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AN ACT
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relating to the regulation of certain mortgage banker employees who |
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are residential mortgage loan originators; providing penalties. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 157.001, Finance Code, is amended to |
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read as follows: |
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Sec. 157.001. SHORT TITLE. This chapter may be cited as the |
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Mortgage Banker Registration and Residential Mortgage Loan |
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Originator License Act. |
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SECTION 2. Section 157.002, Finance Code, is amended to |
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read as follows: |
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Sec. 157.002. DEFINITIONS. In this chapter: |
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(1) "Commissioner" means the savings and mortgage |
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lending commissioner. |
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(2) "Disciplinary action" means any order by the |
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commissioner that requires one or more of the following: |
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(A) suspension or revocation of a residential |
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mortgage loan originator license under this chapter; |
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(B) probation of a suspension or revocation of a |
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residential mortgage loan originator license under this chapter on |
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terms and conditions that the commissioner determines appropriate; |
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(C) a reprimand of a person with a residential |
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mortgage loan originator license under this chapter; or |
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(D) an administrative penalty imposed on a person |
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holding a residential mortgage loan originator license under this |
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chapter. |
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(3) "Finance commission" means the Finance Commission |
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of Texas. |
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(4) "Mortgage banker" means a person who: |
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(A) accepts an application for a residential |
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mortgage loan or makes a residential mortgage loan; and |
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(B) is an approved or authorized: |
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(i) mortgagee with direct endorsement |
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underwriting authority granted by the United States Department of |
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Housing and Urban Development; |
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(ii) seller or servicer of the Federal |
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National Mortgage Association or the Federal Home Loan Mortgage |
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Corporation; or |
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(iii) issuer for the Government National |
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Mortgage Association. |
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(5) "Residential mortgage [(3) "Mortgage] loan" means |
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a debt secured by a [first] lien on residential real property |
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designed principally for occupancy by one to four families that is |
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created by a deed of trust, security deed, or other security |
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instrument. |
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(6) "Residential mortgage loan originator" has the |
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meaning assigned by Section 180.002. |
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SECTION 3. Section 157.003, Finance Code, is amended by |
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amending Subsections (b), (c), and (d) and adding Subsection (b-1) |
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to read as follows: |
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(b) To register under this chapter, a mortgage banker shall |
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file with the commissioner a statement that contains: |
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(1) the name and address of the mortgage banker; |
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(2) the name, address, and telephone number of the |
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representative of the mortgage banker to be contacted regarding a |
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written complaint; [and] |
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(3) a list of the locations in this state at which the |
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person conducts the business of a mortgage banker; and |
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(4) a list of employees of the mortgage banker who are |
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residential mortgage loan originators. |
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(b-1) The list of mortgage banker employees required by |
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Subsection (b)(4) must be promptly updated to reflect any changes, |
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and the updated list must be submitted to the commissioner. |
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(c) An employee of a mortgage banker who is not a |
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residential mortgage loan originator is not required to register or |
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be licensed under this chapter. |
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(d) Except as provided by Section 157.008(b), the [The] |
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commissioner may not require a mortgage banker to provide |
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information other than information contained in the registration |
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statement. |
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SECTION 4. Section 157.004, Finance Code, is amended to |
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read as follows: |
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Sec. 157.004. EXEMPTIONS. This chapter does not apply to: |
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(1) a federally insured bank, savings bank, savings |
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and loan association, Farm Credit System Institution, or credit |
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union; |
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(2) a [an affiliate or] subsidiary of a federally |
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insured bank, savings bank, savings and loan association, Farm |
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Credit System Institution, or credit union; |
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(3) a person licensed as a mortgage broker under |
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Chapter 156; [or] |
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(4) an authorized lender licensed under Chapter 342; |
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or |
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(5) the state or a governmental agency, political |
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subdivision, or other instrumentality of the state, or an employee |
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of the state or a governmental agency, political subdivision, or |
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instrumentality of the state who is acting within the scope of the |
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person's employment [if:
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[(A)
the authorized lender includes with an
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application for a mortgage loan a notice that is substantially
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similar to the notice required by Section 157.007 and provides the
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method of submitting complaints to the consumer credit
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commissioner;
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[(B)
the authorized lender uses the forms adopted
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by the Finance Commission of Texas under Section 157.011(b); and
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[(C)
the Finance Commission of Texas determines
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by rule that the consumer credit commissioner may suspend or revoke
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a license issued under Chapter 342 if the authorized lender engages
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in unlawful or unfair practices while making a mortgage loan]. |
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SECTION 5. Section 157.007, Finance Code, is amended to |
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read as follows: |
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Sec. 157.007. DISCLOSURE STATEMENT. A mortgage banker |
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shall include the following notice to a residential mortgage loan |
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applicant with an application for a residential mortgage loan: |
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"COMPLAINTS REGARDING MORTGAGE BANKERS SHOULD BE SENT TO THE |
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DEPARTMENT OF SAVINGS AND MORTGAGE LENDING, |
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______________________________ (street address of the Department |
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of Savings and Mortgage Lending). A TOLL-FREE CONSUMER HOTLINE IS |
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AVAILABLE AT _______________ (telephone number of the Department of |
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Savings and Mortgage Lending's toll-free consumer hotline)." |
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SECTION 6. Section 157.009(d), Finance Code, is amended to |
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read as follows: |
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(d) The commissioner may revoke the registration of a |
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mortgage banker after considering a complaint filed under this |
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chapter if the commissioner concludes that the mortgage banker has |
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engaged in an intentional course of conduct to violate federal or |
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state law or has engaged in an intentional course of conduct that |
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constitutes improper, fraudulent, or dishonest dealings or has |
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engaged in a negligent course of conduct exhibited through pattern |
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or practice. The commissioner shall recite the basis of the |
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decision in an order revoking the registration. |
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SECTION 7. Section 157.011, Finance Code, is amended by |
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adding Subsection (c) to read as follows: |
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(c) The finance commission may adopt rules under this |
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chapter as required to carry out the intentions of the federal |
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Secure and Fair Enforcement for Mortgage Licensing Act of 2008 |
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(Pub. L. No. 110-289). |
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SECTION 8. Chapter 157, Finance Code, is amended by adding |
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Sections 157.012 through 157.031 to read as follows: |
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Sec. 157.012. LICENSE REQUIRED FOR CERTAIN EMPLOYEES OF |
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MORTGAGE BANKERS. (a) An employee of a mortgage banker may not act |
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in the capacity of a residential mortgage loan originator unless |
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the employee: |
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(1) is licensed under this chapter and enrolled with |
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the Nationwide Mortgage Licensing System and Registry as required |
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by Section 180.052; and |
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(2) complies with other applicable requirements of |
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Chapter 180 and rules adopted by the finance commission under that |
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chapter. |
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(b) The finance commission may adopt rules under this |
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chapter as required to carry out the intentions of the federal |
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Secure and Fair Enforcement for Mortgage Licensing Act of 2008 |
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(Pub. L. No. 110-289). |
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(c) To be eligible to be licensed as a residential mortgage |
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loan originator, an employee of a mortgage banker, in addition to |
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the requirements of Subsection (a), must: |
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(1) satisfy the commissioner as to the employee's good |
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moral character, including the employee's honesty, |
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trustworthiness, and integrity; |
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(2) not be in violation of this chapter or a rule |
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adopted under this chapter; and |
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(3) provide the commissioner with satisfactory |
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evidence that the employee meets the qualifications provided by |
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Chapter 180. |
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Sec. 157.013. APPLICATION FOR LICENSE; FEES. (a) An |
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application for a residential mortgage loan originator license must |
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be: |
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(1) in writing; |
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(2) under oath; and |
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(3) on the form prescribed by the commissioner. |
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(b) An application for a residential mortgage loan |
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originator license must be accompanied by an application fee in an |
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amount determined by the commissioner, not to exceed $500. |
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(c) An application fee under this section is not refundable |
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and may not be credited or applied to any other fee or indebtedness |
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owed by the person paying the fee. |
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Sec. 157.014. ISSUANCE OF RESIDENTIAL MORTGAGE LOAN |
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ORIGINATOR LICENSE. (a) The commissioner shall issue a |
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residential mortgage loan originator license to an applicant if the |
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commissioner determines that the applicant meets all requirements |
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and conditions for the license. |
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(b) Each residential mortgage loan originator license must |
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have a unique identifier as provided by Chapter 180. |
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Sec. 157.015. RENEWAL OF LICENSE. (a) A residential |
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mortgage loan originator license issued under this chapter is valid |
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for one year and may be renewed on or before its expiration date. |
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(b) Each residential mortgage loan originator license will |
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be renewed for not more than a one-year period expiring December 31 |
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of each calendar year. |
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(c) An application for renewal of a residential mortgage |
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loan originator license shall meet the requirements of Section |
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157.013. |
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(d) An application for renewal of a residential mortgage |
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loan originator license must meet all of the standards and |
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qualifications for license renewal under Chapter 180. |
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(e) The commissioner shall issue a renewal residential |
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mortgage loan originator license if the commissioner finds that the |
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applicant meets all of the requirements and conditions for the |
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license. |
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(f) The commissioner may deny the renewal application for a |
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residential mortgage loan originator license for the same reasons |
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and grounds on which the commissioner could have denied an original |
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application for a license. |
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(g) The commissioner may deny the renewal application for a |
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residential mortgage loan originator license if: |
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(1) the person seeking the renewal of the residential |
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mortgage loan originator license is in violation of this chapter or |
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Chapter 180, an applicable rule adopted under this chapter or |
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Chapter 180, or any order previously issued to the person by the |
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commissioner; |
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(2) the person seeking renewal of the residential |
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mortgage loan originator license is in default in the payment of any |
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administrative penalty, fee, charge, or other indebtedness owed |
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under this title; |
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(3) the person seeking the renewal of the residential |
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mortgage loan originator license is in default on a student loan |
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administered by the Texas Guaranteed Student Loan Corporation, |
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under Section 57.491, Education Code; or |
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(4) during the current term of the license, the |
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commissioner becomes aware of any fact that would have been grounds |
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for denial of an original license if the fact had been known by the |
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commissioner on the date the license was granted. |
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Sec. 157.016. RENEWAL AFTER EXPIRATION OF LICENSE; NOTICE. |
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(a) A person whose residential mortgage loan originator license |
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has expired may not engage in activities that require a license |
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until the license has been renewed. |
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(b) A person whose residential mortgage loan originator |
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license has not been renewed before January 1 but who is otherwise |
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eligible to renew a license, and does so before March 1, may renew |
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the license by paying the commissioner a reinstatement fee in an |
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amount that is equal to 150 percent of the required renewal fee. |
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(c) A person whose residential mortgage loan originator |
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license has not been renewed before March 1 may not renew the |
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license. The person may obtain a new license by complying with the |
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requirements and procedures for obtaining an original license. |
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(d) Not later than the 60th day before the date a person's |
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residential mortgage loan originator license is scheduled to |
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expire, the commissioner or the commissioner's authorized |
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representative shall send written notice of the impending |
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expiration to the person at the person's last known address |
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according to the official licensing records. |
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Sec. 157.017. DENIAL OF APPLICATIONS AND RENEWALS. (a) If |
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the commissioner declines or fails to issue or renew a residential |
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mortgage loan originator license, the commissioner shall promptly |
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give written notice to the applicant that the application or |
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renewal, as appropriate, was denied. |
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(b) Before the applicant or a person requesting the renewal |
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of a residential mortgage loan originator license may appeal a |
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determination to a district court as provided by Section |
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157.026(d), the applicant or person must file with the |
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commissioner, not later than the 10th day after the date on which |
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notice under Subsection (a) is received, an appeal of the ruling |
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requesting a time and place for a hearing before an administrative |
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law judge designated by the commissioner. |
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(c) The designated administrative law judge shall set the |
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time and place for a hearing requested under Subsection (b) not |
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later than the 90th day after the date on which the appeal is |
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received. The administrative law judge shall provide at least 10 |
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days' notice of the hearing to the applicant or person requesting |
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the renewal. The time of the hearing may be continued periodically |
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with the consent of the applicant or person requesting the renewal. |
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After the hearing, the commissioner shall enter an order relative |
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to the applicant based on the findings of fact, conclusions of law, |
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and recommendations of the administrative law judge. |
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(d) If an applicant or person requesting the renewal fails |
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to request a hearing under this section, the commissioner's refusal |
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to issue or renew a license is final and not subject to review by the |
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courts. |
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(e) A hearing held under this section is governed by Chapter |
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2001, Government Code. An appeal of a final order issued under this |
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section may be made in accordance with Section 157.026(d). |
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(f) A person who requests a hearing under this section shall |
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be required to pay a deposit to secure the payment of the costs of |
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the hearing in an amount to be determined by the commissioner not to |
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exceed $500. The entire deposit shall be refunded to the person if |
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the person prevails in the contested case hearing. If the person |
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does not prevail, any portion of the deposit in excess of the costs |
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of the hearing assessed against that person shall be refunded. |
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(g) A person whose application for a license has been denied |
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is not eligible to be licensed for a period of two years after the |
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date the denial becomes final, or a shorter period determined by the |
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commissioner after evaluating the specific circumstances of the |
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person's subsequent application. The finance commission may adopt |
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rules to provide conditions for which the commissioner may shorten |
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the time for eligibility for a new license. |
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Sec. 157.018. PROBATIONARY AND PROVISIONAL LICENSES. (a) |
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The commissioner may issue probationary and provisional licenses. |
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(b) The finance commission by rule shall adopt reasonable |
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terms and conditions for probationary and provisional licenses. |
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Sec. 157.019. MODIFICATION OF LICENSE. (a) Before the 10th |
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day preceding the effective date of an address change, a mortgage |
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banker employee who is a residential mortgage loan originator shall |
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notify the commissioner or authorized designee in writing of the |
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new address. |
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(b) A person licensed under this chapter must notify the |
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commissioner or the commissioner's authorized designee not later |
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than the 10th day after the date of any change in the person's name |
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for the issuance of an amended license. |
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Sec. 157.020. ANNUAL CALL REPORT. (a) Each mortgage banker |
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shall file an annual call report with the commissioner or the |
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commissioner's authorized designee on a form prescribed by the |
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commissioner or authorized designee. The report is a statement of |
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condition of the mortgage banker and the mortgage banker's |
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operations, including financial statements and production activity |
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volumes. |
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(b) The information contained in the call report related to |
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residential mortgage loan origination volume or other trade |
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information is confidential and may not be disclosed by the |
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commissioner or authorized designee. |
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Sec. 157.021. INSPECTION; INVESTIGATIONS. (a) The |
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commissioner may conduct an inspection of a person licensed as a |
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residential mortgage loan originator as the commissioner |
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determines necessary to determine whether the person is complying |
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with this chapter, Chapter 180, and applicable rules. An |
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inspection under this subsection may include inspection of the |
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books, records, documents, operations, and facilities of the |
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person. The commissioner may request the assistance and |
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cooperation of the mortgage banker in providing needed documents |
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and records. The commissioner may not make a request of the |
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mortgage banker for documents and records unrelated to the person |
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being investigated or inspected. The commissioner may share |
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evidence of criminal activity gathered during an inspection or |
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investigation with any state or federal law enforcement agency. |
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(b) On the signed written complaint of a person, the |
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commissioner shall investigate the actions and records of a person |
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licensed as a residential mortgage loan originator if the |
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complaint, or the complaint and documentary or other evidence |
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presented in connection with the complaint, provides a reasonable |
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cause. Before commencing an investigation, the commissioner must |
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notify the licensed residential mortgage loan originator in writing |
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of the complaint and that the commissioner intends to investigate |
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the matter. |
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(c) For reasonable cause, the commissioner at any time may |
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investigate a person licensed as a residential mortgage loan |
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originator to determine whether the person is complying with this |
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chapter, Chapter 180, and applicable rules. |
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(d) The commissioner may conduct an undercover or covert |
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investigation only if the commissioner, after due consideration of |
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the circumstances, determines that the investigation is necessary |
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to prevent immediate harm and to carry out the purposes of this |
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chapter. |
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(e) The finance commission by rule shall provide guidelines |
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to govern an inspection or investigation, including rules to: |
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(1) determine the information and records of the |
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licensed residential mortgage loan originator to which the |
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commissioner may demand access during an inspection or an |
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investigation; and |
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(2) establish what constitutes reasonable cause for an |
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investigation. |
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(f) Information obtained by the commissioner during an |
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inspection or an investigation is confidential unless disclosure of |
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the information is permitted or required by other law. |
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(g) The commissioner may share information gathered during |
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an investigation or inspection with any state or federal agency |
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only if the commissioner determines there is a valid reason for the |
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sharing. |
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Sec. 157.022. ISSUANCE AND ENFORCEMENT OF SUBPOENA. (a) |
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During an investigation, the commissioner may issue a subpoena that |
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is addressed to a peace officer of this state or other person |
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authorized by law to serve citation or perfect service. The |
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subpoena may require a person to give a deposition, produce |
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documents, or both. |
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(b) If a person disobeys a subpoena or if a person appearing |
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in a deposition in connection with the investigation refuses to |
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testify, the commissioner may petition a district court in Travis |
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County to issue an order requiring the person to obey the subpoena, |
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testify, or produce documents relating to the matter. The court |
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shall promptly set an application to enforce a subpoena issued |
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under Subsection (a) for hearing and shall cause notice of the |
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application and the hearing to be served on the person to whom the |
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subpoena is directed. |
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Sec. 157.023. ADMINISTRATIVE PENALTY. (a) The |
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commissioner, after notice and opportunity for a hearing, may |
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impose an administrative penalty on a person licensed as a |
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residential mortgage loan originator under this chapter who |
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violates this chapter or a rule or order adopted under this chapter. |
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(b) The amount of the penalty may not exceed $2,500, and |
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each day a violation continues or occurs is a separate violation for |
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the purpose of imposing a penalty. The amount shall be based on: |
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(1) the seriousness of the violation, including the |
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nature, circumstances, extent, and gravity of the violation; |
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(2) the history of previous violations; |
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(3) the amount necessary to deter a future violation; |
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(4) efforts to correct the violation; and |
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(5) any other matter that justice may require. |
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(c) The enforcement of the penalty may be stayed during the |
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time the order is under judicial review if the person pays the |
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penalty to the clerk of the court or files a supersedeas bond with |
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the court in the amount of the penalty. A person who cannot afford |
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to pay the penalty or file the bond may stay the enforcement by |
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filing an affidavit in the manner required by the Texas Rules of |
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Civil Procedure for a party who cannot afford to file security for |
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costs, subject to the right of the commissioner to contest the |
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affidavit as provided by those rules. |
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(d) The attorney general may sue to collect the penalty. |
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(e) An appeal of an administrative penalty under this |
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section is considered to be a contested case under Chapter 2001, |
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Government Code. |
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Sec. 157.024. DISCIPLINARY ACTION; CEASE AND DESIST ORDER. |
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(a) The commissioner may order disciplinary action against a |
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licensed residential mortgage loan originator when the |
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commissioner, after notice and opportunity for a hearing, has |
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determined that the person: |
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(1) obtained a license, including a renewal of a |
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license, under this chapter through a false or fraudulent |
|
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representation or made a material misrepresentation in an |
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application for a license or for the renewal of a license under this |
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chapter; |
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(2) published or caused to be published an |
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advertisement related to the business of a residential mortgage |
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loan originator that: |
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(A) was misleading; |
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(B) was likely to deceive the public; |
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(C) in any manner tended to create a misleading |
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impression; |
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(D) failed to identify as a licensed residential |
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mortgage loan originator the person causing the advertisement to be |
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published; or |
|
|
(E) violated federal or state law; |
|
|
(3) while performing an act for which a license under |
|
|
this chapter is required, engaged in conduct that constitutes |
|
|
improper, fraudulent, or dishonest dealings; |
|
|
(4) entered a plea of nolo contendere to or was |
|
|
convicted of a criminal offense that is a felony or that involves |
|
|
fraud or moral turpitude in a court of this or another state or in a |
|
|
federal court; |
|
|
(5) failed to use a fee collected in advance of closing |
|
|
a residential mortgage loan for a purpose for which the fee was |
|
|
paid; |
|
|
(6) failed within a reasonable time to honor a check |
|
|
issued to the commissioner after the commissioner mailed a request |
|
|
for payment by mail to the person's last known business address as |
|
|
reflected in the commissioner's records; |
|
|
(7) induced or attempted to induce a party to a |
|
|
contract to breach the contract so the person could make a |
|
|
residential mortgage loan; |
|
|
(8) published or circulated an unjustified or |
|
|
unwarranted threat of legal proceedings in matters related to the |
|
|
person's actions or services as a licensed residential mortgage |
|
|
loan originator; |
|
|
(9) aided, abetted, or conspired with a person to |
|
|
circumvent the requirements of this chapter; |
|
|
(10) acted in the dual capacity of a licensed |
|
|
residential mortgage loan originator and real estate broker, |
|
|
salesperson, or attorney in a transaction without the knowledge and |
|
|
written consent of the mortgage applicant or in violation of |
|
|
applicable requirements under federal law; |
|
|
(11) discriminated against a prospective borrower on |
|
|
the basis of race, color, religion, sex, national origin, ancestry, |
|
|
familial status, or disability; |
|
|
(12) failed or refused on demand to: |
|
|
(A) produce a document, book, or record |
|
|
concerning a residential mortgage loan transaction conducted by the |
|
|
licensed residential mortgage loan originator for inspection by the |
|
|
commissioner or the commissioner's authorized personnel or |
|
|
representative; |
|
|
(B) give the commissioner or the commissioner's |
|
|
authorized personnel or representative free access to the books or |
|
|
records relating to the residential mortgage loan originator's |
|
|
business kept by any other person or any business entity through |
|
|
which the residential mortgage loan originator conducts |
|
|
residential mortgage loan origination activities; or |
|
|
(C) provide information requested by the |
|
|
commissioner as a result of a formal or informal complaint made to |
|
|
the commissioner; |
|
|
(13) failed without just cause to surrender, on |
|
|
demand, a copy of a document or other instrument coming into the |
|
|
residential mortgage loan originator's possession that was |
|
|
provided to the residential mortgage loan originator by another |
|
|
person making the demand or that the person making the demand is |
|
|
under law entitled to receive; |
|
|
(14) disregarded or violated this chapter, a rule |
|
|
adopted under this chapter, or an order issued by the commissioner |
|
|
under this chapter; |
|
|
(15) provided false information to the commissioner |
|
|
during the course of an investigation or inspection; |
|
|
(16) paid compensation to a person who is not licensed |
|
|
or exempt under this chapter for acts for which a license under this |
|
|
chapter is required; or |
|
|
(17) established an association, by employment or |
|
|
otherwise, with a person not licensed or exempt under this chapter |
|
|
who was expected or required to act as a residential mortgage loan |
|
|
originator. |
|
|
(b) The commissioner may also order disciplinary action |
|
|
against a licensed residential mortgage loan originator, after |
|
|
notice and opportunity for a hearing, if the commissioner, during |
|
|
the current term of the license, becomes aware of any fact that |
|
|
would have been grounds for denial of an original license if the |
|
|
fact had been known by the commissioner on the date the license was |
|
|
granted. |
|
|
(c) In addition to disciplinary action by the commissioner |
|
|
authorized under Subsections (a) and (b), the commissioner, if the |
|
|
commissioner has reasonable cause to believe that a licensed |
|
|
residential mortgage loan originator has violated or is about to |
|
|
violate this section, may issue without notice and hearing an order |
|
|
to cease and desist continuing a particular action or an order to |
|
|
take affirmative action, or both, to enforce compliance with this |
|
|
chapter. |
|
|
(d) An order issued under Subsection (c) must contain a |
|
|
reasonably detailed statement of the facts on which the order is |
|
|
made. If a residential mortgage loan originator against whom the |
|
|
order is made requests a hearing, the commissioner shall set and |
|
|
give notice of a hearing before the commissioner or an |
|
|
administrative law judge. The hearing shall be governed by Chapter |
|
|
2001, Government Code. Based on the findings of fact, conclusions |
|
|
of law, and recommendations of the administrative law judge, the |
|
|
commissioner by order may find that a violation has occurred or not |
|
|
occurred. |
|
|
(e) If a hearing is not requested under Subsection (d) not |
|
|
later than the 30th day after the date on which an order is made, the |
|
|
order is considered final and not appealable. |
|
|
(f) The commissioner, after giving notice, may impose |
|
|
against a residential mortgage loan originator who violates a cease |
|
|
and desist order an administrative penalty in an amount not to |
|
|
exceed $1,000 for each day of the violation. In addition to any |
|
|
other remedy provided by law, the commissioner may institute in |
|
|
district court a suit for injunctive relief and to collect the |
|
|
administrative penalty. A bond is not required of the commissioner |
|
|
with respect to injunctive relief granted under this subsection. |
|
|
(g) For purposes of Subsection (a), a residential mortgage |
|
|
loan originator is considered convicted if a sentence is imposed on |
|
|
that person, that person receives community supervision, including |
|
|
deferred adjudication community supervision, or the court defers |
|
|
final disposition of that person's case. |
|
|
(h) If a residential mortgage loan originator fails to pay |
|
|
an administrative penalty that has become final or fails to comply |
|
|
with an order of the commissioner that has become final, in addition |
|
|
to any other remedy provided under law, the commissioner, on not |
|
|
less than 10 days' notice to the residential mortgage loan |
|
|
originator, may without a prior hearing suspend the residential |
|
|
mortgage loan originator's license. The suspension continues until |
|
|
the residential mortgage loan originator has complied with the |
|
|
administrative order or paid the administrative penalty. During |
|
|
the period of suspension, the residential mortgage loan originator |
|
|
may not originate a residential mortgage loan, as defined by |
|
|
Section 180.002. |
|
|
(i) An order of suspension under Subsection (h) may be |
|
|
appealed. An appeal is a contested case governed by Chapter 2001, |
|
|
Government Code. A hearing of an appeal of an order of suspension |
|
|
issued under Subsection (h) shall be held not later than the 15th |
|
|
day after the date of receipt of the notice of appeal. The |
|
|
appellant shall be provided at least three days' notice of the time |
|
|
and place of the hearing. |
|
|
(j) An order revoking the license of a residential mortgage |
|
|
loan originator may provide that the person is prohibited, without |
|
|
previously obtaining written consent of the commissioner, from: |
|
|
(1) engaging in the business of originating or making |
|
|
residential mortgage loans, as defined by Section 180.002; |
|
|
(2) otherwise affiliating with a person for the |
|
|
purpose of engaging in the business of originating or making |
|
|
residential mortgage loans, as defined by Section 180.002; and |
|
|
(3) being an employee, officer, director, manager, |
|
|
shareholder, member, agent, contractor, or processor of a mortgage |
|
|
banker, mortgage broker, or mortgage broker loan officer. |
|
|
(k) On notice and opportunity for a hearing, the |
|
|
commissioner may suspend the license of a residential mortgage loan |
|
|
originator under this chapter if an indictment or information is |
|
|
filed or returned alleging that the person committed a criminal |
|
|
offense involving fraud, theft, or dishonesty. The suspension |
|
|
continues until the criminal case is dismissed or the person is |
|
|
acquitted. |
|
|
Sec. 157.025. RESTITUTION. The commissioner may order a |
|
|
residential mortgage loan originator to make restitution for any |
|
|
amount received by that person in violation of this chapter. |
|
|
Sec. 157.026. HEARINGS AND JUDICIAL REVIEW. (a) The |
|
|
commissioner may employ an enforcement staff to investigate and |
|
|
prosecute complaints made against residential mortgage loan |
|
|
originators licensed under this chapter. The commissioner may |
|
|
employ an administrative law judge to conduct hearings under this |
|
|
section. The commissioner may collect and deposit any court costs |
|
|
assessed under a final order. |
|
|
(b) If the commissioner proposes to suspend or revoke a |
|
|
license of a residential mortgage loan originator or if the |
|
|
commissioner refuses to issue or renew a license to an applicant for |
|
|
a residential mortgage loan originator license or person requesting |
|
|
a renewal of a residential mortgage loan originator license under |
|
|
this chapter, the applicant or license holder is entitled to a |
|
|
hearing before the commissioner or an administrative law judge who |
|
|
shall make a proposal for decision to the commissioner. The |
|
|
commissioner or administrative law judge shall prescribe the time |
|
|
and place of the hearing. The hearing is governed by Chapter 2001, |
|
|
Government Code. |
|
|
(c) The commissioner or administrative law judge may issue |
|
|
subpoenas for the attendance of witnesses and the production of |
|
|
records or documents. Process issued by the commissioner or the |
|
|
administrative law judge may extend to all parts of the state and |
|
|
may be served by any person designated by the commissioner or |
|
|
administrative law judge. |
|
|
(d) An individual aggrieved by a ruling, order, or decision |
|
|
of the commissioner has the right to appeal to a district court in |
|
|
the county in which the hearing was held. An appeal under this |
|
|
subsection is governed by Chapter 2001, Government Code. |
|
|
Sec. 157.027. CIVIL ACTIONS AND INJUNCTIVE RELIEF. (a) A |
|
|
residential mortgage loan applicant injured by a violation of this |
|
|
chapter by a residential mortgage loan originator may bring an |
|
|
action for recovery of actual monetary damages and reasonable |
|
|
attorney's fees and court costs. |
|
|
(b) The commissioner, the attorney general, or a |
|
|
residential mortgage loan applicant may bring an action to enjoin a |
|
|
violation of this chapter by a residential mortgage loan |
|
|
originator. |
|
|
(c) A remedy provided by this section is in addition to any |
|
|
other remedy provided by law. |
|
|
Sec. 157.028. BURDEN OF PROOF TO ESTABLISH AN EXEMPTION. |
|
|
The burden of proving an exemption in a proceeding or action brought |
|
|
under this chapter is on the person claiming the benefit of the |
|
|
exemption. |
|
|
Sec. 157.029. RELIANCE ON WRITTEN NOTICES FROM THE |
|
|
COMMISSIONER. A person does not violate this chapter with respect |
|
|
to an action taken or omission made in reliance on a written notice, |
|
|
written interpretation, or written report from the commissioner |
|
|
unless a subsequent amendment to this chapter or a rule adopted |
|
|
under this chapter affects the commissioner's notice, |
|
|
interpretation, or report. |
|
|
Sec. 157.030. COMPLETION OF RESIDENTIAL MORTGAGE |
|
|
ORIGINATION SERVICES. (a) On disbursement of mortgage proceeds to |
|
|
or on behalf of the residential mortgage loan applicant, the |
|
|
residential mortgage loan originator who assisted the applicant in |
|
|
obtaining the residential mortgage loan is considered to have |
|
|
completed the performance of the loan originator's services for the |
|
|
applicant and owes no additional duties or obligations to the |
|
|
applicant with respect to the loan. |
|
|
(b) This section does not limit or preclude the liability of |
|
|
a residential mortgage loan originator for: |
|
|
(1) failing to comply with this chapter or a rule |
|
|
adopted under this chapter; |
|
|
(2) failing to comply with a provision of or duty |
|
|
arising under an agreement with a residential mortgage loan |
|
|
applicant under this chapter; or |
|
|
(3) violating any other state or federal law. |
|
|
Sec. 157.031. UNLICENSED ACTIVITY; OFFENSE. (a) A person |
|
|
commits an offense if the person is an employee of a mortgage |
|
|
banker, is not exempt under this chapter, and acts as a residential |
|
|
mortgage loan originator without first obtaining a license required |
|
|
under this chapter. An offense under this subsection is a Class B |
|
|
misdemeanor. A second or subsequent conviction for an offense |
|
|
under this subsection is a Class A misdemeanor. |
|
|
(b) If the commissioner has reasonable cause to believe that |
|
|
a person who is not licensed or exempt under this chapter has |
|
|
engaged, or is about to engage, in an act or practice for which a |
|
|
license is required under this chapter, the commissioner may issue, |
|
|
without notice and hearing, an order to cease and desist from |
|
|
continuing a particular action or an order to take affirmative |
|
|
action, or both, to enforce compliance with this chapter. The order |
|
|
must contain a reasonably detailed statement of the facts on which |
|
|
the order is made. The order may assess an administrative penalty |
|
|
in an amount not to exceed $1,000 per day for each violation and may |
|
|
require a person to pay to a residential mortgage loan applicant any |
|
|
compensation received by the person from the applicant in violation |
|
|
of this chapter. If a person against whom the order is made |
|
|
requests a hearing, the commissioner shall set and give notice of a |
|
|
hearing before the commissioner or an administrative law judge. |
|
|
The hearing shall be governed by Chapter 2001, Government Code. An |
|
|
order under this subsection becomes final unless the person to whom |
|
|
the order is issued requests a hearing not later than the 30th day |
|
|
after the date the order is issued. |
|
|
(c) If a hearing has not been requested under Subsection (b) |
|
|
not later than the 30th day after the date the order is made, the |
|
|
order is considered final and not appealable. The commissioner, |
|
|
after giving notice, may impose against a person who violates a |
|
|
cease and desist order, an administrative penalty in an amount not |
|
|
to exceed $1,000 for each day of a violation. In addition to any |
|
|
other remedy provided by law, the commissioner may institute in |
|
|
district court a suit for injunctive relief and to collect the |
|
|
administrative penalty. A bond is not required of the commissioner |
|
|
with respect to injunctive relief granted under this section. |
|
|
SECTION 9. The heading to Section 341.103, Finance Code, is |
|
|
amended to read as follows: |
|
|
Sec. 341.103. REGULATION OF SAVINGS INSTITUTIONS, [AND] |
|
|
LICENSED MORTGAGE BROKERS AND LOAN OFFICERS, AND REGISTERED |
|
|
MORTGAGE BANKERS AND LICENSED LOAN OFFICERS. |
|
|
SECTION 10. Section 341.103(a), Finance Code, is amended to |
|
|
read as follows: |
|
|
(a) The savings and mortgage lending commissioner shall |
|
|
enforce this subtitle relating to the regulation of: |
|
|
(1) state savings associations operating under this |
|
|
subtitle; |
|
|
(2) state savings banks operating under this subtitle; |
|
|
[and] |
|
|
(3) persons licensed under Chapter 156; and |
|
|
(4) persons registered or licensed under Chapter 157. |
|
|
SECTION 11. An individual is not required to comply with |
|
|
Section 157.012, Finance Code, as added by this Act, until the later |
|
|
of: |
|
|
(1) July 31, 2010; or |
|
|
(2) a subsequent date that is approved by the |
|
|
secretary of the United States Department of Housing and Urban |
|
|
Development under the authority granted under the federal Secure |
|
|
and Fair Enforcement for Mortgage Licensing Act of 2008 (Pub. L. No. |
|
|
110-289). |
|
|
SECTION 12. This Act takes effect only if House Bill 10 or |
|
|
another similar bill of the Regular Session of the 81st Legislature |
|
|
relating to the licensing of residential mortgage loan originators |
|
|
is enacted and becomes law. If House Bill 10 or another similar |
|
|
bill of the Regular Session of the 81st Legislature relating to the |
|
|
licensing of residential mortgage loan originators does not become |
|
|
law, this Act does not take effect. |
|
|
SECTION 13. Except as provided by Section 12 of this Act, |
|
|
this Act takes effect April 1, 2010. |
| |
| |
| |
______________________________ |
______________________________ |
| |
President of the Senate |
Speaker of the House |
| |
| |
|
|
I certify that H.B. No. 2779 was passed by the House on April |
|
|
28, 2009, by the following vote: Yeas 146, Nays 0, 1 present, not |
|
|
voting; and that the House concurred in Senate amendments to H.B. |
|
|
No. 2779 on May 29, 2009, by the following vote: Yeas 144, Nays 0, |
|
|
2 present, not voting. |
|
|
|
|
|
______________________________ |
|
|
Chief Clerk of the House |
| |
|
|
I certify that H.B. No. 2779 was passed by the Senate, with |
|
|
amendments, on May 26, 2009, by the following vote: Yeas 31, Nays |
|
|
0. |
|
|
|
|
|
______________________________ |
|
|
Secretary of the Senate |
|
|
APPROVED: __________________ |
|
|
Date |
|
|
|
|
|
__________________ |
|
|
Governor |