LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 87TH LEGISLATIVE REGULAR SESSION April 1, 2021 TO: Honorable Rafael Anchia, Chair, House Committee on Pensions, Investments & Financial Services FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HB216 by Ortega (relating to residential mortgage loans, including the financing of residential real estate purchases by means of a wrap mortgage loan; providing licensing and registration requirements; authorizing an administrative penalty.), Committee Report 1st House, Substituted No significant fiscal implication to the State is anticipated. The bill would amend the Finance Code to define a wrap mortgage loan and to prohibit a person from originating or making a wrap mortgage loan unless the person possesses certain licensures. The bill would allow a wrap mortgage borrower to bring legal action to obtain declaratory or injunctive relief, recover actual damages, or pursue other remedies in relation to their loan. In addition, bill would allow the Department of Savings and Mortgage Lending (DSML) to investigate a wrap lender to determine whether the lender is in compliance with statute. If not, provisions in the bill would grant DSML the authority to issue a cease and desist order and to impose an administrative penalty.Unless otherwise specified, the bill would take effect on January 1, 2022. It is assumed that the costs associated with the bill's provisions relating to residential mortgage loans could be absorbed using existing resources. The Department of Savings and Mortgage Lending (DSML) collects revenues sufficient to fully fund its own operations and does not receive general revenue appropriations. The agency estimates costs totaling $258,892 over the 2022-23 biennium for increases in travel, investigation activities, and salaries for 2.0 additional full-time equivalents related to the bill. DSML revenue sources, including licensing fees, may be adjusted to collect enough revenue to fund these items.Other affected agencies anticipate that any legal work resulting from the passage of this bill could be absorbed with current appropriations. Local Government ImpactNo fiscal implication to units of local government is anticipated. Source Agencies: b > td > 212 Office of Court Admin, 302 Office of the Attorney General, 304 Comptroller of Public Accounts, 450 Dept Savings and Mortgage Lending, 451 Department of Banking LBB Staff: b > td > JMc, AAL, MB, EJ, AJL
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 87TH LEGISLATIVE REGULAR SESSION
April 1, 2021
TO: Honorable Rafael Anchia, Chair, House Committee on Pensions, Investments & Financial Services FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HB216 by Ortega (relating to residential mortgage loans, including the financing of residential real estate purchases by means of a wrap mortgage loan; providing licensing and registration requirements; authorizing an administrative penalty.), Committee Report 1st House, Substituted
TO: Honorable Rafael Anchia, Chair, House Committee on Pensions, Investments & Financial Services
FROM: Jerry McGinty, Director, Legislative Budget Board
IN RE: HB216 by Ortega (relating to residential mortgage loans, including the financing of residential real estate purchases by means of a wrap mortgage loan; providing licensing and registration requirements; authorizing an administrative penalty.), Committee Report 1st House, Substituted
Honorable Rafael Anchia, Chair, House Committee on Pensions, Investments & Financial Services
Honorable Rafael Anchia, Chair, House Committee on Pensions, Investments & Financial Services
Jerry McGinty, Director, Legislative Budget Board
Jerry McGinty, Director, Legislative Budget Board
HB216 by Ortega (relating to residential mortgage loans, including the financing of residential real estate purchases by means of a wrap mortgage loan; providing licensing and registration requirements; authorizing an administrative penalty.), Committee Report 1st House, Substituted
HB216 by Ortega (relating to residential mortgage loans, including the financing of residential real estate purchases by means of a wrap mortgage loan; providing licensing and registration requirements; authorizing an administrative penalty.), Committee Report 1st House, Substituted
No significant fiscal implication to the State is anticipated.
No significant fiscal implication to the State is anticipated.
The bill would amend the Finance Code to define a wrap mortgage loan and to prohibit a person from originating or making a wrap mortgage loan unless the person possesses certain licensures. The bill would allow a wrap mortgage borrower to bring legal action to obtain declaratory or injunctive relief, recover actual damages, or pursue other remedies in relation to their loan. In addition, bill would allow the Department of Savings and Mortgage Lending (DSML) to investigate a wrap lender to determine whether the lender is in compliance with statute. If not, provisions in the bill would grant DSML the authority to issue a cease and desist order and to impose an administrative penalty.Unless otherwise specified, the bill would take effect on January 1, 2022. It is assumed that the costs associated with the bill's provisions relating to residential mortgage loans could be absorbed using existing resources. The Department of Savings and Mortgage Lending (DSML) collects revenues sufficient to fully fund its own operations and does not receive general revenue appropriations. The agency estimates costs totaling $258,892 over the 2022-23 biennium for increases in travel, investigation activities, and salaries for 2.0 additional full-time equivalents related to the bill. DSML revenue sources, including licensing fees, may be adjusted to collect enough revenue to fund these items.Other affected agencies anticipate that any legal work resulting from the passage of this bill could be absorbed with current appropriations.
Unless otherwise specified, the bill would take effect on January 1, 2022. It is assumed that the costs associated with the bill's provisions relating to residential mortgage loans could be absorbed using existing resources. The Department of Savings and Mortgage Lending (DSML) collects revenues sufficient to fully fund its own operations and does not receive general revenue appropriations. The agency estimates costs totaling $258,892 over the 2022-23 biennium for increases in travel, investigation activities, and salaries for 2.0 additional full-time equivalents related to the bill. DSML revenue sources, including licensing fees, may be adjusted to collect enough revenue to fund these items.Other affected agencies anticipate that any legal work resulting from the passage of this bill could be absorbed with current appropriations.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: b > td > 212 Office of Court Admin, 302 Office of the Attorney General, 304 Comptroller of Public Accounts, 450 Dept Savings and Mortgage Lending, 451 Department of Banking
212 Office of Court Admin, 302 Office of the Attorney General, 304 Comptroller of Public Accounts, 450 Dept Savings and Mortgage Lending, 451 Department of Banking
LBB Staff: b > td > JMc, AAL, MB, EJ, AJL
JMc, AAL, MB, EJ, AJL