imposing a fee.

Impact

The introduction of HB3140 is expected to enhance consumer protection by establishing clear regulatory standards for mortgage lot lenders. This includes mandating that these companies hold an active registration with the appropriate authorities, thus facilitating better monitoring of mortgage lending practices. It enables the Finance Commission of Texas to implement necessary rules to uphold the integrity of the mortgage lending process, potentially reducing the risk of predatory lending and securing the interests of new home buyers.

Summary

House Bill 3140 addresses the regulation of residential mortgage loan companies in the state of Texas. The primary focus of the bill is to establish a registration requirement for mortgage lot lender companies, which are defined as entities engaging in the business of originating residential mortgage loans specifically on lots without existing dwellings. The bill aims to instigate a framework that ensures oversight and accountability among these lenders while providing a structured mechanism for operation within state law.

Contention

While HB3140 maintains significant support for its long-term objective of upholding consumer rights, there are concerns among some stakeholders about the implications of fees associated with registration and ongoing compliance. Critics argue that the imposition of fees could potentially hinder smaller mortgage lot lender companies, leading to reduced competition in the market. Additionally, there are worries that the regulatory burden might discourage new entrants into the residential mortgage lending space, thus impacting overall market accessibility for consumers seeking mortgage options.