By: Clardy H.B. No. 4328
A BILL TO BE ENTITLED
AN ACT
relating to certain property tax lenders, property tax loans, and
tax liens.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 32.06, Tax Code, is amended by amending
Subsections (a-2), (d), (f-1), and (h) to read as follows:
(a-2) Except as provided by Subsection (a-8), a tax lien may
be transferred to the person who pays the taxes on behalf of the
property owner under the authorization described by Subsection
(a-1) for:
(1) taxes that are delinquent at the time of payment;
or
(2) taxes that are due but not delinquent at the time
of payment if the property:
(A) is not subject to a recorded mortgage lien;
or
(B) is subject to a recorded mortgage lien
provided the person who pays the taxes on behalf of the property
owner under the authorization pays the taxes not earlier than
January 31st of the year following the year in which the taxes were
imposed.
(d) A transferee shall record [a tax lien transferred as
provided by this section with] the certified statement attesting to
the transfer of the tax lien as described by Subsection (b) in the
deed records of each county in which the property encumbered by the
lien is located. The transferee is not required to record in the
deed records of a county the sworn document filed under Subsection
(a-1)(1), but the transferee shall retain a copy of that sworn
document in its records.
(f-1) If an obligation secured by a preexisting first lien
on the property is delinquent for at least 90 consecutive days and
the obligation has been referred to a collection specialist, the
mortgage servicer or the holder of the first lien may send a notice
of the delinquency to the transferee of a tax lien. The mortgage
servicer or the first lienholder is entitled, within six months
after the date on which that notice is sent, to obtain a release of
the transferred tax lien by paying the transferee of the tax lien
the amount of the unpaid principal, fees, and interest owed under
the contract between the property owner and the transferee that are
directly attributable to the property taxes paid by the transferee
or the transferee's predecessor in interest on the specific real
property subject to the preexisting first lien. The Finance
Commission of Texas by rule shall prescribe the form and content of
the notice under this subsection.
(h) A mortgage servicer who pays a property tax loan secured
by a tax lien transferred under this section becomes subrogated to
all rights in the lien. A tax lien transferee who pays the amount
owed under an existing property tax loan of another property tax
lender becomes subrogated to all rights in the tax lien if;
(1) the existing property tax lender executes an
assignment of the tax lien; and
(2) the assignment is recorded in the deed records of
each county in which the property encumbered by the lien is located.
SECTION 2. Section 351.0021(a), Finance Code, is amended to
read as follows:
(a) The contract between a property tax lender and a
property owner may require the property owner to pay the following
costs after closing:
(1) a reasonable fee for filing the release of a tax
lien authorized under Section 32.06(b), Tax Code;
(2) a reasonable fee for a payoff statement authorized
under Section 32.06(f-3), Tax Code;
(3) a reasonable fee for providing information
regarding the current balance owed by the property owner authorized
under Section 32.06(g), Tax Code;
(4) reasonable and necessary attorney's fees,
recording fees, and court costs for actions that are legally
required to respond to a suit filed under Chapter 33, Tax Code, [or]
to perform a foreclosure, or in the collection of a delinquent loan,
including fees required to be paid to an official and fees for an
attorney ad litem;
(5) to the extent permitted by the United States
Bankruptcy Code, attorney's fees and court costs for services
performed after the property owner files a voluntary bankruptcy
petition;
(6) a reasonable fee for title examination and
preparation of an abstract of title by an attorney, a title company,
or a property search company authorized to do business in this
state;
(7) a processing fee for insufficient funds, as
authorized under Section 3.506, Business & Commerce Code;
(8) a fee for collateral protection insurance, as
authorized under Chapter 307;
(9) a prepayment penalty, unless the lien transferred
is on residential property owned and used by the property owner for
personal, family, or household purposes;
(10) recording expenses incurred in connection with a
modification necessary to preserve a borrower's ability to avoid a
foreclosure proceeding; and
(11) fees for copies of transaction documents
requested by the property owner.
SECTION 3. Subchapter A, Chapter 351, Finance Code, is
amended by adding Section 351.0024 to read as follows:
Sec. 351.0024. AFFILIATION WITH LEGAL SERVICES PROVIDER. A
property tax lender may not, and an owner, employee, or agent of a
property tax lender may not, have an economic or beneficial
interest in, or receive any form of consideration other than the
provision of legal services directly or indirectly from, an
individual or entity that provides legal services to the property
tax lender relating to loan document production or review, loan
servicing, loan enforcement, loan foreclosure, or the collection of
the loan.
SECTION 4. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2019.