Effective May 6, 2010, the Finance Commission of Texas (Finance Commission) adopts new Chapter 2 to Title 7 of the Texas Administrative Code (7 TAC Chapter 2, §§2.101 – 2.105). The purpose of new Chapter 2 is to provide for certain application procedures and fees for those individuals applying for or renewing their licenses as a residential mortgage loan originator (RMLO) with the Office of Consumer Credit Commissioner (OCCC), as required by Chapter 180 of the Texas Finance Code enacted by the 2009 session of the Texas Legislature in House Bill 10 (i.e., Texas SAFE Act). For a detailed summary of the Texas SAFE Act, see our November 13, 2009 memorandum posted on our website http://www.bmandg.com/ under “Our Clients and Friends” web page.
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Proposed Residential Mortgage Loan Originator Regulations
The Finance Commission of Texas (“Finance Commission”) proposes amendments to Sections 80.1, 80.2, 80.8, 80.9, 80.10, 80.11, 80.12, 80.13, 80.14, 80.15, 80.20, 80.21, 80.22, and 80.23 of the Mortgage Broker and Loan Officer Licensing regulations contained in the Texas Administrative Code at 7 TAC Chapter 80. In addition, the Finance Commission proposes new Subchapter L, Licensing, Sections 80.301, 80.302, 80.303, 80.304, 80.305, 80.306, and 80.307. The text of these proposed amended and new regulations (“Proposed Rules”) may be found in the above cited issue of the Texas Register, and you are advised to read these Proposed Rules and not rely on the summary contained in this memorandum.
Discount Points – Discount Points are not included in Home Equity Cap
On January 8, 2009, the Texas Court of Appeals, Third District, at Austin, issued its opinion1 in the civil suit filed by the Association of Community Organizations for Reform Now (ACORN) seeking to invalidate a number of the home equity interpretations (Rules) issued jointly by the Finance Commission of Texas and the Credit Union Commission of Texas (Commissions). The ACORN opinion, in addition to other decisions affecting the Rules that will be the subject of a later memorandum, affirmed the trial court’s judgment invalidating Rule 153.1(11), which defines “interest” for purposes of the three percent fee cap imposed by Section 50(a)(6)(E) of Article XVI of the Texas Constitution (3% fee cap). Rule 153.1(11) defines interest to be “interest as defined in the Texas Finance Code §301.002(4) [sic] and as interpreted by the courts.” Section 301.002(a)(4) defines interest, in pertinent part, as “compensation for the use, forbearance, or detention of money.”
Legislative Update, 81st Regular Session of the Texas Legislature, 2009 – Bills Effective on and after September 1, 2009
This is the third and last legislative update from the 81st Regular Session of the Texas Legislature, 2009, prepared by this firm and summarizes House and Senate Bills effective on September 1, 2009, that we consider are of interest to our clients.
Legislative Update from 81st Regular Session of the Texas Legislature, 2009 – Bills Effective Immediately
This is the first of several legislative updates prepared by this firm and summarizes those bills effective before September 1, 2009, that we consider of interest to our clients. The legislative updates that follow this update will summarize, respectively, (i) those bills that we consider important enough to be the subject of a separate legislative update, and (ii) bills effective on and after September 1, 2009, that we consider of interest to our clients.
Texas Home Equity Lending – 2009 Update
This memorandum will provide an overview of home equity lending embodied in Article XVI, Section 50, of the Texas Constitution and will also discuss some of the issues lenders face. The full text of Section 50, current to date, is attached to this memorandum (for ease of reference, the home equity and HELOC provisions are highlighted in bold typeface). All references in this memorandum to “sections”, “subsections”, and “parts” refer to the various provisions of Section 50, unless otherwise stated.
Mortgage Broker and Loan Officer Rules
The Finance Commission of Texas (the “Commission”) has adopted amendments to §80.2, concerning definitions; §80.3, concerning licensing – general; §80.5, concerning renewals; §80.6, concerning sponsorship and termination of sponsorship; §80.10, concerning prohibition on false, misleading, or deceptive practices and improper dealings; §80.12, concerning display of license verification and license record changes; §80.13, concerning books and records; §80.18, concerning enforceability of liens; and, §80.23, concerning annual reports. Notice of the Commission’s adoption of these amendments was published in the October 31, 2008 issue of the Texas Register (Vol. 33, No. 44). These amendments were adopted without changes to the text of the proposed amendments published for comment in the August 22, 2008 issue of the Texas Register (Vol. 33, No. 34). See this firm’s August 25, 2008 memo advising you of the proposed amendments and the Commission’s request for comments.
Home Equity Lending – Revisions to Interpretations §§153.22, 153.84
The Finance Commission of Texas and the Texas Credit Union Commission (“Commissions”) have jointly revised the following home equity Interpretations: §153.22 (Copies of Documents) and §153.84 (Restrictions on Devices and Methods to Obtain a HELOC Advance) to comply with the December 4, 2007 amendments to §§50(a)(6) and (t)(3), Article XVI, of the Texas Constitution. These revised Interpretations are published in the July 4, 2008 issue of the Texas Register and became effective July 10, 2008.
Home Equity Lending – Proposed Amendments to Interpretations §§153.22, 153.51, and 153.84
The Finance Commission of Texas and the Texas Credit Union Commission (“Commissions”) jointly propose amendments to Interpretations 7 TAC §§ 153.22, 153.51, and 153.84 relating to interpretations of Sections 50(a)(6), (g), and (t)(3), Article XVI, Texas Constitution, regarding home equity lending on Texas homestead. These proposed amendments are published for comment in the March 14, 2008 issue of the Texas Register (Vol. 33, No. 11).
Texas Home Equity Loans – New 12-day Notice and other Requirements
This memorandum is a follow-up to our November 1, 2007, memorandum on the same subject. Constitutional Amendment HJR 72, which amends the home equity provisions in Article 16, Section 50 of the Texas Constitution, approved by the voters on November 6, 2007, will take effect on December 4, 2007 (the date of the official vote canvass by the governor confirming statewide majority approval).