Texas 2019 - 86th Regular

Texas Senate Bill SB42 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1		By: Zaffirini S.B. No. 42
	2	+	(In the Senate - Filed November 12, 2018; February 1, 2019,
	3	+	read first time and referred to Committee on Business & Commerce;
	4	+	April 8, 2019, reported adversely, with favorable Committee
	5	+	Substitute by the following vote: Yeas 9, Nays 0; April 8, 2019,
	6	+	sent to printer.)
	7	+	Click here to see the committee vote
	8	+	COMMITTEE SUBSTITUTE FOR S.B. No. 42 By: Zaffirini
2	9
3	10
4	11		A BILL TO BE ENTITLED
5	12		AN ACT
6	13		relating to residential mortgage loans, including the financing of
7	14		residential real estate purchases by means of a wrap mortgage loan;
8	15		providing licensing and registration requirements; authorizing an
9	16		administrative penalty.
10	17		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	18		SECTION 1. Section 156.202, Finance Code, is amended by
12	19		amending Subsection (a-1) and adding Subsection (b) to read as
13	20		follows:
14	21		(a-1) The following entities are exempt from this chapter:
15	22		(1) a nonprofit organization:
16	23		(A) providing self-help housing that originates
17	24		zero interest residential mortgage loans for borrowers who have
18	25		provided part of the labor to construct the dwelling securing the
19	26		loan; or
20	27		(B) that has designation as a Section 501(c)(3)
21	28		organization by the Internal Revenue Service and originates
22	29		residential mortgage loans for borrowers who, through a self-help
23	30		program, have provided at least 200 labor hours or 65 percent of the
24	31		labor to construct the dwelling securing the loan;
25	32		(2) a mortgage banker registered under Chapter 157;
26	33		(3) subject to Subsection (b), any owner of
27	34		residential real estate who in any 12-consecutive-month period
28	35		makes no more than five residential mortgage loans to purchasers of
29	36		the property for all or part of the purchase price of the
30	37		residential real estate against which the mortgage is secured; and
31	38		(4) an entity that is:
32	39		(A) a depository institution;
33	40		(B) a subsidiary of a depository institution that
34	41		is:
35	42		(i) owned and controlled by the depository
36	43		institution; and
37	44		(ii) regulated by a federal banking agency;
38	45		or
39	46		(C) an institution regulated by the Farm Credit
40	47		Administration.
41	48		(b) In determining eligibility for an exemption under
42	49		Subsection (a-1)(3), two or more owners of residential real estate
43	50		are considered a single owner for the purpose of computing the
44	51		number of mortgage loans made within the period specified by that
45	52		subdivision if any of the owners are affiliates, as defined by
46	53		Section 1.002(1), Business Organizations Code, or if any of the
47	54		owners have substantially common ownership, as determined by the
48	55		commissioner.
49	56		SECTION 2. Section 157.0121, Finance Code, is amended by
50	57		amending Subsection (c) and adding Subsection (f) to read as
51	58		follows:
52	59		(c) Employees of the following entities, when acting for the
53	60		benefit of those entities, are exempt from the licensing and other
54	61		requirements of this chapter applicable to residential mortgage
55	62		loan originators:
56	63		(1) a nonprofit organization:
57	64		(A) providing self-help housing that originates
58	65		zero interest residential mortgage loans for borrowers who have
59	66		provided part of the labor to construct the dwelling securing the
60	67		loan; or
61	68		(B) that has designation as a Section 501(c)(3)
62	69		organization by the Internal Revenue Service and originates
63	70		residential mortgage loans for borrowers who, through a self-help
64	71		program, have provided at least 200 labor hours or 65 percent of the
65	72		labor to construct the dwelling securing the loan;
66	73		(2) subject to Subsection (f), any owner of
67	74		residential real estate who in any 12-consecutive-month period
68	75		makes no more than five residential mortgage loans to purchasers of
69	76		the property for all or part of the purchase price of the
70	77		residential real estate against which the mortgage is secured; and
71	78		(3) an entity that is:
72	79		(A) a depository institution;
73	80		(B) a subsidiary of a depository institution that
74	81		is:
75	82		(i) owned and controlled by the depository
76	83		institution; and
77	84		(ii) regulated by a federal banking agency;
78	85		or
79	86		(C) an institution regulated by the Farm Credit
80	87		Administration.
81	88		(f) In determining eligibility for an exemption under
82	89		Subsection (c)(2), two or more owners of residential real estate
83	90		are considered a single owner for the purpose of computing the
84	91		number of mortgage loans made within the period specified by that
85	92		subdivision if any of the owners are affiliates, as defined by
86	93		Section 1.002(1), Business Organizations Code, or if any of the
87	94		owners have substantially common ownership, as determined by the
88	95		commissioner.
89	96		SECTION 3. Subtitle E, Title 3, Finance Code, is amended by
90	97		adding Chapter 159 to read as follows:
91	98		CHAPTER 159. WRAP MORTGAGE LOAN FINANCING
92	99		SUBCHAPTER A. GENERAL PROVISIONS
93	100		Sec. 159.001. DEFINITIONS. In this chapter:
94	101		(1) "Commissioner" means the savings and mortgage
95	102		lending commissioner.
96	103		(2) "Finance commission" means the Finance Commission
97	104		of Texas.
98	105		(3) "Residential mortgage loan" has the meaning
99	106		assigned by Section 180.002.
100	107		(4) "Residential real estate" has the meaning assigned
101	108		by Section 180.002.
102	109		(5) "Wrap borrower" means a person obligated to pay a
103	110		wrap mortgage loan.
104	111		(6) "Wrap lender" means:
105	112		(A) a person who makes a wrap mortgage loan; or
106	113		(B) an owner of residential real estate who
107	114		contracts with another person to make a wrap mortgage loan to a wrap
108	115		borrower on the owner's behalf to finance the purchase of the
109	116		owner's residential real estate.
110	117		(7) "Wrap mortgage loan" means a residential mortgage
111	118		loan:
112	119		(A) made to finance the purchase of residential
113	120		real estate that will continue to be subject to an unreleased lien
114	121		that:
115	122		(i) attached to the residential real estate
116	123		before the loan was made; and
117	124		(ii) secures a debt incurred by a person
118	125		other than the wrap borrower that was not paid off at the time the
119	126		loan was made; and
120	127		(B) obligating the wrap borrower to the wrap
121	128		lender for payment of a debt the principal amount of which includes:
122	129		(i) the outstanding balance of the debt
123	130		described by Paragraph (A)(ii); and
124	131		(ii) any remaining amount of the purchase
125	132		price financed by the wrap lender.
126	133		Sec. 159.002. INAPPLICABILITY OF CHAPTER. (a) In this
127	134		section, "unimproved residential real estate" means residential
128	135		real estate on which a dwelling has not been constructed.
129	136		(b) Notwithstanding any other provision of this chapter,
130	137		this chapter does not apply to a wrap mortgage loan:
131	138		(1) made by or on behalf of an owner of unimproved
132	139		residential real estate to a purchaser of that residential real
133	140		estate if:
134	141		(A) the residential real estate purchased will
135	142		not continue to be subject to any unreleased lien described by
136	143		Section 159.001(7)(A) that secures a debt that is subject to a
137	144		due-on-sale clause in connection with which the lienholder may
138	145		foreclose the lien; or
139	146		(B) the residential real estate purchased will
140	147		continue to be subject to an unreleased lien described by Paragraph
141	148		(A) and the holder of that unreleased lien has consented to the sale
142	149		of the residential real estate; or
143	150		(2) for a sale of residential real estate that is the
144	151		wrap lender's homestead.
145	152		Sec. 159.003. EXEMPTIONS. (a) The following persons are
146	153		exempt from this chapter:
147	154		(1) a federally insured bank, savings bank, savings
148	155		and loan association, Farm Credit System Institution, or credit
149	156		union;
150	157		(2) a subsidiary of a federally insured bank, savings
151	158		bank, savings and loan association, Farm Credit System Institution,
152	159		or credit union;
153	160		(3) the state or a governmental agency, political
154	161		subdivision, or other instrumentality of the state, or an employee
155	162		of the state or a governmental agency, political subdivision, or
156	163		instrumentality of the state who is acting within the scope of the
157	164		person's employment; or
158	165		(4) subject to Subsection (b), an owner of residential
159	166		real estate if the owner does not in any 12-consecutive-month
160	167		period make, or contract with another person to make, more than five
161	168		wrap mortgage loans to purchasers of the property for all or part of
162	169		the purchase price of the residential real estate against which the
163	170		mortgage is secured.
164	171		(b) In determining eligibility for an exemption under
165	172		Subsection (a)(4), two or more owners of residential real estate
166	173		are considered a single owner for the purpose of computing the
167	174		number of wrap mortgage loans made within the period specified by
168	175		that subdivision if any of the owners are affiliates, as defined by
169	176		Section 1.002(1), Business Organizations Code, or if any of the
170	177		owners have substantially common ownership, as determined by the
171	178		commissioner.
172	179		SUBCHAPTER B. LICENSING OR REGISTRATION
173	180		Sec. 159.051. LICENSE OR REGISTRATION REQUIRED. A person
174	181		may not originate or make a wrap mortgage loan unless the person is
175	182		licensed or registered to originate or make residential mortgage
176	183		loans under Chapter 156, 157, or 342 or is exempt from licensing or
177	184		registration as provided under an applicable provision of those
178	185		chapters.
179	186		SUBCHAPTER C. TRANSACTION REQUIREMENTS; REMEDIES
180	187		Sec. 159.101. DISCLOSURE STATEMENT; OPTION TO RESCIND.
181	188		(a) A wrap lender must, on or before the seventh day before the
182	189		wrap mortgage loan agreement is entered into, provide to the wrap
183	190		borrower a separate written disclosure statement in at least
184	191		12-point type that:
185	192		(1) contains the information required for a written
186	193		disclosure statement under Section 5.016, Property Code; and
187	194		(2) includes a statement in a form substantially
188	195		similar to the following:
189	196		NOTICE REGARDING PROPERTY INSURANCE: ANY INSURANCE MAINTAINED BY A
190	197		SELLER, LENDER, OR OTHER PERSON WHO IS NOT THE BUYER OF THIS
191	198		PROPERTY MAY NOT PROVIDE COVERAGE TO THE BUYER IF THE BUYER SUFFERS
192	199		A LOSS OR INCURS LIABILITY IN CONNECTION WITH THE PROPERTY. TO
193	200		ENSURE THE BUYER'S INTERESTS ARE PROTECTED, THE BUYER SHOULD
194	201		PURCHASE THE BUYER'S OWN PROPERTY INSURANCE. BEFORE PURCHASING
195	202		THIS PROPERTY, YOU MAY WISH TO CONSULT AN INSURANCE AGENT REGARDING
196	203		THE INSURANCE COVERAGE AVAILABLE TO YOU AS A BUYER OF THE PROPERTY.
197	204		(b) The disclosure statement required under Subsection (a)
198	205		must be dated and signed by the wrap borrower when the wrap borrower
199	206		receives the statement.
200	207		(c) The finance commission by rule shall adopt a model
201	208		disclosure statement that satisfies the requirements of Subsection
202	209		(a).
203	210		(d) If the disclosure statement required under Subsection
204	211		(a) and any disclosure required by Section 159.102 are received by
205	212		the wrap borrower on or before the closing date of the wrap mortgage
206	213		loan, the wrap borrower may rescind the wrap mortgage loan
207	214		agreement and any related purchase agreement or other agreement
208	215		relating to the loan transaction not later than the seventh day
209	216		after the date of receipt of the disclosure statement, regardless
210	217		of whether the disclosure is timely made. On rescission under this
211	218		subsection, the wrap borrower is entitled to a return of any earnest
212	219		money, escrow amounts, down payment, or other fees or charges paid
213	220		in connection with the wrap mortgage loan, the related purchase
214	221		transaction, and any other related transaction.
215	222		Sec. 159.102. FOREIGN LANGUAGE REQUIREMENT. If the
216	223		negotiations that precede the execution of the wrap mortgage loan
217	224		agreement are conducted primarily in a language other than English,
218	225		the wrap lender shall provide a copy of a written disclosure
219	226		statement required under Section 159.101 of this code or Section
220	227		5.016, Property Code, in that language to the wrap borrower.
221	228		Sec. 159.103. FAILURE TO PROVIDE DISCLOSURE: TOLLING OF
222	229		LIMITATIONS. If a wrap lender fails to provide the disclosure
223	230		statement as required by Section 159.101 or fails to provide the
224	231		disclosure statement in the language required by Section 159.102,
225	232		the limitations period applicable to any cause of action of the wrap
226	233		borrower against the wrap lender arising out of the wrap lender's
227	234		violation of a law of this state in connection with the wrap
228	235		mortgage loan transaction is tolled until the 120th day after the
229	236		date the required disclosure statement is provided.
230	237		Sec. 159.104. FAILURE TO PROVIDE DISCLOSURE BEFORE CLOSING;
231	238		RIGHT OF RESCISSION. (a) Subject to Subsection (b), if a wrap
232	239		mortgage loan is closed without the wrap lender providing the
233	240		disclosure statement required by Section 159.101 or any disclosure
234	241		required by Section 159.102, the wrap borrower may rescind the wrap
235	242		mortgage loan agreement and the related purchase agreement at any
236	243		time by providing the wrap lender notice of rescission in writing.
237	244		(b) If the wrap borrower receives a required disclosure
238	245		statement under Section 159.101 or 159.102 after the date the wrap
239	246		mortgage loan is closed but before the wrap borrower provides
240	247		notice of rescission, the wrap borrower may rescind the wrap
241	248		mortgage loan agreement and the related purchase agreement in
242	249		writing on or before the 21st day after the date of receipt of the
243	250		disclosure statement.
244	251		(c) Not later than the 30th day after the date the wrap
245	252		borrower provides notice of rescission under this section, the wrap
246	253		lender shall return to the wrap borrower:
247	254		(1) all principal and interest payments made by the
248	255		wrap borrower on the wrap mortgage loan;
249	256		(2) any money or property given as earnest money, a
250	257		down payment, or otherwise in connection with the wrap mortgage
251	258		loan or related purchase transaction; and
252	259		(3) any escrow amounts for the wrap mortgage loan or
253	260		related purchase transaction.
254	261		(d) On the date on which all of the returned money or
255	262		property described by Subsection (c) is received by the wrap
256	263		borrower, the wrap borrower shall convey to the wrap lender or the
257	264		wrap lender's designee the residential real estate described by
258	265		Section 159.001(7)(A). The wrap borrower shall surrender
259	266		possession of the residential real estate not later than the 30th
260	267		day after the date of the wrap borrower's receipt of the money or
261	268		property returned as described by this subsection.
262	269		(e) Notwithstanding Subsection (a) or (b), the wrap lender
263	270		may avoid rescission if not later than the 30th day after the date
264	271		of receipt of notice of rescission under Subsection (a), the wrap
265	272		lender:
266	273		(1) pays the outstanding balance due on any debt
267	274		described by Section 159.001(7)(A)(ii);
268	275		(2) pays any due and unpaid taxes or other government
269	276		assessment on the residential real estate described by Section
270	277		159.001(7)(A);
271	278		(3) pays to the wrap borrower as damages for
272	279		noncompliance the sum of $1,000 and any reasonable attorney's fees
273	280		incurred by the wrap borrower; and
274	281		(4) provides to the wrap borrower evidence of
275	282		compliance with Subdivisions (1) and (2).
276	283		Sec. 159.105. ENFORCEABILITY OF WRAP LIEN. A lien securing
277	284		a wrap mortgage loan is void unless the wrap mortgage loan and the
278	285		conveyance of the residential real estate securing the loan are
279	286		closed by an attorney or a title company.
280	287		Sec. 159.106. BORROWER'S RIGHT OF ACTION. (a) A wrap
281	288		borrower may bring an action to:
282	289		(1) obtain declaratory or injunctive relief to enforce
283	290		this subchapter;
284	291		(2) recover any actual damages suffered by the wrap
285	292		borrower as a result of a violation of this subchapter; or
286	293		(3) obtain other remedies available under this
287	294		subchapter or in an action under Section 17.50, Business & Commerce
288	295		Code, as otherwise authorized under this subchapter.
289	296		(b) A wrap borrower who prevails in an action under this
290	297		section may recover court costs and reasonable attorney's fees.
291	298		Sec. 159.107. WAIVER OR AVOIDANCE PROHIBITED. (a) Any
292	299		purported waiver of a right of a wrap borrower under this subchapter
293	300		or purported exemption of a person from liability for a violation of
294	301		this subchapter is void.
295	302		(b) A person who is a party to a residential real estate
296	303		transaction may not evade the application of this subchapter by any
297	304		device, subterfuge, or pretense, and any attempt to do so is void
298	305		and a deceptive trade practice under Subchapter E, Chapter 17,
299	306		Business & Commerce Code, and is actionable under that subchapter.
300	307		Sec. 159.108. RULEMAKING AUTHORITY. The finance commission
301	308		may adopt and enforce rules necessary for the intent of or to ensure
302	309		compliance with this subchapter.
303	310		SUBCHAPTER D. DUTIES OWED TO WRAP BORROWER
304	311		Sec. 159.151. MONEY HELD IN TRUST. A person who collects or
305	312		receives a payment from a wrap borrower under the terms of a wrap
306	313		mortgage loan holds the money in trust for the benefit of the
307	314		borrower.
308	315		Sec. 159.152. FIDUCIARY DUTY. A person who collects or
309	316		receives a payment from a wrap borrower under the terms of or in
310	317		connection with a wrap mortgage loan owes a fiduciary duty to the
311	318		wrap borrower to use the payment to satisfy the obligations of the
312	319		obligee under each debt described by Section 159.001(7)(A)(ii) and
313	320		the payment of taxes and insurance for which the wrap lender has
314	321		received any payments from the wrap borrower.
315	322		SUBCHAPTER E. WRAP BORROWER'S RIGHTS
316	323		Sec. 159.201. APPLICABILITY OF SUBCHAPTER. This subchapter
317	324		applies only to a wrap mortgage loan for a purchase of residential
318	325		real estate to be used as the wrap borrower's residence.
319	326		Sec. 159.202. WRAP BORROWER'S RIGHT TO DEDUCT. The wrap
320	327		borrower, without taking judicial action, may deduct from any
321	328		amount owed to the wrap lender under the terms of the wrap mortgage
322	329		loan:
323	330		(1) the amount of any payment made by the wrap borrower
324	331		to an obligee of a debt described by Section 159.001(7)(A)(ii) to
325	332		cure a default by the wrap lender caused by the lender's failure to
326	333		make payments for which the lender is responsible under the terms of
327	334		the wrap mortgage loan; or
328	335		(2) any other amount for which the wrap lender is
329	336		liable to the wrap borrower under the terms of the wrap mortgage
330	337		loan.
331	338		SUBCHAPTER F. ENFORCEMENT OF CERTAIN REGISTRATION REQUIREMENTS
332	339		Sec. 159.251. APPLICABILITY OF SUBCHAPTER. This subchapter
333	340		applies only to a wrap lender who is required to register as a
334	341		residential mortgage loan servicer under Chapter 158.
335	342		Sec. 159.252. INSPECTION; INVESTIGATION. (a) The
336	343		commissioner may conduct an inspection of a wrap lender registered
337	344		under Chapter 158 as the commissioner determines necessary to
338	345		determine whether the wrap lender is complying with that chapter
339	346		and applicable rules. The inspection may include an inspection of
340	347		the books, records, documents, operations, and facilities of the
341	348		wrap lender. The commissioner may share evidence of criminal
342	349		activity gathered during an inspection or investigation with any
343	350		state or federal law enforcement agency.
344	351		(b) For reasonable cause, the commissioner at any time may
345	352		investigate a wrap lender registered under Chapter 158 to determine
346	353		whether the lender is complying with that chapter and applicable
347	354		rules.
348	355		(c) The commissioner may conduct an undercover or covert
349	356		investigation only if the commissioner, after due consideration of
350	357		the circumstances, determines that the investigation is necessary
351	358		to prevent immediate harm and to carry out the purposes of Chapter
352	359		158.
353	360		(d) The finance commission by rule shall provide guidelines
354	361		to govern an inspection or investigation under this section,
355	362		including rules to:
356	363		(1) determine the information and records of the wrap
357	364		lender to which the commissioner may demand access during an
358	365		inspection or investigation; and
359	366		(2) establish what constitutes reasonable cause for an
360	367		investigation.
361	368		(e) Information obtained by the commissioner during an
362	369		inspection or investigation under this section is confidential
363	370		unless disclosure of the information is permitted or required by
364	371		other law.
365	372		(f) The commissioner may share information gathered during
366	373		an investigation under this section with a state or federal agency.
367	374		The commissioner may share information gathered during an
368	375		inspection with a state or federal agency only if the commissioner
369	376		determines there is a valid reason for the sharing.
370	377		(g) The commissioner may require reimbursement of expenses
371	378		for each examiner for an on-site examination or inspection of a
372	379		registered wrap lender under this section if records are located
373	380		out of state and are not made available for examination or
374	381		inspection by the examiner in this state. The finance commission by
375	382		rule shall set the maximum amount for the reimbursement of expenses
376	383		authorized under this subsection.
377	384		Sec. 159.253. ISSUANCE AND ENFORCEMENT OF SUBPOENA.
378	385		(a) During an investigation conducted under this subchapter, the
379	386		commissioner may issue a subpoena that is addressed to a peace
380	387		officer of this state or other person authorized by law to serve
381	388		citation or perfect service. The subpoena may require a person to
382	389		give a deposition, produce documents, or both.
383	390		(b) If a person disobeys a subpoena or if a person appearing
384	391		in a deposition in connection with the investigation refuses to
385	392		testify, the commissioner may petition a district court in Travis
386	393		County to issue an order requiring the person to obey the subpoena,
387	394		testify, or produce documents relating to the matter. The court
388	395		shall promptly set an application to enforce a subpoena issued
389	396		under Subsection (a) for hearing and shall cause notice of the
390	397		application and the hearing to be served on the person to whom the
391	398		subpoena is directed.
392	399		SUBCHAPTER G. ENFORCEMENT OF CHAPTER
393	400		Sec. 159.301. CEASE AND DESIST ORDER. (a) The
394	401		commissioner, if the commissioner has reasonable cause to believe
395	402		that a wrap lender or wrap mortgage loan originator to whom this
396	403		chapter applies has violated or is about to violate this chapter,
397	404		may issue without notice and hearing an order to cease and desist
398	405		from continuing a particular action or an order to take affirmative
399	406		action, or both, to enforce compliance with this chapter.
400	407		(b) An order issued under Subsection (a) must contain a
401	408		reasonably detailed statement of the facts on which the order is
402	409		made. If a person against whom the order is made requests a
403	410		hearing, the commissioner shall set and give notice of a hearing
404	411		before the commissioner or a hearings officer. The hearing shall be
405	412		governed by Chapter 2001, Government Code. Based on the findings of
406	413		fact, conclusions of law, and recommendations of the hearings
407	414		officer, the commissioner by order may find a violation has
408	415		occurred or not occurred.
409	416		(c) If a hearing is not requested under Subsection (b) on or
410	417		before the 30th day after the date on which an order is made, the
411	418		order is considered final and not appealable.
412	419		(d) The commissioner, after giving notice and an
413	420		opportunity for hearing, may impose against a person who violates a
414	421		cease and desist order an administrative penalty in an amount not to
415	422		exceed $1,000 for each day of the violation. In addition to any
416	423		other remedy provided by law, the commissioner may institute in
417	424		district court a suit for injunctive relief and to collect the
418	425		administrative penalty. A bond is not required of the commissioner
419	426		with respect to injunctive relief granted under this subsection.
420	427		SECTION 4. Section 180.003, Finance Code, is amended by
421	428		amending Subsection (a) and adding Subsection (d) to read as
422	429		follows:
423	430		(a) The following persons are exempt from this chapter:
424	431		(1) a registered mortgage loan originator when acting
425	432		for an entity described by Section 180.002(16)(A)(i), (ii), or
426	433		(iii);
427	434		(2) an individual who offers or negotiates terms of a
428	435		residential mortgage loan with or on behalf of an immediate family
429	436		member of the individual;
430	437		(3) a licensed attorney who negotiates the terms of a
431	438		residential mortgage loan on behalf of a client as an ancillary
432	439		matter to the attorney's representation of the client, unless the
433	440		attorney:
434	441		(A) takes a residential mortgage loan
435	442		application; and
436	443		(B) offers or negotiates the terms of a
437	444		residential mortgage loan;
438	445		(4) an individual who offers or negotiates terms of a
439	446		residential mortgage loan secured by a dwelling that serves as the
440	447		individual's residence;
441	448		(5) subject to Subsection (d), an owner of residential
442	449		real estate who in any 12-consecutive-month period makes no more
443	450		than five residential mortgage loans to purchasers of the property
444	451		for all or part of the purchase price of the residential real estate
445	452		against which the mortgage is secured; and
446	453		(6) subject to Subsection (d), an owner of a dwelling
447	454		who in any 12-consecutive-month period makes no more than five
448	455		residential mortgage loans to purchasers of the property for all or
449	456		part of the purchase price of the dwelling against which the
450	457		mortgage or security interest is secured.
451	458		(d) In determining eligibility for an exemption under
452	459		Subsection (a)(5) or (6), two or more owners of residential real
453	460		estate or a dwelling, as applicable, are considered a single owner
454	461		for the purpose of computing the number of mortgage loans made
455	462		within the period specified by those subdivisions if any of the
456	463		owners are affiliates, as defined by Section 1.002(1), Business
457	464		Organizations Code, or if any of the owners have substantially
458	465		common ownership, as determined by the savings and mortgage lending
459	466		commissioner.
460	467		SECTION 5. This Act takes effect January 1, 2020.
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