Texas 2021 - 87th Regular

Texas Senate Bill SB43 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	S.B. No. 43
	1	+	By: Zaffirini, et al. S.B. No. 43
	2	+	(Ortega, Parker, Capriglione, Muñoz, Jr., Rodriguez)
2	3
3	4
	5	+	A BILL TO BE ENTITLED
4	6		AN ACT
5	7		relating to residential mortgage loans, including the financing of
6	8		residential real estate purchases by means of a wrap mortgage loan;
7	9		providing licensing and registration requirements; authorizing an
8	10		administrative penalty.
9	11		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	12		SECTION 1. Section 156.202, Finance Code, is amended by
11	13		amending Subsection (a-1) and adding Subsection (b) to read as
12	14		follows:
13	15		(a-1) The following entities are exempt from this chapter:
14	16		(1) a nonprofit organization:
15	17		(A) providing self-help housing that originates
16	18		zero interest residential mortgage loans for borrowers who have
17	19		provided part of the labor to construct the dwelling securing the
18	20		loan; or
19	21		(B) that has designation as a Section 501(c)(3)
20	22		organization by the Internal Revenue Service and originates
21	23		residential mortgage loans for borrowers who, through a self-help
22	24		program, have provided at least 200 labor hours or 65 percent of the
23	25		labor to construct the dwelling securing the loan;
24	26		(2) a mortgage banker registered under Chapter 157;
25	27		(3) subject to Subsection (b), any owner of
26	28		residential real estate who in any 12-consecutive-month period
27		-	makes no more than three [five] residential mortgage loans to
28		-	purchasers of the property for all or part of the purchase price of
29		-	the residential real estate against which the mortgage is secured;
30		-	and
	29	+	makes no more than five residential mortgage loans to purchasers of
	30	+	the property for all or part of the purchase price of the
	31	+	residential real estate against which the mortgage is secured; and
31	32		(4) an entity that is:
32	33		(A) a depository institution;
33	34		(B) a subsidiary of a depository institution that
34	35		is:
35	36		(i) owned and controlled by the depository
36	37		institution; and
37	38		(ii) regulated by a federal banking agency;
38	39		or
39	40		(C) an institution regulated by the Farm Credit
40	41		Administration.
41	42		(b) In determining eligibility for an exemption under
42	43		Subsection (a-1)(3), two or more owners of residential real estate
43	44		are considered a single owner for the purpose of computing the
44	45		number of mortgage loans made within the period specified by that
45		-	subdivision if any of the owners are ~~an entity or an affiliate of an~~
46		-	~~entity~~, ~~including a general partnership~~, ~~limited partnership,~~
47		-	~~limited liability company,~~ ~~or corporation~~, as ~~defined~~ by ~~Section~~
48		-	1.~~002, Business Organizations Code.~~
	46	+	subdivision if any of the owners are affiliates, as defined by
	47	+	Section 1.002, Business Organizations Code, or if any of the owners
	48	+	have substantially common ownership, as determined by the
	49	+	commissioner.
49	50		SECTION 2. Section 157.0121, Finance Code, is amended by
50	51		amending Subsection (c) and adding Subsection (f) to read as
51	52		follows:
52	53		(c) Employees of the following entities, when acting for the
53	54		benefit of those entities, are exempt from the licensing and other
54	55		requirements of this chapter applicable to residential mortgage
55	56		loan originators:
56	57		(1) a nonprofit organization:
57	58		(A) providing self-help housing that originates
58	59		zero interest residential mortgage loans for borrowers who have
59	60		provided part of the labor to construct the dwelling securing the
60	61		loan; or
61	62		(B) that has designation as a Section 501(c)(3)
62	63		organization by the Internal Revenue Service and originates
63	64		residential mortgage loans for borrowers who, through a self-help
64	65		program, have provided at least 200 labor hours or 65 percent of the
65	66		labor to construct the dwelling securing the loan;
66	67		(2) subject to Subsection (f), any owner of
67	68		residential real estate who in any 12-consecutive-month period
68		-	makes no more than three [five] residential mortgage loans to
69		-	purchasers of the property for all or part of the purchase price of
70		-	the residential real estate against which the mortgage is secured;
71		-	and
	69	+	makes no more than five residential mortgage loans to purchasers of
	70	+	the property for all or part of the purchase price of the
	71	+	residential real estate against which the mortgage is secured; and
72	72		(3) an entity that is:
73	73		(A) a depository institution;
74	74		(B) a subsidiary of a depository institution that
75	75		is:
76	76		(i) owned and controlled by the depository
77	77		institution; and
78	78		(ii) regulated by a federal banking agency;
79	79		or
80	80		(C) an institution regulated by the Farm Credit
81	81		Administration.
82	82		(f) In determining eligibility for an exemption under
83	83		Subsection (c)(2), two or more owners of residential real estate
84	84		are considered a single owner for the purpose of computing the
85	85		number of mortgage loans made within the period specified by that
86		-	subdivision if any of the owners are ~~an entity or an affiliate of an~~
87		-	~~entity~~, ~~including a general partnership~~, ~~limited partnership,~~
88		-	~~limited liability company,~~ ~~or corporation~~, as ~~defined~~ by ~~Section~~
89		-	1.~~002, Business Organizations Code.~~
	86	+	subdivision if any of the owners are affiliates, as defined by
	87	+	Section 1.002, Business Organizations Code, or if any of the owners
	88	+	have substantially common ownership, as determined by the
	89	+	commissioner.
90	90		SECTION 3. Subtitle E, Title 3, Finance Code, is amended by
91	91		adding Chapter 159 to read as follows:
92	92		CHAPTER 159. WRAP MORTGAGE LOAN FINANCING
93	93		SUBCHAPTER A. GENERAL PROVISIONS
94	94		Sec. 159.001. DEFINITIONS. In this chapter:
95	95		(1) "Commissioner" means the savings and mortgage
96	96		lending commissioner.
97	97		(2) "Finance commission" means the Finance Commission
98	98		of Texas.
99	99		(3) "Residential mortgage loan" has the meaning
100	100		assigned by Section 180.002.
101	101		(4) "Residential real estate" has the meaning assigned
102	102		by Section 180.002.
103	103		(5) "Wrap borrower" means a person obligated to pay a
104	104		wrap mortgage loan.
105	105		(6) "Wrap lender" means:
106	106		(A) a person who makes a wrap mortgage loan; or
107	107		(B) an owner of residential real estate who
108	108		contracts with another person to make a wrap mortgage loan to a wrap
109	109		borrower on the owner's behalf to finance the purchase of the
110	110		owner's residential real estate.
111	111		(7) "Wrap mortgage loan" means a residential mortgage
112	112		loan:
113	113		(A) made to finance the purchase of residential
114	114		real estate that will continue to be subject to an unreleased lien
115	115		that:
116	116		(i) attached to the residential real estate
117	117		before the loan was made; and
118	118		(ii) secures a debt incurred by a person
119	119		other than the wrap borrower that was not paid off at the time the
120	120		loan was made; and
121	121		(B) obligating the wrap borrower to the wrap
122	122		lender for payment of a debt the principal amount of which includes:
123	123		(i) the outstanding balance of the debt
124	124		described by Paragraph (A)(ii); and
125	125		(ii) any remaining amount of the purchase
126	126		price financed by the wrap lender.
127	127		Sec. 159.002. INAPPLICABILITY OF CHAPTER. (a) In this
128	128		section, "unimproved residential real estate" means residential
129	129		real estate on which a dwelling has not been constructed.
130	130		(b) Notwithstanding any other provision of this chapter,
131	131		this chapter does not apply to a wrap mortgage loan:
132	132		(1) made by or on behalf of an owner of unimproved
133	133		residential real estate to a purchaser of that residential real
134	134		estate if:
135	135		(A) the residential real estate purchased will
136	136		not continue to be subject to any unreleased lien described by
137	137		Section 159.001(7)(A) that secures a debt that is subject to a
138	138		due-on-sale clause in connection with which the lienholder may
139	139		foreclose the lien; or
140	140		(B) the residential real estate purchased will
141	141		continue to be subject to an unreleased lien described by Paragraph
142	142		(A) and the holder of that unreleased lien has consented to the sale
143	143		of the residential real estate; or
144	144		(2) for a sale of residential real estate that is the
145	145		wrap lender's homestead.
146	146		Sec. 159.003. EXEMPTIONS. (a) The following persons are
147	147		exempt from this chapter:
148	148		(1) a federally insured bank, savings bank, savings
149	149		and loan association, Farm Credit System Institution, or credit
150	150		union;
151	151		(2) a subsidiary of a federally insured bank, savings
152	152		bank, savings and loan association, Farm Credit System Institution,
153	153		or credit union;
154	154		(3) the state or a governmental agency, political
155	155		subdivision, or other instrumentality of the state, or an employee
156	156		of the state or a governmental agency, political subdivision, or
157	157		instrumentality of the state who is acting within the scope of the
158	158		person's employment; or
159	159		(4) subject to Subsection (b), an owner of residential
160	160		real estate if the owner does not in any 12-consecutive-month
161		-	period make, or contract with another person to make, more than
162		-	~~three~~ wrap mortgage loans to purchasers of the property for all or
163		-	~~part of~~ the purchase price of the residential real estate against
164		-	~~which the~~ mortgage is secured.
	161	+	period make, or contract with another person to make, more than five
	162	+	wrap mortgage loans to purchasers of the property for all or part of
	163	+	the purchase price of the residential real estate against which the
	164	+	mortgage is secured.
165	165		(b) In determining eligibility for an exemption under
166	166		Subsection (a)(4), two or more owners of residential real estate
167	167		are considered a single owner for the purpose of computing the
168		-	number of mortgage loans made within the period specified by ~~that~~
169		-	subdivision if any of the owners are ~~an entity or an affiliate of an~~
170		-	~~entity~~, ~~including a general partnership~~, ~~limited partnership,~~
171		-	~~limited liability company,~~ ~~or corporation~~, as ~~defined~~ by ~~Section~~
172		-	1.~~002, Business Organizations Code.~~
	168	+	number of wrap mortgage loans made within the period specified by
	169	+	that subdivision if any of the owners are affiliates, as defined by
	170	+	Section 1.002, Business Organizations Code, or if any of the owners
	171	+	have substantially common ownership, as determined by the
	172	+	commissioner.
173	173		SUBCHAPTER B. LICENSING OR REGISTRATION
174	174		Sec. 159.051. LICENSE OR REGISTRATION REQUIRED. A person
175	175		may not originate or make a wrap mortgage loan unless the person is
176	176		licensed or registered to originate or make residential mortgage
177	177		loans under Chapter 156, 157, or 342 or is exempt from licensing or
178	178		registration as provided under an applicable provision of those
179	179		chapters.
180	180		SUBCHAPTER C. TRANSACTION REQUIREMENTS; REMEDIES
181	181		Sec. 159.101. DISCLOSURE STATEMENT; OPTION TO RESCIND. (a)
182	182		A wrap lender must, on or before the seventh day before the wrap
183	183		mortgage loan agreement is entered into, provide to the wrap
184	184		borrower a separate written disclosure statement in at least
185	185		12-point type that:
186	186		(1) contains the information required for a written
187	187		disclosure statement under Section 5.016, Property Code; and
188	188		(2) includes a statement in a form substantially
189	189		similar to the following:
190	190		NOTICE REGARDING PROPERTY INSURANCE: ANY INSURANCE MAINTAINED BY A
191	191		SELLER, LENDER, OR OTHER PERSON WHO IS NOT THE BUYER OF THIS
192	192		PROPERTY MAY NOT PROVIDE COVERAGE TO THE BUYER IF THE BUYER SUFFERS
193	193		A LOSS OR INCURS LIABILITY IN CONNECTION WITH THE PROPERTY. TO
194	194		ENSURE THE BUYER'S INTERESTS ARE PROTECTED, THE BUYER SHOULD
195	195		PURCHASE THE BUYER'S OWN PROPERTY INSURANCE. BEFORE PURCHASING
196	196		THIS PROPERTY, YOU MAY WISH TO CONSULT AN INSURANCE AGENT REGARDING
197	197		THE INSURANCE COVERAGE AVAILABLE TO YOU AS A BUYER OF THE PROPERTY.
198	198		(b) The disclosure statement required under Subsection (a)
199	199		must be dated and signed by the wrap borrower when the wrap borrower
200	200		receives the statement.
201	201		(c) The finance commission by rule shall adopt a model
202	202		disclosure statement that satisfies the requirements of Subsection
203	203		(a).
204	204		(d) If the disclosure statement required under Subsection
205	205		(a) and any disclosure required by Section 159.102 are received by
206	206		the wrap borrower on or before the closing date of the wrap mortgage
207	207		loan, the wrap borrower may rescind the wrap mortgage loan
208	208		agreement and any related purchase agreement or other agreement
209	209		relating to the loan transaction not later than the seventh day
210	210		after the date of receipt of the disclosure statement, regardless
211	211		of whether the disclosure is timely made. On rescission under this
212	212		subsection, the wrap borrower is entitled to a return of any earnest
213	213		money, escrow amounts, down payment, or other fees or charges paid
214	214		in connection with the wrap mortgage loan, the related purchase
215	215		transaction, and any other related transaction.
216	216		Sec. 159.102. FOREIGN LANGUAGE REQUIREMENT. If the
217	217		negotiations that precede the execution of the wrap mortgage loan
218	218		agreement are conducted primarily in a language other than English,
219	219		the wrap lender shall provide a copy of a written disclosure
220	220		statement required under Section 159.101 of this code or Section
221	221		5.016, Property Code, in that language to the wrap borrower.
222	222		Sec. 159.103. FAILURE TO PROVIDE DISCLOSURE: TOLLING OF
223	223		LIMITATIONS. If a wrap lender fails to provide the disclosure
224	224		statement as required by Section 159.101 or fails to provide the
225	225		disclosure statement in the language required by Section 159.102,
226	226		the limitations period applicable to any cause of action of the wrap
227	227		borrower against the wrap lender arising out of the wrap lender's
228	228		violation of a law of this state in connection with the wrap
229	229		mortgage loan transaction is tolled until the 120th day after the
230	230		date the required disclosure statement is provided.
231	231		Sec. 159.104. FAILURE TO PROVIDE DISCLOSURE BEFORE CLOSING;
232	232		RIGHT OF RESCISSION. (a) Subject to Subsection (b), if a wrap
233	233		mortgage loan is closed without the wrap lender providing the
234	234		disclosure statement required by Section 159.101 or any disclosure
235	235		required by Section 159.102, the wrap borrower may rescind the wrap
236	236		mortgage loan agreement and the related purchase agreement at any
237	237		time by providing the wrap lender notice of rescission in writing.
238	238		(b) If the wrap borrower receives a required disclosure
239	239		statement under Section 159.101 or 159.102 after the date the wrap
240	240		mortgage loan is closed but before the wrap borrower provides
241	241		notice of rescission, the wrap borrower may rescind the wrap
242	242		mortgage loan agreement and the related purchase agreement in
243	243		writing on or before the 21st day after the date of receipt of the
244	244		disclosure statement.
245	245		(c) Not later than the 30th day after the date the wrap
246	246		borrower provides notice of rescission under this section, the wrap
247	247		lender shall return to the wrap borrower:
248	248		(1) all principal and interest payments made by the
249	249		wrap borrower on the wrap mortgage loan;
250	250		(2) any money or property given as earnest money, a
251	251		down payment, or otherwise in connection with the wrap mortgage
252	252		loan or related purchase transaction; and
253	253		(3) any escrow amounts for the wrap mortgage loan or
254	254		related purchase transaction.
255	255		(d) On the date on which all of the returned money or
256	256		property described by Subsection (c) is received by the wrap
257	257		borrower, the wrap borrower shall convey to the wrap lender or the
258	258		wrap lender's designee the residential real estate described by
259	259		Section 159.001(7)(A). The wrap borrower shall surrender
260	260		possession of the residential real estate not later than the 30th
261	261		day after the date of the wrap borrower's receipt of the money or
262	262		property returned as described by this subsection.
263	263		(e) Notwithstanding Subsection (a) or (b), the wrap lender
264	264		may avoid rescission if not later than the 30th day after the date
265	265		of receipt of notice of rescission under Subsection (a), the wrap
266	266		lender:
267	267		(1) pays the outstanding balance due on any debt
268	268		described by Section 159.001(7)(A)(ii);
269	269		(2) pays any due and unpaid taxes or other government
270	270		assessment on the residential real estate described by Section
271	271		159.001(7)(A);
272	272		(3) pays to the wrap borrower as damages for
273	273		noncompliance the sum of $1,000 and any reasonable attorney's fees
274	274		incurred by the wrap borrower; and
275	275		(4) provides to the wrap borrower evidence of
276	276		compliance with Subdivisions (1) and (2).
277	277		Sec. 159.105. ENFORCEABILITY OF WRAP LIEN. A lien securing
278	278		a wrap mortgage loan is void unless the wrap mortgage loan and the
279	279		conveyance of the residential real estate securing the loan are
280	280		closed by an attorney or a title company.
281	281		Sec. 159.106. BORROWER'S RIGHT OF ACTION. (a) A wrap
282	282		borrower may bring an action to:
283	283		(1) obtain declaratory or injunctive relief to enforce
284	284		this subchapter;
285	285		(2) recover any actual damages suffered by the wrap
286	286		borrower as a result of a violation of this subchapter; or
287	287		(3) obtain other remedies available under this
288	288		subchapter or in an action under Section 17.50, Business & Commerce
289	289		Code, as otherwise authorized under this subchapter.
290	290		(b) A wrap borrower who prevails in an action under this
291	291		section may recover court costs and reasonable attorney's fees.
292	292		Sec. 159.107. WAIVER OR AVOIDANCE PROHIBITED. (a) Any
293	293		purported waiver of a right of a wrap borrower under this subchapter
294	294		or purported exemption of a person from liability for a violation of
295	295		this subchapter is void.
296	296		(b) A person who is a party to a residential real estate
297	297		transaction may not evade the application of this subchapter by any
298	298		device, subterfuge, or pretense, and any attempt to do so is void
299	299		and a deceptive trade practice under Subchapter E, Chapter 17,
300	300		Business & Commerce Code, and is actionable under that subchapter.
301	301		Sec. 159.108. RULEMAKING AUTHORITY. The finance commission
302	302		may adopt and enforce rules necessary for the intent of or to ensure
303	303		compliance with this subchapter.
304	304		SUBCHAPTER D. DUTIES OWED TO WRAP BORROWER
305	305		Sec. 159.151. MONEY HELD IN TRUST. A person who collects or
306	306		receives a payment from a wrap borrower under the terms of a wrap
307	307		mortgage loan holds the money in trust for the benefit of the
308	308		borrower.
309	309		Sec. 159.152. FIDUCIARY DUTY. A person who collects or
310	310		receives a payment from a wrap borrower under the terms of or in
311	311		connection with a wrap mortgage loan owes a fiduciary duty to the
312	312		wrap borrower to use the payment to satisfy the obligations of the
313	313		obligee under each debt described by Section 159.001(7)(A)(ii) and
314	314		the payment of taxes and insurance for which the wrap lender has
315	315		received any payments from the wrap borrower.
316	316		SUBCHAPTER E. WRAP BORROWER'S RIGHTS
317	317		Sec. 159.201. APPLICABILITY OF SUBCHAPTER. This subchapter
318	318		applies only to a wrap mortgage loan for a purchase of residential
319	319		real estate to be used as the wrap borrower's residence.
320	320		Sec. 159.202. WRAP BORROWER'S RIGHT TO DEDUCT. The wrap
321	321		borrower, without taking judicial action, may deduct from any
322	322		amount owed to the wrap lender under the terms of the wrap mortgage
323	323		loan:
324	324		(1) the amount of any payment made by the wrap borrower
325	325		to an obligee of a debt described by Section 159.001(7)(A)(ii) to
326	326		cure a default by the wrap lender caused by the lender's failure to
327	327		make payments for which the lender is responsible under the terms of
328	328		the wrap mortgage loan; or
329	329		(2) any other amount for which the wrap lender is
330	330		liable to the wrap borrower under the terms of the wrap mortgage
331	331		loan.
332	332		SUBCHAPTER F. ENFORCEMENT OF CERTAIN REGISTRATION REQUIREMENTS
333	333		Sec. 159.251. APPLICABILITY OF SUBCHAPTER. This subchapter
334	334		applies only to a wrap lender who is required to register as a
335	335		residential mortgage loan servicer under Chapter 158.
336	336		Sec. 159.252. INSPECTION; INVESTIGATION. (a) The
337	337		commissioner may conduct an inspection of a wrap lender registered
338	338		under Chapter 158 as the commissioner determines necessary to
339	339		determine whether the wrap lender is complying with that chapter
340	340		and applicable rules. The inspection may include an inspection of
341	341		the books, records, documents, operations, and facilities of the
342	342		wrap lender. The commissioner may share evidence of criminal
343	343		activity gathered during an inspection or investigation with any
344	344		state or federal law enforcement agency.
345	345		(b) For reasonable cause, the commissioner at any time may
346	346		investigate a wrap lender registered under Chapter 158 to determine
347	347		whether the lender is complying with that chapter and applicable
348	348		rules.
349	349		(c) The commissioner may conduct an undercover or covert
350	350		investigation only if the commissioner, after due consideration of
351	351		the circumstances, determines that the investigation is necessary
352	352		to prevent immediate harm and to carry out the purposes of Chapter
353	353		158.
354	354		(d) The finance commission by rule shall provide guidelines
355	355		to govern an inspection or investigation under this section,
356	356		including rules to:
357	357		(1) determine the information and records of the wrap
358	358		lender to which the commissioner may demand access during an
359	359		inspection or investigation; and
360	360		(2) establish what constitutes reasonable cause for an
361	361		investigation.
362	362		(e) Information obtained by the commissioner during an
363	363		inspection or investigation under this section is confidential
364	364		unless disclosure of the information is permitted or required by
365	365		other law.
366	366		(f) The commissioner may share information gathered during
367	367		an investigation under this section with a state or federal agency.
368	368		The commissioner may share information gathered during an
369	369		inspection with a state or federal agency only if the commissioner
370	370		determines there is a valid reason for the sharing.
371	371		(g) The commissioner may require reimbursement of expenses
372	372		for each examiner for an on-site examination or inspection of a
373	373		registered wrap lender under this section if records are located
374	374		out of state and are not made available for examination or
375	375		inspection by the examiner in this state. The finance commission by
376	376		rule shall set the maximum amount for the reimbursement of expenses
377	377		authorized under this subsection.
378	378		Sec. 159.253. ISSUANCE AND ENFORCEMENT OF SUBPOENA.
379	379		(a) During an investigation conducted under this subchapter, the
380	380		commissioner may issue a subpoena that is addressed to a peace
381	381		officer of this state or other person authorized by law to serve
382	382		citation or perfect service. The subpoena may require a person to
383	383		give a deposition, produce documents, or both.
384	384		(b) If a person disobeys a subpoena or if a person appearing
385	385		in a deposition in connection with the investigation refuses to
386	386		testify, the commissioner may petition a district court in Travis
387	387		County to issue an order requiring the person to obey the subpoena,
388	388		testify, or produce documents relating to the matter. The court
389	389		shall promptly set an application to enforce a subpoena issued
390	390		under Subsection (a) for hearing and shall cause notice of the
391	391		application and the hearing to be served on the person to whom the
392	392		subpoena is directed.
393	393		SUBCHAPTER G. ENFORCEMENT OF CHAPTER
394	394		Sec. 159.301. CEASE AND DESIST ORDER. (a) The
395	395		commissioner, if the commissioner has reasonable cause to believe
396	396		that a wrap lender or wrap mortgage loan originator to whom this
397	397		chapter applies has violated or is about to violate this chapter,
398	398		may issue without notice and hearing an order to cease and desist
399	399		from continuing a particular action or an order to take affirmative
400	400		action, or both, to enforce compliance with this chapter.
401	401		(b) An order issued under Subsection (a) must contain a
402	402		reasonably detailed statement of the facts on which the order is
403	403		made. If a person against whom the order is made requests a
404	404		hearing, the commissioner shall set and give notice of a hearing
405	405		before the commissioner or a hearings officer. The hearing shall be
406	406		governed by Chapter 2001, Government Code. Based on the findings of
407	407		fact, conclusions of law, and recommendations of the hearings
408	408		officer, the commissioner by order may find a violation has
409	409		occurred or not occurred.
410	410		(c) If a hearing is not requested under Subsection (b) on or
411	411		before the 30th day after the date on which an order is made, the
412	412		order is considered final and not appealable.
413	413		(d) The commissioner, after giving notice and an
414	414		opportunity for hearing, may impose against a person who violates a
415	415		cease and desist order an administrative penalty in an amount not to
416	416		exceed $1,000 for each day of the violation. In addition to any
417	417		other remedy provided by law, the commissioner may institute in
418	418		district court a suit for injunctive relief and to collect the
419	419		administrative penalty. A bond is not required of the commissioner
420	420		with respect to injunctive relief granted under this subsection.
421	421		SECTION 4. Section 180.003, Finance Code, is amended by
422	422		amending Subsection (a) and adding Subsection (d) to read as
423	423		follows:
424	424		(a) The following persons are exempt from this chapter:
425	425		(1) a registered mortgage loan originator when acting
426	426		for an entity described by Section 180.002(16)(A)(i), (ii), or
427	427		(iii);
428	428		(2) an individual who offers or negotiates terms of a
429	429		residential mortgage loan with or on behalf of an immediate family
430	430		member of the individual;
431	431		(3) a licensed attorney who negotiates the terms of a
432	432		residential mortgage loan on behalf of a client as an ancillary
433	433		matter to the attorney's representation of the client, unless the
434	434		attorney:
435	435		(A) takes a residential mortgage loan
436	436		application; and
437	437		(B) offers or negotiates the terms of a
438	438		residential mortgage loan;
439	439		(4) an individual who offers or negotiates terms of a
440	440		residential mortgage loan secured by a dwelling that serves as the
441	441		individual's residence;
442	442		(5) subject to Subsection (d), an owner of residential
443	443		real estate who in any 12-consecutive-month period makes no more
444		-	than ~~three [~~five] residential mortgage loans to purchasers of the
445		-	~~property~~ for all or part of the purchase price of the residential
446		-	~~real estate~~ against which the mortgage is secured; and
	444	+	than five residential mortgage loans to purchasers of the property
	445	+	for all or part of the purchase price of the residential real estate
	446	+	against which the mortgage is secured; and
447	447		(6) subject to Subsection (d), an owner of a dwelling
448		-	who in any 12-consecutive-month period makes no more than ~~three~~
449		-	~~[five]~~ residential mortgage loans to purchasers of the property for
450		-	~~all or~~ part of the purchase price of the dwelling against which the
	448	+	who in any 12-consecutive-month period makes no more than five
	449	+	residential mortgage loans to purchasers of the property for all or
	450	+	part of the purchase price of the dwelling against which the
451	451		mortgage or security interest is secured.
452	452		(d) In determining eligibility for an exemption under
453	453		Subsection (a)(5) or (6), two or more owners of residential real
454		-	estate are considered a single owner for the purpose of computing
455		-	the number of mortgage loans made within the period specified by
456		-	that subdivision if any of the owners are an entity or an affiliate
457		-	of an entity, including a general partnership, limited partnership,
458		-	limited liability company, or corporation, as defined by Section
459		-	1.002, Business Organizations Code.
	454	+	estate or a dwelling, as applicable, are considered a single owner
	455	+	for the purpose of computing the number of mortgage loans made
	456	+	within the period specified by those subdivisions if any of the
	457	+	owners are affiliates, as defined by Section 1.002, Business
	458	+	Organizations Code, or if any of the owners have substantially
	459	+	common ownership, as determined by the savings and mortgage lending
	460	+	commissioner.
460	461		SECTION 5. This Act takes effect January 1, 2022.
461		-	______________________________ ______________________________
462		-	President of the Senate Speaker of the House
463		-	I hereby certify that S.B. No. 43 passed the Senate on
464		-	April 6, 2021, by the following vote: Yeas 31, Nays 0; and that the
465		-	Senate concurred in House amendment on May 10, 2021, by the
466		-	following vote: Yeas 30, Nays 0.
467		-	______________________________
468		-	Secretary of the Senate
469		-	I hereby certify that S.B. No. 43 passed the House, with
470		-	amendment, on May 5, 2021, by the following vote: Yeas 101,
471		-	Nays 46, one present not voting.
472		-	______________________________
473		-	Chief Clerk of the House
474		-	Approved:
475		-	______________________________
476		-	Date
477		-	______________________________
478		-	Governor