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INTRODUCED
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HOUSE
COMMITTEE SUBSTITUTE
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SECTION
1. The heading to Chapter 156, Finance Code, is amended.
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SECTION 1.
Same as introduced version.
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SECTION
2. Section 156.001, Finance Code, is amended.
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SECTION 2.
Same as introduced version.
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SECTION
3. Section 156.002, Finance Code, is amended.
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SECTION
3. Substantially same as introduced version.
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No equivalent provision.
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SECTION
4. Section 156.003, Finance Code, is amended to read as follows:
Sec.
156.003. SECONDARY MARKET TRANSACTIONS. This chapter does not prohibit a
residential mortgage loan originator sponsored by and conducting
business for a licensed or registered residential mortgage loan company
under this chapter from receiving compensation from a party other than
the mortgage applicant for the sale, transfer, assignment, or release of
rights on the closing of a mortgage transaction.
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No equivalent provision.
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SECTION
5. Section 156.004(a), Finance Code, is amended to read as follows:
(a) At the
time an applicant submits an application to a residential mortgage loan
originator sponsored by and conducting business for a licensed or
registered residential mortgage loan company under this chapter, the
residential mortgage loan originator shall provide to the applicant a
disclosure that specifies:
(1) the
nature of the relationship between the applicant and the residential
mortgage loan originator;
(2) the
duties the residential mortgage loan originator has to the applicant; and
(3) how
the residential mortgage loan originator will be compensated.
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No equivalent provision.
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SECTION
6. Section 156.005, Finance Code, is amended to read as follows:
Sec.
156.005. AFFILIATED BUSINESS ARRANGEMENTS. Unless prohibited by federal
or state law, this chapter may not be construed to prevent affiliated or
controlled business arrangements or loan origination services by or between
residential mortgage loan originators, sponsored by and conducting
business for a licensed or registered residential mortgage loan company
under this chapter, and other professionals if the residential mortgage
loan originator complies with all applicable federal and state laws
permitting those arrangements or services.
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SECTION
4. The heading to Section 156.101, Finance Code, is amended.
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SECTION 7.
Same as introduced version.
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SECTION
5. Section 156.101(a), Finance Code, as amended by Chapters 1104 (H.B. 10)
and 1317 (H.B. 2774), Acts of the 81st Legislature, Regular Session, 2009,
is reenacted and amended.
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SECTION 8.
Same as introduced version.
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SECTION
6. Section 156.102(a), Finance Code, is amended.
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SECTION 9.
Same as introduced version.
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SECTION
7. Section 156.104(h), Finance Code, is amended to read as follows:
(h) In
addition to other powers and duties delegated to the advisory committee by
the commissioner, the advisory committee shall advise the commissioner with
respect to:
(1) the
proposal and adoption of rules relating to [:
[(A)]
the licensing of [residential
mortgage loan originators or] residential
mortgage loan companies[;
[(B)
the education and experience requirements for licensing residential
mortgage loan originators; and
[(C)
the conduct and ethics of residential mortgage loan originators];
(2) the
form of or format for any applications or other documents under this
chapter; and
(3) the
interpretation, implementation, and enforcement of this chapter.
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SECTION
10. Sections 156.104(f) and (h), Finance Code, are amended to read as
follows:
(f) The commissioner may remove a member of the
advisory committee if:
(1) the member does not maintain [have
at the time of appointment] the qualifications required by Subsection
(b); or
(2) the commissioner determines that the member
cannot discharge the member's duties for a substantial part of the term for
which the member is appointed.
(h) In
addition to other powers and duties delegated to the advisory committee by
the commissioner, the advisory committee shall advise the commissioner with
respect to:
(1) the
proposal and adoption of rules relating to the
mortgage industry[:
[(A) the licensing of residential mortgage loan
originators or residential mortgage loan
companies;
[(B)
the education and experience requirements for licensing residential
mortgage loan originators; and
[(C)
the conduct and ethics of residential mortgage loan originators];
(2) the
form of or format for any applications or other documents under this
chapter or Chapter 157; and
(3) the
interpretation, implementation, and enforcement of this chapter and Chapter 157.
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No equivalent provision.
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SECTION
11. Section 156.105, Finance Code, is amended to read as follows:
Sec.
156.105. STANDARD FORMS. (a) The finance commission[,] by rule[,]
shall adopt one or more standard forms for use by a residential mortgage
loan originator sponsored by and conducting business for a licensed or
registered residential mortgage loan company under this chapter in
representing that an applicant for a residential mortgage loan is
preapproved or has prequalified for the loan.
(b) The
finance commission shall adopt rules requiring a residential mortgage loan
originator licensed under Chapter 157 [this chapter] to use
the forms adopted by the finance commission under Subsection (a).
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SECTION
8. The heading to Subchapter C, Chapter 156, Finance Code, is amended.
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SECTION
12. Same as introduced version.
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SECTION
9. Section 156.201(c), Finance Code, is amended.
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SECTION
13. Substantially same as introduced version.
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SECTION
10. Sections 156.202(a) and (a-1), Finance Code, are amended to read as follows:
(a) In
this section, "depository institution[,]" has ["dwelling," "federal banking
agency," and "immediate family member" have]
the meaning [meanings] assigned by Section 180.002.
(a-1)
The following [individuals or] entities[, and employees of those
entities when acting for the benefit of those entities,] are exempt
from this chapter:
(1) [a
registered mortgage loan originator when acting for:
[(A)
a depository institution;
[(B)
a subsidiary of a depository institution that is:
[(i)
owned and controlled by the depository institution; and
[(ii)
regulated by a federal banking agency; or
[(C)
an institution regulated by the Farm Credit Administration;
[(2)
an individual who offers or negotiates the terms of a residential mortgage
loan with or on behalf of an immediate family member of the individual;
[(3)
a licensed attorney who negotiates the terms of a residential mortgage loan
on behalf of a client as an ancillary matter to the attorney's
representation of the client, unless the attorney:
[(A)
takes a residential mortgage loan application; and
[(B)
offers or negotiates the terms of a residential mortgage loan;
[(4)
an individual who offers or negotiates terms of a residential mortgage loan
secured by a dwelling that serves as the individual's residence;
[(5)]
a nonprofit organization providing self-help housing that originates zero
interest residential mortgage loans for borrowers who have provided part of
the labor to construct the dwelling securing the loan;
(2)
[(6)] a mortgage banker registered under Chapter 157;
(3)
[(7)] any owner of residential real estate who in any
12-consecutive-month period makes no more than five residential mortgage
loans to purchasers of the property for all or part of the purchase price
of the residential real estate against which the mortgage is secured; and
(4)
[(8)] an entity that is:
(A) a
depository institution;
(B) a
subsidiary of a depository institution that is:
(i)
owned and controlled by the depository institution; and
(ii)
regulated by a federal banking agency; or
(C) an
institution regulated by the Farm Credit Administration[; and
[(9)
an individual who is exempt as provided by Section 180.003(b)].
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SECTION
14. Sections 156.202(a) and (a-1), Finance Code, are amended to read as
follows:
(a) In
this section, "depository institution," "dwelling," and "federal banking agency[,]"
[and "immediate family member"] have the meanings assigned
by Section 180.002.
(a-1) The
following [individuals or] entities[, and employees of those
entities when acting for the benefit of those entities,] are exempt
from this chapter:
(1) [a
registered mortgage loan originator when acting for:
[(A) a
depository institution;
[(B) a
subsidiary of a depository institution that is:
[(i)
owned and controlled by the depository institution; and
[(ii)
regulated by a federal banking agency; or
[(C)
an institution regulated by the Farm Credit Administration;
[(2)
an individual who offers or negotiates the terms of a residential mortgage
loan with or on behalf of an immediate family member of the individual;
[(3) a
licensed attorney who negotiates the terms of a residential mortgage loan
on behalf of a client as an ancillary matter to the attorney's
representation of the client, unless the attorney:
[(A)
takes a residential mortgage loan application; and
[(B)
offers or negotiates the terms of a residential mortgage loan;
[(4)
an individual who offers or negotiates terms of a residential mortgage loan
secured by a dwelling that serves as the individual's residence;
[(5)]
a nonprofit organization providing self-help housing that originates zero
interest residential mortgage loans for borrowers who have provided part of
the labor to construct the dwelling securing the loan;
(2)
[(6)] a mortgage banker registered under Chapter 157;
(3)
[(7)] any owner of residential real estate who in any
12-consecutive-month period makes no more than five residential mortgage
loans to purchasers of the property for all or part of the purchase price
of the residential real estate against which the mortgage is secured; and
(4)
[(8)] an entity that is:
(A) a
depository institution;
(B) a
subsidiary of a depository institution that is:
(i) owned
and controlled by the depository institution; and
(ii)
regulated by a federal banking agency; or
(C) an
institution regulated by the Farm Credit Administration[; and
[(9)
an individual who is exempt as provided by Section 180.003(b)].
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No equivalent provision.
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SECTION
15. The heading to Section 156.203, Finance Code, is amended to read as follows:
Sec.
156.203. APPLICATION [FOR A LICENSE]; FEES.
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SECTION
11. Section 156.203(a-1), Finance Code, is amended.
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SECTION
16. Substantially same as introduced version.
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SECTION
12. The heading to Section 156.2041, Finance Code, is amended.
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SECTION
17. Same as introduced version.
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SECTION
13. Section 156.2041(a), Finance Code, is amended.
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SECTION
18. Same as introduced version.
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SECTION
14. The heading to Section 156.2042, Finance Code, is amended.
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SECTION
19. Same as introduced version.
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SECTION
15. Section 156.2042(a), Finance Code, is amended.
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SECTION
20. Same as introduced version.
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SECTION
16. The heading to Section 156.2043, Finance Code, is amended.
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SECTION
21. Same as introduced version.
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SECTION
17. Section 156.2043(a), Finance Code, is amended.
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SECTION
22. Same as introduced version.
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SECTION
18. The heading to Section 156.2044, Finance Code, is amended.
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SECTION
23. Same as introduced version.
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SECTION
19. Sections 156.2044(a) and (b), Finance Code, are amended.
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SECTION
24. Same as introduced version.
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SECTION
20. The heading to Section 156.2045, Finance Code, is amended to read as
follows:
Sec.
156.2045. QUALIFICATIONS AND REQUIREMENTS FOR REGISTRATION AND LICENSE:
FINANCIAL SERVICES COMPANY [AND EXCLUSIVE AGENTS].
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No equivalent provision.
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SECTION
21. Section 156.2046, Finance Code, is amended.
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SECTION
25. Same as introduced version.
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SECTION
22. Section 156.206(b), Finance Code, is amended to read as follows:
(b) The
commissioner shall conduct criminal background and credit history checks on
a person required to be licensed under this chapter [in accordance
with Section 180.054, and, in connection with each application for a
residential mortgage loan originator license or other individual license, the
commissioner may conduct a criminal background check through the Department
of Public Safety].
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SECTION
26. Sections 156.206(b) and (c), Finance Code, are amended to read as
follows:
(b) The
commissioner shall conduct criminal background and credit history checks on
a person required to be licensed under this chapter [in accordance
with Section 180.054, and, in connection with each application for a
residential mortgage loan originator license or other individual license,
the commissioner may conduct a criminal background check through the
Department of Public Safety].
(c) The commissioner shall keep confidential any
background information obtained under this section and may not release or
disclose the information unless:
(1) the information is a public record at the time
the commissioner obtains the information; or
(2) the commissioner releases the information:
(A) under order from a court; or
(B) [with the permission of the applicant;
[(C) to a person through whom the applicant is
conducting or will conduct business; or
[(D)] to a governmental agency.
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SECTION
23. The heading to Section 156.207, Finance Code, is amended.
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SECTION
27. Same as introduced version.
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SECTION
24. Section 156.208(a-1), Finance Code, is amended to read as follows:
(a-1) A
residential mortgage loan company license issued under this chapter is
valid through December 31 of the year of issuance and may be renewed on or
before its expiration date if the residential mortgage loan company:
(1) pays
to the commissioner a renewal fee in an amount determined by the
commissioner not to exceed $375; [and]
(2) has
not shown a pattern or practice of abusive mortgage activity and has no
civil judgments or liens that, in the commissioner's opinion, directly
impact the ability of the residential mortgage loan company to conduct
business while safeguarding and protecting the public interest; and
(3)
continues to meet the minimum requirements for license issuance.
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SECTION
28. Sections 156.208(a-1) and (c), Finance Code, are amended to read as
follows:
(a-1) A
residential mortgage loan company license issued under this chapter is
valid through December 31 of the year of issuance and may be renewed on or
before its expiration date if the residential mortgage loan company:
(1) pays
to the commissioner a renewal fee in an amount determined by the
commissioner not to exceed $375; [and]
(2) has
not shown a pattern or practice of abusive mortgage activity and has no
civil judgments or liens that, in the commissioner's opinion, directly impact
the ability of the residential mortgage loan company to conduct business
while safeguarding and protecting the public interest; and
(3)
continues to meet the minimum requirements for license issuance.
(c) An application for renewal shall be in the
[The commissioner may require residential mortgage loan originators to
submit requests for renewal on a] form prescribed by the commissioner.
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SECTION
25. Section 156.209(g), Finance Code, is amended.
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SECTION
29. Same as introduced version.
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SECTION 26.
Sections 156.211(b) and (b-1), Finance Code, are amended.
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SECTION
30. Same as introduced version.
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SECTION
27. Section 156.213(a), Finance Code, is amended.
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SECTION
31. Same as introduced version.
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SECTION
28. Section 156.214(b), Finance Code, is amended to read as follows:
(b) To
be eligible to register as a registered financial services company, a
person must:
(1) be a
depository institution exempt from this chapter under Section 156.202(a-1)(4)(A)
[156.202(a-1)(8)(A)] and chartered and regulated by the Office of Thrift Supervision or the Office
of the Comptroller of the Currency, or be a subsidiary of the institution;
(2) provide the commissioner with satisfactory
evidence of an undertaking of accountability in a form acceptable to the
commissioner, supported by a surety bond equal to $1 million to cover the
person's responsibility for residential mortgage loan company activities of
each exclusive agent;
(3)
provide a business plan satisfactory to the commissioner that sets forth
the person's plan to provide education to its exclusive
agents,
handle
consumer complaints relating to its exclusive
agents, and supervise the residential mortgage loan origination
activities of its exclusive agents;
(4) pay an annual registration fee in an amount determined as follows:
(A) if the registered financial services company
has 2,000 or fewer exclusive agents acting in this state, an amount equal
to the lesser of:
(i) one-half of the license fee for a residential
mortgage loan originator under Section 157.013(b)(1) [156.203(c)(1)],
multiplied by the number of exclusive agents under contract to act for the
person in this state; or
(ii) $200,000;
(B) if the registered financial services company
has at least 2,001 but not more than 2,500 exclusive agents acting in this
state, $225,000;
(C) if the registered financial services company
has at least 2,501 but not more than 3,000 exclusive agents acting in this
state, $250,000;
(D) if the registered financial services company
has at least 3,001 but not more than 5,000 exclusive agents acting in this
state, $300,000; or
(E) if the registered financial services company
has at least 5,001 exclusive agents acting in this state, $350,000; and
(5)
designate an officer of the person to be responsible for the activities of the exclusive agents.
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SECTION
32. Section 156.214, Finance Code, is redesignated as Section 156.2012,
Finance Code, and amended to read as follows:
Sec. 156.2012 [156.214]. REGISTERED
FINANCIAL SERVICES COMPANY. (a) A [registered] financial services
company may perform the services of a [another] residential
mortgage loan company [as] if the company is registered [were
licensed as a residential mortgage loan company] under this chapter[,
through individuals who are the exclusive agents of the registered
financial services company].
(b) To be
eligible to register as a registered financial services company, a person
must:
(1) be a
depository institution exempt from this chapter under Section 156.202(a-1)(4)(A)
[156.202(a-1)(8)(A)] and chartered and regulated by [the Office of Thrift Supervision or]
the Office of the Comptroller of the Currency, or be a subsidiary of the
institution;
(2) [provide the commissioner with satisfactory
evidence of an undertaking of accountability in a form acceptable to the
commissioner, supported by a surety bond equal to $1 million to cover the
person's responsibility for residential mortgage loan company activities of
each exclusive agent;
[(3)]
provide a business plan satisfactory to the commissioner that sets forth
the person's plan to:
(A)
provide education to its sponsored
residential mortgage loan originators;
(B)
[exclusive agents,] handle
consumer complaints relating to its sponsored
residential mortgage loan originators; and
(C)
[exclusive agents, and]
supervise the residential mortgage loan origination activities of its sponsored residential mortgage loan originators [exclusive agents];
(3)
[(4)] pay a [an annual] registration fee in an
amount not to exceed $500 [determined as follows:
[(A) if the registered financial services
company has 2,000 or fewer exclusive agents acting in this state, an amount
equal to the lesser of:
[(i) one-half of the license fee for a
residential mortgage loan originator under Section 156.203(c)(1),
multiplied by the number of exclusive agents under contract to act for the
person in this state; or
[(ii) $200,000;
[(B) if the registered financial services
company has at least 2,001 but not more than 2,500 exclusive agents acting
in this state, $225,000;
[(C) if the registered financial services
company has at least 2,501 but not more than 3,000 exclusive agents acting
in this state, $250,000;
[(D) if the registered financial services
company has at least 3,001 but not more than 5,000 exclusive agents acting
in this state, $300,000; or
[(E) if the registered financial services
company has at least 5,001 exclusive agents acting in this state, $350,000];
[and]
(4)
[(5)] designate an officer of the person to be responsible for the
activities of its sponsored residential
mortgage loan originators;
(5) submit a completed application through the
Nationwide Mortgage Licensing System and Registry together with the
applicable fee required by Subdivision (3) or Subsection (c);
(6) obtain preapproval from the commissioner that
the person meets the eligibility requirements for registration as a
financial services company; and
(7) not be in violation of this chapter, a rule
adopted under this chapter, or any order previously issued by the commissioner
to the applicant [the exclusive
agents].
(c) If the commissioner determines that a person
has met the requirements of Subsection (b) [and Section 156.2045(a)],
the commissioner shall issue a registration to the person. The
registration is valid for one year, expires on December 31 of each year,
and must be renewed annually by meeting the requirements under
Subsection (b) and paying a renewal fee in an amount not to exceed $500.
A person must renew an expired registration in the manner determined by the
commissioner.
(d) A registered financial services company is
subject to Subchapters D and E as if the company were licensed as a
residential mortgage loan company.
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SECTION
29. Section 156.301(h), Finance Code, is amended to read as follows:
No equivalent provision.
No equivalent provision.
No equivalent provision.
(h) The
commissioner may require reimbursement of expenses [in an amount
not to exceed $325] for each examiner [a day] for on-site examination
or investigation of a licensed residential mortgage loan company if
records are located out of state or if the review is considered necessary
beyond the routine examination process.
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SECTION
33. Sections 156.301(a), (b), (c), and (h), Finance Code, are amended to
read as follows:
(a) The
commissioner may conduct inspections of a person licensed under this chapter
or a residential mortgage loan originator who is licensed under Chapter
157 and sponsored by and conducting business for a licensed or registered
residential mortgage loan company under this chapter as the
commissioner determines necessary to determine whether the person or the
residential mortgage loan originator is complying with this chapter and
applicable rules. The inspections may include inspection of the books,
records, documents, operations, and facilities of the person or the
residential mortgage loan originator and access to any documents
required under rules adopted under this chapter. The commissioner may
share evidence of criminal activity gathered during an inspection or
investigation with any state or federal law enforcement agency.
(b) On
the signed written complaint of a person, the commissioner shall
investigate the actions and records of a person licensed under this chapter
or a residential mortgage loan originator who is licensed under Chapter
157 and sponsored by and conducting business for a licensed or registered
residential mortgage loan company under this chapter if the complaint,
or the complaint and documentary or other evidence presented in connection
with the complaint, provides reasonable cause. The commissioner, before
commencing an investigation, shall notify the [a] residential
mortgage loan company or the residential mortgage loan originator in
writing of the complaint and that the commissioner intends to investigate
the matter.
(c) For
reasonable cause, the commissioner at any time may investigate a person
licensed under this chapter or a residential mortgage loan originator
who is licensed under Chapter 157 and sponsored by and conducting business
for a licensed or registered residential mortgage loan company under this
chapter to determine whether the person or the residential mortgage
loan originator is complying with this chapter and applicable rules.
(h) The
commissioner may require reimbursement of expenses [in an amount
not to exceed $325] for each examiner [a day] for on-site
examination or investigation of a license
holder [residential mortgage
loan company] if records are located out of state or if the
review is considered necessary beyond the routine examination process. The finance commission by rule shall set the
maximum amount for the reimbursement of expenses authorized under this
subsection.
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SECTION
30. Sections 156.303(a), (a-1), (g), and (i), Finance Code, are amended to
read as follows:
(a) The
commissioner may order disciplinary action against a licensed or registered
residential mortgage loan company [or a licensed residential mortgage
loan originator] when the commissioner, after notice and opportunity
for hearing, has determined that the company [person]:
(1)
obtained a license or registration, including a renewal of a license or
registration, under this chapter through a false or fraudulent
representation or made a material misrepresentation in an application for a
license or registration or for the renewal of a license or registration
under this chapter;
(2)
published or caused to be published an advertisement related to the
business of a residential mortgage loan company [or residential mortgage
loan originator] that:
(A) is
misleading;
(B) is
likely to deceive the public;
(C) in
any manner tends to create a misleading impression;
(D)
fails to identify as a residential mortgage loan company [or residential
mortgage loan originator] the person causing the advertisement to be
published; or
(E)
violates federal or state law;
(3)
while performing an act for which a license or registration under this
chapter is required, engaged in conduct that constitutes improper, fraudulent,
or dishonest dealings;
(4)
entered a plea of guilty or nolo contendere to, or is 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 of a residential
mortgage loan for a purpose for which the fee was paid;
(6)
charged or received, directly or indirectly, a fee for assisting a mortgage
applicant in obtaining a residential mortgage loan before all of the
services that the person agreed to perform for the mortgage applicant are
completed, and the proceeds of the residential mortgage loan have been
disbursed to or on behalf of the mortgage applicant[, except as provided
by Section 156.304];
(7)
failed within a reasonable time to honor a check issued to the commissioner
after the commissioner has mailed a request for payment of the check and any applicable fees by certified mail to the person's last known
business address as reflected by the commissioner's records;
(8) paid
compensation to a person who is not licensed, registered, or exempt under
this chapter or Chapter 157 for acts for which a license or
registration under this chapter or Chapter 157 is required;
(9)
induced or attempted to induce a party to a contract to breach the contract
so the person may make a residential mortgage loan;
(10)
published or circulated an unjustified or unwarranted threat of legal
proceedings in matters related to the person's actions or services as a
residential mortgage loan company [or residential mortgage loan
originator, as applicable];
(11)
established an association, by employment or otherwise, with a person not
licensed, registered, or exempt under this chapter or Chapter 157
who was expected or required to act as a residential mortgage loan company
or residential mortgage loan originator;
(12)
aided, abetted, or conspired with a person to circumvent the requirements
of this chapter or Subchapter C, Chapter 157;
(13)
acted in the dual capacity of a residential mortgage loan company [or
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;
(14)
discriminated against a prospective borrower on the basis of race, color,
religion, sex, national origin, ancestry, familial status, or a disability;
(15)
failed or refused on demand to:
(A)
produce a document, book, or record concerning a residential mortgage loan
transaction conducted by a [the] 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 person's
business kept by an officer, agent, or employee of the person or any
business entity through which the person conducts residential mortgage loan
origination activities, including a subsidiary or holding company
affiliate; or
(C) provide
information requested by the commissioner as a result of a formal or
informal complaint made to the commissioner;
(16)
failed without just cause to surrender, on demand, a copy of a document or
other instrument coming into the person's possession that was provided to
the person by another person making the demand or that the person making
the demand is under law entitled to receive;
(17)
disregarded or violated this chapter, a rule adopted by the finance
commission under this chapter, or an order issued by the commissioner under
this chapter; or
(18)
provided false information to the commissioner during the course of an
investigation or inspection.
(a-1)
The commissioner may also order disciplinary action after notice and
opportunity for hearing against a licensed or registered residential
mortgage loan company [or a licensed residential mortgage loan
originator] if the commissioner becomes aware during the term of the
license 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 issued.
(g) If a
person 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 person, may without a prior hearing
suspend the person's residential mortgage loan company license or registration
[or residential mortgage loan originator license]. The suspension
shall continue until the person has complied with the order or paid the
administrative penalty. [During the
period of suspension, the person may not originate a residential mortgage
loan and all compensation received by the person during the period of
suspension is subject to forfeiture as provided by Section 156.406(b).]
(i) An
order revoking the license or registration of a residential mortgage loan
company [or the license of a residential mortgage loan originator]
may provide that the person is prohibited, without obtaining prior written
consent of the commissioner, from:
(1)
engaging in the business of originating or making residential mortgage
loans; or
(2) [being
an employee, officer, director, manager, shareholder, member, agent,
contractor, or processor of a residential mortgage loan company or
residential mortgage loan originator; or
[(3)]
otherwise affiliating with a person for the purpose of engaging in the
business of originating or making residential mortgage loans.
|
SECTION
34. Section 156.303, Finance Code, is amended by amending Subsections (a),
(a-1), (g), and (i) and adding Subsection (k) to read as follows:
(a) The
commissioner may order disciplinary action against a licensed or registered
residential mortgage loan company [or a licensed residential mortgage
loan originator] when the commissioner, after notice and opportunity
for hearing, has determined that the company [person]:
(1)
obtained a license or registration, including a renewal of a license or
registration, under this chapter through a false or fraudulent
representation or made a material misrepresentation in an application for a
license or registration or for the renewal of a license or registration
under this chapter;
(2)
published or caused to be published an advertisement related to the
business of a residential mortgage loan company [or residential mortgage
loan originator] that:
(A) is
misleading;
(B) is
likely to deceive the public;
(C) in
any manner tends to create a misleading impression;
(D) fails
to identify as a residential mortgage loan company [or residential
mortgage loan originator] the person causing the advertisement to be
published; or
(E)
violates federal or state law;
(3) while
performing an act for which a license or registration under this chapter is
required, engaged in conduct that constitutes improper, fraudulent, or
dishonest dealings;
(4)
entered a plea of guilty or nolo contendere to, or is 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 of a residential
mortgage loan for a purpose for which the fee was paid;
(6)
charged or received, directly or indirectly, a fee for assisting a mortgage
applicant in obtaining a residential mortgage loan before all of the
services that the person agreed to perform for the mortgage applicant are
completed, and the proceeds of the residential mortgage loan have been
disbursed to or on behalf of the mortgage applicant[, except as provided
by Section 156.304];
(7)
failed within a reasonable time to honor a
credit card charge back or a check issued to the commissioner
after the commissioner has mailed a request for payment, including payment of [of the check and] any applicable
fees, [by certified mail]
to the person's last known business address as reflected by the
commissioner's records;
(8) paid
compensation to a person who is not licensed, registered, or exempt under
this chapter or Chapter 157 for acts for which a license or
registration under this chapter or Chapter 157 is required;
(9)
induced or attempted to induce a party to a contract to breach the contract
so the person may make a residential mortgage loan;
(10)
published or circulated an unjustified or unwarranted threat of legal
proceedings in matters related to the person's actions or services as a
residential mortgage loan company [or residential mortgage loan originator,
as applicable];
(11)
established an association, by employment or otherwise, with a person not
licensed, registered, or exempt under this chapter or Chapter 157
who was expected or required to act as a residential mortgage loan company
or residential mortgage loan originator;
(12)
aided, abetted, or conspired with a person to circumvent the requirements
of this chapter or Subchapter D, Chapter 157;
(13)
acted in the dual capacity of a residential mortgage loan company [or
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;
(14)
discriminated against a prospective borrower on the basis of race, color,
religion, sex, national origin, ancestry, familial status, or a disability;
(15)
failed or refused on demand to:
(A)
produce a document, book, or record concerning a residential mortgage loan
transaction conducted by a [the] 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 person's
business kept by an officer, agent, or employee of the person or any
business entity through which the person conducts residential mortgage loan
origination activities, including a subsidiary or holding company
affiliate; or
(C)
provide information requested by the commissioner as a result of a formal
or informal complaint made to the commissioner;
(16)
failed without just cause to surrender, on demand, a copy of a document or
other instrument coming into the person's possession that was provided to
the person by another person making the demand or that the person making
the demand is under law entitled to receive;
(17)
disregarded or violated this chapter, a rule adopted by the finance
commission under this chapter, or an order issued by the commissioner under
this chapter; or
(18)
provided false information to the commissioner during the course of an
investigation or inspection.
(a-1) The
commissioner may also order disciplinary action after notice and
opportunity for hearing against a licensed or registered residential
mortgage loan company [or a licensed residential mortgage loan
originator] if the commissioner becomes aware during the term of the
license 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 issued.
(g) If a
person 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 person, may without a prior hearing
suspend the person's residential mortgage loan company license or
registration [or residential mortgage loan originator license]. The
suspension shall continue until the person has complied with the order or
paid the administrative penalty. During the
period of suspension, the person may not originate a residential mortgage
loan and all compensation received by the person during the period of
suspension is subject to forfeiture as provided by Section 156.406(b).
(i) An
order revoking the license or registration of a residential mortgage loan
company [or the license of a residential mortgage loan originator]
may provide that the person is prohibited, without obtaining prior written
consent of the commissioner, from:
(1)
engaging in the business of originating or making residential mortgage
loans; or
(2) [being
an employee, officer, director, manager, shareholder, member, agent,
contractor, or processor of a residential mortgage loan company or
residential mortgage loan originator; or
[(3)]
otherwise affiliating with a person for the purpose of engaging in the
business of originating or making residential mortgage loans.
(k) The commissioner may, at the commissioner's
discretion, rescind or vacate any previously issued order.
|
|
No equivalent provision.
|
SECTION
35. Section 156.304(a), Finance Code, is amended to read as follows:
(a)
Before the completion of all services to be performed, a residential
mortgage loan originator sponsored by and conducting business for a
licensed or registered residential mortgage loan company under this chapter
may charge and receive, unless prohibited by law, the following fees for
services in assisting a mortgage applicant to obtain a residential mortgage
loan:
(1) a fee
to obtain a credit report;
(2) a fee
for the appraisal of the real estate;
(3) a fee
for processing a residential mortgage loan application;
(4) a fee
for taking a residential mortgage loan application;
(5) a fee
for automated underwriting;
(6) a fee
for a courier service;
(7) a fee
to issue a loan commitment; or
(8)
subject to Subsection (b), a fee for locking in an interest rate.
|
|
SECTION
31. Section 156.305, Finance Code, is amended.
|
SECTION
36. Same as introduced version.
|
|
SECTION
32. Section 156.401(d), Finance Code, is amended.
|
SECTION
37. Same as introduced version.
|
|
No equivalent provision.
|
SECTION
38. Section 156.406(a), Finance Code, is amended to read as follows:
(a) A
person, unless otherwise exempt, commits an offense if the person conducts
regulated activities under this chapter without first obtaining a license
or registration as required by Section 156.201, 156.2012, or 157.012, as
applicable. [A person who is not exempt under this chapter and who
acts as a residential mortgage loan originator without first obtaining a
license required under this chapter commits an offense.] An offense
under this subsection is a Class B misdemeanor. A second or subsequent
conviction for an offense under this subsection shall be punished as a
Class A misdemeanor.
|
|
SECTION
33. The heading to Subchapter F, Chapter 156, Finance Code, is amended.
|
SECTION
39. Same as introduced version.
|
|
SECTION
34. Section 156.501(b), Finance Code, is amended to read as follows:
(b)
Subject to this subsection, the recovery fund shall be used to reimburse
residential mortgage loan applicants for actual damages incurred because of
acts committed by a residential mortgage loan originator who was licensed [under
this chapter or] under Chapter 157 when the act was committed. The use
of the fund is limited to reimbursement for out-of-pocket losses caused by
an act by[:
[(1)
a residential mortgage loan originator licensed under this chapter that
constitutes a violation of Section 156.303(a)(2), (3), (5), (6), (8), (9),
(10), (11), (12), (13), or (16) or 156.304; or
[(2)]
a residential mortgage loan originator licensed under Chapter 157 that
constitutes a violation of Section 157.024(a)(2), (3), (5), (7), (8), (9),
(10), (13), [or] (16), (17), or (18) or 157.02014(b).
|
SECTION
40. Section 156.501(b), Finance Code, is amended to read as follows:
(b)
Subject to this subsection, the recovery fund shall be used to reimburse
residential mortgage loan applicants for actual damages incurred because of
acts committed by a residential mortgage loan originator who was licensed [under
this chapter or] under Chapter 157 when the act was committed. The use
of the fund is limited to reimbursement for out-of-pocket losses caused by
an act by[:
[(1) a
residential mortgage loan originator licensed under this chapter that
constitutes a violation of Section 156.303(a)(2), (3), (5), (6), (8), (9),
(10), (11), (12), (13), or (16) or 156.304; or
[(2)]
a residential mortgage loan originator licensed under Chapter 157 that
constitutes a violation of Section 157.024(a)(2), (3), (5), (7), (8), (9),
(10), (13), [or] (16), (17), or (18) or 156.304(b).
|
|
No equivalent provision.
|
SECTION
41. Section 156.502(a), Finance Code, is amended to read as follows:
(a) On an
application for an original license or for renewal of a license issued
under Chapter 157 [this chapter], the applicant, in addition
to paying the original application fee or renewal fee, shall pay a fee in
an amount determined by the commissioner, not to exceed $20. The fee shall
be deposited in the recovery fund.
|
|
SECTION
35. Section 156.503(a), Finance Code, is amended.
|
SECTION
42. Same as introduced version.
|
|
SECTION
36. Section 156.504(b), Finance Code, is amended to read as follows:
(b) The
residential mortgage loan applicant is required to show:
(1) that
the applicant's claim is based on facts allowing recovery under Section
156.501; and
(2) that
the applicant:
(A) is
not a spouse of the licensed residential mortgage loan originator;
(B) is
not a child, parent, grandchild, grandparent, or sibling, including
relationships by adoption, of the licensed residential mortgage loan
originator;
(C) is
not a person sharing living quarters with the licensed residential mortgage
loan originator or a current or former employer, employee, or associate of
the licensed residential mortgage loan originator;
(D) is
not a person who has aided, abetted, or participated other than as a victim
with the licensed residential mortgage loan originator in any activity that
is illegal under [Section 156.303(a)(2), (3), (5), (6), (8), (9), (10),
(11), (12), (13), or (16), Section 156.304, or] Section 157.024(a)(2),
(3), (5), (7), (8), (9), (10), (13), [or] (16), (17), or (18) or 157.02014(b), or is not the personal representative of a licensed
residential mortgage loan originator; and
(E) is
not licensed as a residential mortgage loan originator under Chapter 157
[this chapter] who is seeking to recover any compensation in the
transaction or transactions for which the application for payment is made.
|
SECTION
43. Section 156.504(b), Finance Code, is amended to read as follows:
(b) The
residential mortgage loan applicant is required to show:
(1) that
the applicant's claim is based on facts allowing recovery under Section
156.501; and
(2) that
the applicant:
(A) is
not a spouse of the licensed residential mortgage loan originator;
(B) is
not a child, parent, grandchild, grandparent, or sibling, including relationships
by adoption, of the licensed residential mortgage loan originator;
(C) is
not a person sharing living quarters with the licensed residential mortgage
loan originator or a current or former employer, employee, or associate of
the licensed residential mortgage loan originator;
(D) is
not a person who has aided, abetted, or participated other than as a victim
with the licensed residential mortgage loan originator in any activity that
is illegal under [Section 156.303(a)(2), (3), (5), (6), (8), (9), (10),
(11), (12), (13), or (16), Section 156.304, or] Section 157.024(a)(2),
(3), (5), (7), (8), (9), (10), (13), [or] (16), (17), or (18) or 156.304(b),
or is not the personal representative of a licensed residential mortgage
loan originator; and
(E) is
not licensed as a residential mortgage loan originator under Chapter 157
[this chapter] who is seeking to recover any compensation in the
transaction or transactions for which the application for payment is made.
|
|
SECTION
37. Section 156.505(b), Finance Code, is amended.
|
SECTION
44. Same as introduced version.
|
|
SECTION
38. Sections 156.506(a), (c), and (d), Finance Code, are amended to read
as follows:
(a) The
commissioner may revoke or suspend a license issued under this chapter on proof that the commissioner
has made a payment from the recovery fund of any amount toward satisfaction
of a claim against a residential mortgage loan originator under Chapter
157 [this chapter].
(c) A
person on whose behalf payment was made from the recovery fund is not
eligible to receive a new license or have a suspension lifted under this
chapter or Chapter 157 until the person has repaid in full, plus
interest at the current legal rate, the amount paid from the fund on the
person's behalf and any costs associated with investigating and processing
the claim against the fund or with collection of reimbursement for payments
from the fund.
(d) This
section does not limit the authority of the commissioner to take
disciplinary action against a residential mortgage loan originator for a
violation of Chapter 157 [this chapter] or the rules adopted
by the finance commission under that [this] chapter. The
repayment in full to the recovery fund of all obligations of a residential
mortgage loan originator does not nullify or modify the effect of any other
disciplinary proceeding brought under Chapter 157 [this chapter].
|
SECTION
45. Sections 156.506(a), (c), and (d), Finance Code, are amended to read
as follows:
(a) The
commissioner may revoke or suspend a license issued under Chapter 157
[this chapter] on proof that the commissioner has made a
payment from the recovery fund of any amount toward satisfaction of a claim
against a residential mortgage loan originator under Chapter 157 [this
chapter].
(c) A
person on whose behalf payment was made from the recovery fund is not
eligible to receive a new license or have a suspension lifted under this
chapter or Chapter 157 until the person has repaid in full, plus
interest at the current legal rate, the amount paid from the fund on the
person's behalf and any costs associated with investigating and processing
the claim against the fund or with collection of reimbursement for payments
from the fund.
(d) This
section does not limit the authority of the commissioner to take
disciplinary action against a residential mortgage loan originator for a
violation of Chapter 157 [this chapter] or the rules adopted
by the finance commission under that [this] chapter. The
repayment in full to the recovery fund of all obligations of a residential
mortgage loan originator does not nullify or modify the effect of any other
disciplinary proceeding brought under Chapter 157 [this chapter].
|
|
SECTION
39. The heading to Chapter 157, Finance Code, is amended to read as
follows:
CHAPTER
157. REGISTRATION OF MORTGAGE BANKERS AND LICENSING OF RESIDENTIAL
MORTGAGE LOAN ORIGINATORS
|
SECTION
46. The heading to Chapter 157, Finance Code, is amended to read as
follows:
CHAPTER
157. [REGISTRATION OF] MORTGAGE BANKERS AND RESIDENTIAL MORTGAGE
LOAN ORIGINATORS
|
|
SECTION
40. Sections 157.001 and 157.002, Finance Code, are designated as
Subchapter A, Chapter 157, Finance Code, and a heading is added to that
subchapter.
|
SECTION
47. Same as introduced version.
|
|
SECTION
41. Section 157.002, Finance Code, is amended.
|
SECTION
48. Same as introduced version.
|
|
SECTION
42. Sections 157.003, 157.004, 157.005, 157.006, 157.0061, 157.0062,
157.007, 157.008, 157.009, and 157.010, Finance Code, are designated as
Subchapter B, Chapter 157, Finance Code, and a heading is added to that
subchapter to read as follows:
SUBCHAPTER
B. REGISTRATION OF MORTGAGE BANKERS
|
SECTION
50. Same as introduced version.
|
|
No equivalent provision.
|
SECTION
49. Chapter 157, Finance Code, is amended by adding Subchapter B to read
as follows:
SUBCHAPTER
B. ADMINISTRATIVE PROVISIONS
Sec.
157.0024. MORTGAGE INDUSTRY ADVISORY COMMITTEE. The mortgage industry
advisory committee shall advise and assist the commissioner with respect to
this chapter as provided by Section 156.104.
|
|
SECTION
43. Section 157.003(b), Finance Code, is amended.
|
SECTION
51. Same as introduced version.
|
|
No equivalent provision.
|
SECTION
52. Section 157.004, Finance Code, is amended to read as follows:
Sec.
157.004. EXEMPTIONS. This chapter does not apply to:
(1) a federally
insured bank, savings bank, savings and loan association, Farm Credit
System Institution, or credit union;
(2) a
subsidiary of a federally insured bank, savings bank, savings and loan
association, Farm Credit System Institution, or credit union;
(3) a residential
mortgage loan company licensed [person licensed as a mortgage broker]
under Chapter 156;
(4) an
authorized lender licensed under Chapter 342; or
(5) the
state or a governmental agency, political subdivision, or other
instrumentality of the state, or an employee of the state or a governmental
agency, political subdivision, or instrumentality of the state who is
acting within the scope of the person's employment.
|
|
SECTION
44. Section 157.005, Finance Code, is amended.
|
SECTION
53. Same as introduced version.
|
|
No equivalent provision.
|
SECTION
54. Sections 157.007 and 157.008, Finance Code, are transferred to
Subchapter B, Chapter 157, Finance Code, as added by this Act, and
redesignated as Sections 157.0021 and 157.0022, Finance Code, to read as
follows:
Sec. 157.0021
[157.007]. DISCLOSURE STATEMENT. (a) A mortgage banker that is a
residential mortgage loan originator shall include a notice to a
residential mortgage loan applicant with an application for a residential
mortgage loan. The finance commission by rule shall adopt a standard
disclosure form to be used by the mortgage banker. The form must:
(1)
include the name, address, and toll-free telephone number for the
Department of Savings and Mortgage Lending;
(2)
contain information on how to file a complaint or recovery fund claim; and
(3)
prescribe a method for proof of delivery to the consumer.
(b) A
mortgage banker that indicates in its registration that it acts as a
residential mortgage loan servicer shall provide to the borrower of each
residential mortgage loan it services the following notice not later than
the 30th day after the date the mortgage banker commences servicing the
loan:
"COMPLAINTS
REGARDING THE SERVICING OF YOUR MORTGAGE SHOULD BE SENT TO THE DEPARTMENT OF
SAVINGS AND MORTGAGE LENDING, ______________________________ (street
address of the Department of Savings and Mortgage Lending). A TOLL-FREE
CONSUMER HOTLINE IS AVAILABLE AT _______________ (telephone number of the
Department of Savings and Mortgage Lending's toll-free consumer
hotline)."
Sec. 157.0022
[157.008]. COMPLAINTS. (a) If the Department of Savings and
Mortgage Lending receives a signed written complaint from a person
concerning a mortgage banker, the commissioner shall notify the representative
designated by the mortgage banker under Section 157.003(b) in writing of
the complaint and provide a copy of the complaint to the representative.
(b) The
commissioner may request documentary and other evidence considered by the
commissioner as necessary to effectively evaluate the complaint, including
correspondence, loan documents, and disclosures. A mortgage banker shall
promptly provide any evidence requested by the commissioner.
(c) The
commissioner may require the mortgage banker to resolve the complaint or to
provide the commissioner with a response to the complaint. The
commissioner may direct the mortgage banker in writing to take specific
action to resolve the complaint.
|
|
SECTION
45. Section 157.009, Finance Code, is amended by adding Subsection (d-1)
and amending Subsection (e) to read as follows:
(d-1)
The commissioner, after review of the circumstances, may revoke the
registration of a mortgage banker if the mortgage banker has had a license,
registration, or other certification revoked in
another state by a state or federal regulatory authority.
(e) If
the commissioner proposes to revoke a registration under Subsection (c),
[or] (d), or (d-1), the mortgage banker is entitled to a
hearing before the commissioner or a hearings officer, who shall propose a
decision to the commissioner. The commissioner or hearings officer shall
prescribe the time and place of the hearing. The hearing is governed by
Chapter 2001, Government Code.
|
SECTION
55. Section 157.009, Finance Code, is amended by adding Subsection (d-1)
and amending Subsection (e) to read as follows:
(d-1)
The commissioner, after review of the circumstances, may revoke the
registration of a mortgage banker if the mortgage banker has had a license,
registration, or other certification revoked by a state or federal
regulatory authority.
(e) If
the commissioner proposes to revoke a registration under Subsection (c),
[or] (d), or (d-1), the mortgage banker is entitled to a
hearing before the commissioner or a hearings officer, who shall propose a
decision to the commissioner. The commissioner or hearings officer shall
prescribe the time and place of the hearing. The hearing is governed by
Chapter 2001, Government Code.
|
|
SECTION
46. Section 157.011, Finance Code, is transferred to Subchapter A, Chapter
157, Finance Code, as added by this Act, and redesignated as Section
157.0021, Finance Code.
|
SECTION
56. Substantially same as introduced version.
|
|
SECTION
47. Sections 157.012, 157.013, 157.014, 157.015, 157.016, 157.017, 157.019,
157.020, and 157.0201, Finance Code, are designated as Subchapter C,
Chapter 157, Finance Code, and a heading is added to that subchapter.
|
SECTION
57. Same as introduced version.
|
|
SECTION
48. The heading to Section 157.012, Finance Code, is amended.
|
SECTION
58. Same as introduced version.
|
|
SECTION
49. Section 157.012, Finance Code, is amended by amending Subsections (a)
and (c) and adding Subsections (a-1), (a-2), (e), and (f) to read as
follows:
(a) Except as provided by Subsection (a-1), an
individual [An employee of a mortgage banker] may not act in the
capacity of a residential mortgage loan originator unless the individual
is exempt under Section 157.0121 or [employee]:
(1) is
licensed under this chapter, sponsored by an appropriate company [a registered mortgage banker],
and enrolled with the Nationwide Mortgage Licensing System and Registry as
required by Section 180.052; and
(2)
complies with other applicable requirements of Chapter 180 and rules
adopted by the finance commission under that chapter.
(a-1) Unless exempt under Section 180.003(b), an
exclusive agent of a registered financial services company may not act or
attempt to act as a residential mortgage loan originator unless the
exclusive agent at the time is licensed under this chapter and sponsored by
an appropriate company.
(a-2) A residential mortgage loan originator must
be sponsored by at least one mortgage banker or residential mortgage loan
company.
(c) To be
eligible to be licensed as a residential mortgage loan originator, the
individual [an employee of a mortgage banker], in addition to meeting
the requirements of Subsection (a), must:
(1)
satisfy the commissioner as to the individual's [employee's]
good moral character, including the individual's [employee's]
honesty, trustworthiness, and integrity;
(2) not
be in violation of this chapter, Chapter 180, or any rules adopted under
this chapter or Chapter 180;
(3)
provide the commissioner with satisfactory evidence that the individual
[employee] meets the qualifications provided by Chapter 180; and
(4) be a
citizen of the United States or a lawfully admitted alien.
(e) A licensed residential mortgage loan
originator who is no longer acting in that capacity for the originator's
sponsoring banker or company during the licensing period may continue to
originate loans under this chapter without reapplying for a new license if
the originator is sponsored by an appropriate company.
(f)
In this section, "appropriate company"
means a company:
(1)
that is a registered mortgage banker under
this chapter or a licensed or registered residential mortgage loan company under Chapter 156; and
(2)
for which the individual is acting as a residential mortgage loan
originator.
|
SECTION
59. Section 157.012, Finance Code, is amended by amending Subsections (a)
and (c) and adding Subsection (e) to read as follows:
(a) An
individual [An employee of a mortgage banker] may not act or attempt to act in the capacity of a
residential mortgage loan originator unless the individual is exempt
under Section 157.0121 or 180.003(b)
or [employee]:
(1) is
licensed under this chapter, sponsored by an appropriate entity [a registered mortgage banker],
and enrolled with the Nationwide Mortgage Licensing System and Registry as
required by Section 180.052; and
(2)
complies with other applicable requirements of Chapter 180 and rules
adopted by the finance commission under that chapter.
(c) To be
eligible to be licensed as a residential mortgage loan originator, the
individual [an employee of a mortgage banker], in addition to meeting
the requirements of Subsection (a), must:
(1)
satisfy the commissioner as to the individual's [employee's]
good moral character, including the individual's [employee's]
honesty, trustworthiness, and integrity;
(2) not
be in violation of this chapter, Chapter 180, or any rules adopted under
this chapter or Chapter 180;
(3)
provide the commissioner with satisfactory evidence that the individual
[employee] meets the qualifications provided by Chapter 180; and
(4) be a citizen
of the United States or a lawfully admitted alien.
(e) In
this section, "appropriate entity"
means an entity:
(1)
that is licensed or registered under this chapter or Chapter 156; and
(2)
for which the individual is acting as a residential mortgage loan
originator.
|
|
SECTION
50. Subchapter C, Chapter 157, Finance Code, as added by this Act, is
amended by adding Section 157.0121.
|
SECTION
60. Substantially same as introduced version.
|
|
SECTION
51. Section 157.013, Finance Code, is amended.
|
SECTION
61. Same as introduced version.
|
|
SECTION
52. Subchapter C, Chapter 157, Finance Code, as added by this Act, is
amended by adding Sections 157.0131, 157.0132, and 157.0133 to read as
follows:
Sec.
157.0131. FINANCIAL REQUIREMENTS. (a) In this section, "financial
services company" has the meaning assigned by Section 156.002.
(b)
Except as provided by Subsection (c), financial requirements for holding a
residential mortgage loan originator license shall be met through
participation in the recovery fund.
(c)
An exclusive agent of a financial services company meets the agent's
financial requirements for holding a residential mortgage loan originator
license by obtaining surety bond coverage in an amount equal to $1 million.
|
SECTION
62. Subchapter D, Chapter 157, Finance Code, as added by this Act, is
amended by adding Sections 157.0131 and 157.0132 to read as follows:
No equivalent provision.
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|
Sec.
157.0132. CONVICTION OF OFFENSE.
|
Sec.
157.0131. CONVICTION OF OFFENSE.
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|
Sec.
157.0133. CRIMINAL AND OTHER BACKGROUND CHECKS. (a) On receipt of an
application for a residential mortgage loan originator license, the
commissioner shall, at a minimum, conduct a criminal background and credit
history check of the applicant.
(b)
The commissioner shall conduct criminal background and credit history
checks in accordance with Section 180.054, and, in connection with each
application for a residential mortgage loan originator license or other
individual license, the commissioner may conduct a criminal background
check through the Department of Public Safety.
(c)
The commissioner shall keep confidential any background information
obtained under this section and may not release or disclose the information
unless:
(1)
the information is a public record at the time the commissioner obtains the
information; or
(2)
the commissioner releases the information:
(A)
under order from a court;
(B) with the permission of the applicant;
(C) to a person through whom the applicant is
conducting or will conduct business; or
(D)
to a governmental agency.
(d)
Notwithstanding Subsection (c), criminal history record information
obtained from the Federal Bureau of Investigation may be released or
disclosed only to a governmental entity or as authorized by federal statute,
federal rule, or federal executive order.
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Sec.
157.0132. CRIMINAL AND OTHER BACKGROUND CHECKS. (a) On receipt of an
application for a residential mortgage loan originator license, the
commissioner shall, at a minimum, conduct a criminal background and credit
history check of the applicant.
(b)
The commissioner shall conduct criminal background and credit history
checks in accordance with Section 180.054, and, in connection with each
application for a residential mortgage loan originator license or other
individual license, the commissioner may conduct a criminal background
check through the Department of Public Safety.
(c)
The commissioner shall keep confidential any background information
obtained under this section and may not release or disclose the information
unless:
(1)
the information is a public record at the time the commissioner obtains the
information; or
(2)
the commissioner releases the information:
(A)
under order from a court; or
(B) to
a governmental agency.
(d)
Notwithstanding Subsection (c), criminal history record information
obtained from the Federal Bureau of Investigation may be released or
disclosed only to a governmental entity or as authorized by federal
statute, federal rule, or federal executive order.
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|
SECTION
53. Subchapter C, Chapter 157, Finance Code, as added by this Act, is
amended by adding Section 157.0141.
|
SECTION
63. Substantially same as introduced version.
|
|
SECTION
54. Section 157.015, Finance Code, is amended by amending Subsections (a),
(b), (c), and (d) and adding Subsections (d-1) and (h) to read as follows:
(a) Except as provided by Subsection (b), a
residential mortgage loan originator license issued under this chapter is
valid through December 31 of the year of issuance and may be renewed on or
before its expiration date if the residential mortgage loan originator:
(1)
pays to the commissioner a renewal fee in an amount determined by the
commissioner not to exceed $500 and a recovery fund fee as provided by
Section 156.502;
(2)
continues to meet the minimum requirements for license issuance; and
(3)
provides the commissioner with satisfactory evidence that the residential
mortgage loan originator has attended, during the term of the current
license, continuing education courses in accordance with the applicable
requirements of Chapter 180. [A residential mortgage loan originator
license issued under this chapter is valid for one year and may be renewed
on or before its expiration date.]
(b) A license issued under this chapter to a
registered financial services company's exclusive agent is valid through
December 31 of the year of issuance and may be renewed on or before the
expiration date if the exclusive agent complies with the requirements of
Subsections (a)(2) and (3). In this subsection, registered financial
services company has the meaning assigned by Section 156.002. [Each
residential mortgage loan originator license will be renewed for not more
than a one-year period expiring December 31 of each calendar year.]
(c) An
application for renewal of a residential
mortgage loan originator license shall meet
the requirements of Section 157.013(a) [157.013].
(d) On
receipt of a request for a renewal of a license issued under this
subchapter, the commissioner may conduct a criminal background check under
Section 157.0133. [An application for renewal of a residential
mortgage loan originator license must meet all of the standards and
qualifications for license renewal under Chapter 180.]
(d-1)
A renewal fee is not refundable and may not be credited or applied to any
other fee or indebtedness owed by the person paying the fee.
(h)
In addition to the disciplinary action by the commissioner authorized under
Section 157.024(a)(6), the commissioner may collect a fee in an amount not
to exceed $50 for any returned check or credit card charge back.
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SECTION
64. Section 157.015, Finance Code, is amended by amending Subsections (a),
(c), (d), and (g) and adding Subsections (d-1) and (h) to read as follows:
(a) A
residential mortgage loan originator license issued under this chapter is
valid through December 31 of the year of issuance and may be renewed on or
before its expiration date if the residential mortgage loan originator:
(1)
pays to the commissioner a renewal fee in an amount determined by the
commissioner not to exceed $500 and a recovery fund fee as provided by
Section 156.502;
(2)
continues to meet the minimum requirements for license issuance; and
(3)
provides the commissioner with satisfactory evidence that the residential
mortgage loan originator has attended, during the term of the current
license, continuing education courses in accordance with the applicable
requirements of Chapter 180. [A residential mortgage loan originator
license issued under this chapter is valid for one year and may be renewed
on or before its expiration date.]
(c) An
application for renewal [of a residential
mortgage loan originator license] shall be in the form prescribed by the commissioner [meet the requirements of Section 157.013].
(d) On
receipt of a request for a renewal of a license issued under this
subchapter, the commissioner may conduct a criminal background check under
Section 157.0132. [An application for renewal of a residential
mortgage loan originator license must meet all of the standards and
qualifications for license renewal under Chapter 180.]
(d-1)
A renewal fee is not refundable and may not be credited or applied to any
other fee or indebtedness owed by the person paying the fee.
(g) The commissioner may deny the renewal
application for a residential mortgage loan originator license if:
(1) the person seeking the renewal of the
residential mortgage loan originator license is in violation of this
chapter, Chapter 156, or Chapter 180, an applicable rule adopted
under this chapter, Chapter 156, or Chapter 180, or any order
previously issued to the person by the commissioner;
(2) the person seeking renewal of the residential
mortgage loan originator license is in default in the payment of any administrative
penalty, fee, charge, or other indebtedness owed under this title;
(3) the person seeking the renewal of the
residential mortgage loan originator license is in default on a student
loan administered by the Texas Guaranteed Student Loan Corporation, under
Section 57.491, Education Code; or
(4) during the current term of the license, the
commissioner 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.
(h) In
addition to the disciplinary action by the commissioner authorized under
Section 157.024(a)(6), the commissioner may collect a fee in an amount not
to exceed $50 for any returned check or credit card charge back.
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|
No equivalent provision.
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SECTION
65. Section 157.016(a), Finance Code, is amended to read as follows:
(a) A
person whose residential mortgage loan originator license has expired may
not engage in activities that require a license until the license has been reinstated
or a new license has been issued [renewed].
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|
SECTION
55. Section 157.017(g), Finance Code, is amended.
|
SECTION
66. Same as introduced version.
|
|
SECTION
56. The heading to Section 157.019, Finance Code, is amended.
|
SECTION
67. Same as introduced version.
|
|
SECTION
57. Section 157.019, Finance Code, is amended by amending Subsection (c)
and adding Subsections (d) and (e) to read as follows:
(c) When
the sponsorship of a residential mortgage loan originator is terminated,
the residential mortgage loan originator or the registered mortgage banker or residential mortgage loan company that
had been sponsoring the originator shall immediately notify the
commissioner. The residential mortgage loan originator's license then
becomes inactive. The residential mortgage loan originator license may be
activated if, before the license expires, a registered
mortgage banker or licensed or registered residential mortgage loan company
files a request, accompanied by a $25 fee, notifying the commissioner that
the banker or company will sponsor the
residential mortgage loan originator and will assume responsibility for the
actions of the residential mortgage loan originator. [A mortgage
banker employee who is a residential mortgage loan originator shall notify
the commissioner or authorized designee in writing of a change of
sponsorship. The notice must be accompanied by a fee of $25.]
(d) A
residential mortgage loan originator may not conduct business under any
assumed name that is not the registered assumed name of a residential mortgage loan company
sponsoring the originator.
(e) A
fee under this section is not refundable and may not be credited or applied
to any other fee or indebtedness owed by the person paying the fee.
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SECTION
68. Section 157.019, Finance Code, is amended by amending Subsections (a)
and (c) and adding Subsections (d) and (e) to read as follows:
(a) Before the 10th day preceding the effective
date of an address change, [a mortgage banker employee who is] a
residential mortgage loan originator shall notify the commissioner or
authorized designee in writing of the new address.
(c) When
the sponsorship of a residential mortgage loan originator is terminated,
the residential mortgage loan originator or the former sponsoring entity licensed or registered under this chapter
or Chapter 156 shall immediately notify the commissioner. The
residential mortgage loan originator's license then becomes inactive. The
residential mortgage loan originator license may be activated if, before
the license expires, an entity licensed or
registered under this chapter or Chapter 156 files a request,
accompanied by a $25 fee, notifying the commissioner that the entity will sponsor the residential mortgage
loan originator and will assume responsibility for the actions of the
residential mortgage loan originator. [A mortgage banker employee
who is a residential mortgage loan originator shall notify the commissioner
or authorized designee in writing of a change of sponsorship. The notice
must be accompanied by a fee of $25.]
(d) A
residential mortgage loan originator may not conduct business under any
assumed name that is not the registered assumed name of the entity licensed or registered under this
chapter or Chapter 156 that is sponsoring the originator.
(e) A
fee under this section is not refundable and may not be credited or applied
to any other fee or indebtedness owed by the person paying the fee.
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|
SECTION
58. Section 157.020, Finance Code, is amended by adding Subsection (a-1)
to read as follows:
(a-1)
Each licensed residential mortgage loan originator, as required by the
commissioner, shall file a mortgage call report with the commissioner or
the commissioner's authorized designee on a form prescribed by the
commissioner or authorized designee. The report:
(1)
is a statement of condition of the residential mortgage loan originators sponsored by a residential mortgage loan company,
including financial statements and production activity volumes;
(2)
must include any other information required by the commissioner; and
(3)
must be filed as frequently as required by the commissioner.
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SECTION
69. Section 157.020, Finance Code, is amended by adding Subsection (a-1)
to read as follows:
(a-1) A
licensed residential mortgage loan originator, as required by the
commissioner, shall file a mortgage call report with the commissioner or
the commissioner's authorized designee on a form prescribed by the
commissioner or authorized designee. The report:
(1) is
a statement of condition of the residential mortgage loan originator;
(2)
must include any information required by the commissioner; and
(3)
must be filed as frequently as required by the commissioner.
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|
SECTION
59. Subchapter C, Chapter 157, Finance Code, as added by this Act, is
amended by adding Sections 157.02012, 157.02013, 157.02014, 157.02015,
157.02016, 157.02017, 157.02018, and 157.02019 to read as follows:
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SECTION
70. Subchapter D, Chapter 157, Finance Code, as added by this Act, is
amended by adding Sections 157.02012, 157.02013, 157.02014, 157.02015, and
157.02016 to read as follows:
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|
Sec.
157.02012. DISCLOSURE TO APPLICANT. (a) At the time an applicant
submits an application to a residential mortgage loan originator, the
residential mortgage loan originator shall provide to the applicant a
disclosure that specifies:
(1)
the nature of the relationship between the applicant and the residential
mortgage loan originator;
(2)
the duties the residential mortgage loan originator has to the applicant;
and
(3)
how the residential mortgage loan originator will be compensated.
(b)
The finance commission by rule shall adopt a standard disclosure form to be
used by the residential mortgage loan originator.
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No equivalent provision.
|
|
Sec.
157.02013. STANDARD FORMS. (a) The finance commission by rule shall
adopt one or more standard forms for use by a residential mortgage loan
originator in representing that an applicant for a residential mortgage
loan is preapproved or has prequalified for the loan.
(b)
The finance commission shall adopt rules requiring a residential mortgage
loan originator licensed under this chapter to use the forms adopted by the
finance commission under Subsection (a).
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Sec.
157.02012. STANDARD FORMS. (a) The finance commission by rule shall
adopt one or more standard forms for use by a residential mortgage loan
originator, sponsored by and conducting
business for a registered mortgage banker under this chapter, in
representing that an applicant for a residential mortgage loan is
preapproved or has prequalified for the loan.
(b)
The finance commission shall adopt rules requiring a residential mortgage
loan originator licensed under this chapter to use the forms adopted by the
finance commission under Subsection (a).
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|
Sec.
157.02014. FEE ASSESSMENT AND DISCLOSURE. (a) Before the completion of
all services to be performed, a residential mortgage loan originator may
charge and receive, unless prohibited by law, the following fees for
services in assisting a mortgage applicant to obtain a residential mortgage
loan:
(1) a
fee to obtain a credit report;
(2) a
fee for the appraisal of the real estate;
(3) a
fee for processing a residential mortgage loan application;
(4) a
fee for taking a residential mortgage loan application;
(5) a
fee for automated underwriting;
(6) a
fee for a courier service;
(7) a
fee to issue a loan commitment; or
(8)
subject to Subsection (b), a fee for locking in an interest rate.
(b) A
residential mortgage loan originator may not charge or receive a fee for
locking in an interest rate unless there is a written agreement signed by
the mortgage applicant and the residential mortgage loan originator that
contains a statement of whether the fee to lock in the interest rate is
refundable and, if so, the terms and conditions necessary to obtain the refund.
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No equivalent provision.
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|
Sec.
157.02015. SECONDARY MARKET TRANSACTIONS. This chapter does not prohibit
a residential mortgage loan originator from receiving compensation from a
party other than the mortgage applicant for the sale, transfer, assignment,
or release of rights on the closing of a mortgage transaction.
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Sec.
157.02013. SECONDARY MARKET TRANSACTIONS. This chapter does not prohibit
a residential mortgage loan originator sponsored
by and conducting business for a registered mortgage banker under this
chapter from receiving compensation from a party other than the
mortgage applicant for the sale, transfer, assignment, or release of rights
on the closing of a mortgage transaction.
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|
Sec.
157.02016. AFFILIATED BUSINESS ARRANGEMENTS. Unless prohibited by federal
or state law, this chapter may not be construed to prevent affiliated or
controlled business arrangements or loan origination services by or between
residential mortgage loan originators and other professionals if the
residential mortgage loan originator complies with all applicable federal
and state laws permitting those arrangements or services.
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Sec.
157.02014. AFFILIATED BUSINESS ARRANGEMENTS. Unless prohibited by federal
or state law, this chapter may not be construed to prevent affiliated or
controlled business arrangements or loan origination services by or between
residential mortgage loan originators sponsored by and conducting business for a registered mortgage banker under
this chapter and other professionals if the residential mortgage
loan originator complies with all applicable federal and state laws
permitting those arrangements or services.
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|
Sec.
157.02017. RULEMAKING AUTHORITY WITH RESPECT TO RESIDENTIAL MORTGAGE LOAN
ORIGINATORS.
|
Sec.
157.02015. RULEMAKING AUTHORITY WITH RESPECT TO RESIDENTIAL MORTGAGE LOAN
ORIGINATORS.
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|
Sec.
157.02018. MORTGAGE INDUSTRY ADVISORY COMMITTEE; RESIDENTIAL MORTGAGE LOAN
ORIGINATORS. (a) In addition to other powers and duties delegated by the
commissioner to the mortgage industry advisory committee created under
Section 156.104, the advisory committee shall advise the commissioner with
respect to:
(1)
the proposal and adoption of rules relating to:
(A)
the licensing of residential mortgage loan originators;
(B)
the education and experience requirements for licensing residential
mortgage loan originators; and
(C)
the conduct and ethics of residential mortgage loan originators;
(2)
the form of or format for any applications or other documents under this
subchapter or Subchapter D; and
(3)
the interpretation, implementation, and enforcement of this subchapter or
Subchapter D.
(b)
The advisory committee shall take a record vote on any matter described by
Subsection (a)(1). The commissioner shall inform the finance commission
of:
(1)
the result of the vote; and
(2)
any additional information the commissioner considers necessary to ensure
the finance commission is sufficiently notified of the advisory committee's
recommendations.
(c) A
record vote taken by the advisory committee under Subsection (b) is only a
recommendation and does not supersede the rulemaking authority of the
finance commission under this subchapter.
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No equivalent provision.
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|
Sec.
157.02019. ADMINISTRATION OF SUBCHAPTER. The commissioner shall
administer and enforce this subchapter.
|
Sec.
157.02016. ADMINISTRATION OF SUBCHAPTER. The commissioner shall
administer and enforce this subchapter.
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|
SECTION
60. Sections 157.021, 157.0211, 157.022, 157.023, 157.024, 157.0241,
157.025, 157.026, 157.027, 157.028, 157.029, 157.030, and 157.031, Finance
Code, are designated as Subchapter D, Chapter 157, Finance Code, and a
heading is added to that subchapter.
|
SECTION
71. Substantially same as introduced version.
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|
SECTION
61. Section 157.021, Finance Code, is amended by amending Subsection (a)
and adding Subsection (h) to read as follows:
(a) The
commissioner may conduct an inspection of a person licensed as a
residential mortgage loan originator as the commissioner determines
necessary to determine whether the person is complying with this chapter,
Chapter 180, and applicable rules. An inspection under this subsection may
include inspection of the books, records, documents, operations, and
facilities of the person. The commissioner may request the assistance and
cooperation of a sponsoring [the] mortgage banker in
providing needed documents and records. The commissioner may not make a
request of a sponsoring [the] mortgage banker for documents
and records unrelated to the person being investigated or inspected. The
commissioner may share evidence of criminal activity gathered during an
inspection or investigation with any state or federal law enforcement
agency.
(h)
The commissioner may require reimbursement of expenses for each examiner
for an on-site examination or inspection of a licensed residential mortgage
loan originator if records are located out of state and are not made
available for examination or inspection by the examiner in this state.
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SECTION
72. Section 157.021, Finance Code, is amended by amending Subsection (a)
and adding Subsection (h) to read as follows:
(a) The
commissioner may conduct an inspection of a person licensed as a
residential mortgage loan originator as the commissioner determines
necessary to determine whether the person is complying with this chapter,
Chapter 180, and applicable rules. An inspection under this subsection may
include inspection of the books, records, documents, operations, and
facilities of the person. The commissioner may request the assistance and
cooperation of the sponsoring mortgage banker in providing needed
documents and records. The commissioner may not make a request of the sponsoring
mortgage banker for documents and records unrelated to the person being
investigated or inspected. The commissioner may share evidence of criminal
activity gathered during an inspection or investigation with any state or
federal law enforcement agency.
(h)
The commissioner may require reimbursement of expenses for each examiner
for an on-site examination or inspection of a licensed residential mortgage
loan originator if records are located out of state and are not made
available for examination or inspection by the examiner in this state. The finance commission by rule shall set the
maximum amount for the reimbursement of expenses authorized under this
subsection.
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|
SECTION
62. Section 157.0211, Finance Code, is amended to read as follows:
Sec.
157.0211. MULTI-STATE EXAMINATION AUTHORITY OF RESIDENTIAL MORTGAGE LOAN
SERVICER. To ensure that mortgage bankers that act as residential mortgage
loan servicers operate in this state in compliance with this chapter and
with other law in accordance with this chapter, the commissioner or the
commissioner's designee may participate in multi-state mortgage examinations
as scheduled by the Conference of State Bank Supervisors Multi-State
Mortgage Committee or by the Consumer Financial Protection Bureau in
accordance with the [Conference of State Bank Supervisors] protocol
for such examinations.
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SECTION
73. Same as introduced version.
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|
No equivalent provision.
|
SECTION
74. Section 157.023(a), Finance Code, is amended to read as follows:
(a) The
commissioner, after notice and opportunity for a hearing, may impose an
administrative penalty on an individual who is licensed or required to be
licensed under this chapter as a residential mortgage loan originator and
who violates this chapter, Chapter 156, or a rule or order adopted
under this chapter or Chapter 156.
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|
SECTION
63. Section 157.024(a), Finance Code, is amended to read as follows:
(a) The
commissioner may order disciplinary action against a licensed residential
mortgage loan originator when the commissioner, after notice and
opportunity for a hearing, has determined that the person:
(1)
obtained a license, including a renewal of a license, under this chapter
through a false or fraudulent representation or made a material
misrepresentation in an application for a license or for the renewal of a
license under this chapter;
(2)
published or caused to be published an advertisement related to the
business of a residential mortgage loan originator that:
(A) was
misleading;
(B) was
likely to deceive the public;
(C) in
any manner tended to create a misleading impression;
(D)
failed to identify as a licensed residential mortgage loan originator the
person causing the advertisement to be 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 or Chapter 156 who was
expected or required to act as a residential mortgage loan originator or
residential mortgage loan company; or
(18)
charged or received, directly or indirectly, a fee for assisting a mortgage
applicant in obtaining a residential mortgage loan before all of the
services that the person agreed to perform for the mortgage applicant are
completed, and the proceeds of the residential mortgage loan have been
disbursed to or on behalf of the mortgage applicant, except as provided by Section 157.02014.
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SECTION
75. Sections 157.024(a), (h), and (j), Finance Code, are amended to read
as follows:
(a) The
commissioner may order disciplinary action against a licensed residential
mortgage loan originator when the commissioner, after notice and opportunity
for a hearing, has determined that the person:
(1) obtained
a license, including a renewal of a license, under this chapter through a
false or fraudulent representation or made a material misrepresentation in
an application for a license or for the renewal of a license under this
chapter;
(2)
published or caused to be published an advertisement related to the
business of a residential mortgage loan originator that:
(A) was
misleading;
(B) was
likely to deceive the public;
(C) in
any manner tended to create a misleading impression;
(D)
failed to identify as a licensed residential mortgage loan originator the
person causing the advertisement to be published; or
(E)
violated federal or state law;
(3) while
performing an act for which a license under this chapter or Chapter 156 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 credit
card charge back or a check issued to the commissioner after the
commissioner mailed a request for payment, including
any applicable fees, by mail to the person's last known home [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 or Chapter 156;
(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, Chapter
156, a rule adopted under this chapter or Chapter 156, or an order issued by
the commissioner under this chapter or
Chapter 156;
(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 or Chapter 156 is required; [or]
(17)
established an association, by employment or otherwise, with a person not
licensed, registered, or exempt
under this chapter or Chapter 156 who was expected or required to
act as a residential mortgage loan originator or residential mortgage
loan company; or
(18)
charged or received, directly or indirectly, a fee for assisting a mortgage
applicant in obtaining a residential mortgage loan under Chapter 156 before all of the services that the person
agreed to perform for the mortgage applicant are completed, and the
proceeds of the residential mortgage loan have been disbursed to or on
behalf of the mortgage applicant, except as provided by Section 156.304.
(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 and all compensation
received by the residential mortgage loan originator during the period of
suspension is subject to forfeiture as provided by Section 157.031(a-1)
[, as defined by Section 180.002].
(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,
residential mortgage loan company, or residential mortgage loan originator
for a residential mortgage loan company.
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No equivalent provision.
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SECTION
76. Section 157.0241(e), Finance Code, is amended to read as follows:
(e) This
section does not limit the authority of the commissioner to take
disciplinary action against a residential mortgage loan originator for a
violation of this chapter, Chapter 156, or the rules adopted by the
finance commission under this chapter or Chapter 156. The repayment
in full to the recovery fund of all obligations of a residential mortgage
loan originator does not nullify or modify the effect of any other
disciplinary proceeding brought under this chapter or Chapter 156.
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No equivalent provision.
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SECTION
77. Section 157.025, Finance Code, is amended to read as follows:
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 or Chapter 156.
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SECTION
64. Section 157.026, Finance Code, is amended by adding Subsection (e) to
read as follows:
(e)
The commissioner may, in the commissioner's discretion, rescind or vacate
any previously issued revocation order.
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SECTION
78. Section 157.026, Finance Code, is amended by amending Subsection (b)
and adding Subsection (e) to read as follows:
(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.
(e)
The commissioner may, in the commissioner's discretion, rescind or vacate
any previously issued revocation order.
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No equivalent provision.
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SECTION
79. Section 157.027(a), Finance Code, is amended to read as follows:
(a) A
residential mortgage loan applicant injured by a violation of this chapter or
Chapter 156 by a residential mortgage loan originator may bring an
action for recovery of actual monetary damages and reasonable attorney's
fees and court costs.
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No equivalent provision.
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SECTION
80. Section 157.030(b), Finance Code, is amended to read as follows:
(b) This
section does not limit or preclude the liability of a residential mortgage
loan originator for:
(1)
failing to comply with this chapter, Chapter 156, or a rule adopted
under this chapter or Chapter 156;
(2)
failing to comply with a provision of or duty arising under an agreement
with a residential mortgage loan applicant under this chapter or Chapter
156; or
(3)
violating any other state or federal law.
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SECTION
65. Section 157.031, Finance Code, is amended by amending Subsection (a)
and adding Subsection (a-1) to read as follows:
(a) A
person who is not exempt under this chapter and who acts as a residential
mortgage loan originator without first obtaining a license required under
this chapter commits an offense. [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.
(a-1)
A person who received money, or the
equivalent of money, as a fee or profit because of or in consequence of the
person acting as a residential
mortgage loan originator without an active license or being exempt under
this chapter is liable for damages in an amount that is not less than the
amount of the fee or profit received and not to exceed three times the
amount of the fee or profit received, as may be determined by the court.
An aggrieved person may recover damages under this subsection in a court.
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SECTION
81. Section 157.031, Finance Code, is amended by amending Subsection (a)
and adding Subsection (a-1) to read as follows:
(a) An
individual who is not exempt under this chapter or other applicable law and who acts as a residential mortgage
loan originator without first obtaining a license required under this
chapter commits an offense. [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.
(a-1)
An individual who received money, or
the equivalent of money, as a fee or profit because of or in consequence of
the individual acting as a residential
mortgage loan originator without an active license or being exempt under
this chapter is liable for damages in an amount that is not less than the
amount of the fee or profit received and not to exceed three times the
amount of the fee or profit received, as may be determined by the court.
An aggrieved person may recover damages under this subsection in a court.
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SECTION
66. Subchapter D, Chapter 157, Finance Code, as added by this Act, is
amended.
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SECTION
82. Substantially same as introduced version.
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SECTION
67. Section 158.104, Finance Code, is amended.
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SECTION
83. Same as introduced version.
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SECTION
68. Sections 180.002(17) and (21), Finance Code, are amended.
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SECTION
84. Same as introduced version.
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SECTION 69.
Section 180.056(a), Finance Code, is amended to read as follows:
(a) An
applicant for a residential mortgage loan originator license must complete
education courses that include[, at a minimum,] at least the minimum
number of hours and type of courses required by the S.A.F.E. Mortgage
Licensing Act and the minimum number of hours of training related to
lending standards for the nontraditional mortgage product marketplace
required by that Act and any additional requirements established by the
regulatory official.
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SECTION
85. Section 180.056(a), Finance Code, is amended to read as follows:
(a) An
applicant for a residential mortgage loan originator license must complete
education courses that include[, at a minimum,] at least the minimum
number of hours and type of courses required by the S.A.F.E. Mortgage
Licensing Act and the minimum number of hours of training related to
lending standards for the nontraditional mortgage product marketplace
required by that Act and any additional requirements established by the
regulatory official and adopted by rule of
the rulemaking authority.
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SECTION
70. Section 180.251(a), Finance Code, is amended.
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SECTION
86. Same as introduced version.
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SECTION
71. The following provisions of the Finance Code are repealed:
(1)
Section 15.4024;
(2)
Sections 156.003, 156.004, 156.005, 156.105,
156.2015, 156.205, 156.304, and
156.405;
(3)
Sections 156.101(a-1) and (a-2);
(4)
Sections 156.201(b), (b-1), and (b-2);
(5)
Sections 156.202(c), 156.203(c), 156.2041(b), 156.2042(b), 156.2043(b),
156.2044(c), 156.2045(b), 156.207(b),
(c), and (d), 156.2081(c), and 156.406(a) and
(b);
(6)
Section 157.012(d); and
(7)
Section 180.251(b).
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SECTION
87. The following provisions of the Finance Code are repealed:
(1)
Section 15.4024;
(7) Section 157.003(f), Finance Code, as added by Chapter 655 (S.B.
1124), Acts of the 82nd Legislature, Regular Session, 2011;
(2)
Sections 156.2015, 156.205, and 156.405;
(3)
Sections 156.101(a-1) and (a-2);
(4)
Sections 156.201(b), (b-1), and (b-2);
(5)
Sections 156.102(b), 156.202(c),
156.203(c), 156.2041(b), 156.2042(b), 156.2043(b), 156.2044(c), 156.2045, 156.206(a), 156.207(b), (c), and (d), and
156.2081(c);
(6) Sections 156.208(b-1), (b-2), and (j);
(8)
Sections 157.012(d) and 157.015(b);
and
(9)
Section 180.251(b).
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SECTION
72. The changes in law made by this Act do not affect any pending
proceeding or action brought under Subchapter D, Chapter 156, Finance Code,
as that subchapter existed immediately before amendment by this Act, and
the former law is continued in effect for that purpose.
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SECTION
88. Same as introduced version.
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SECTION
73. The changes in law made by this Act apply only to a license or
registration issued or renewed on or after the effective date of this Act.
A license or registration issued or renewed before the effective date of
this Act is governed by the law in effect on the date the license or
registration was issued or renewed, and the former law is continued in
effect for that purpose.
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SECTION
89. Same as introduced version.
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SECTION
74. This Act takes effect September 1, 2013.
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SECTION
90. Same as introduced version.
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