82R1028 KFF-D
	By: Lucio	S.B. No. 1319

	A BILL TO BE ENTITLED
	AN ACT
	relating to home loans that are not federally related mortgage
	loans; providing civil penalties.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Chapter 343, Finance Code, is amended by adding
	Subchapter D to read as follows:
	SUBCHAPTER D. NONFEDERALLY RELATED MORTGAGE LOANS
	Sec. 343.301.  DEFINITION. In this subchapter, "mortgage
	servicer" has the meaning assigned by Section 51.0001, Property
	Code.
	Sec. 343.302.  APPLICABILITY. This subchapter applies only
	to a home loan that is not a federally related mortgage loan, as
	defined by 12 U.S.C. Section 2602.
	Sec. 343.303.  RULES. The finance commission may adopt
	rules necessary to implement this subchapter.
	Sec. 343.304.  MONTHLY STATEMENTS REQUIRED. (a)  A lender
	shall provide to the borrower a monthly statement that clearly and
	conspicuously states:
	(1)  the amount received by the lender as payment
	towards the home loan during the preceding month;
	(2)  how the amount described by Subdivision (1) was
	applied to the borrower's account, including a statement of the
	amount that was applied to:
	(A)  the borrower's principal obligation under
	the loan;
	(B)  the interest charged on the loan;
	(C)  any escrow or suspense account associated
	with the loan; and
	(D)  any fee or other charge assessed against the
	borrower during the preceding month; and
	(3)  the outstanding balance of the borrower's
	principal obligation under the loan.
	(b)  If a lender violates this section, the affected borrower
	may file suit against the lender:
	(1)  for any appropriate injunctive relief; and
	(2)  to recover:
	(A)  the borrower's actual damages;
	(B)  $100 for each statement the lender fails to
	provide to the borrower as required by Subsection (a);
	(C)  $50 for each statement provided to the
	borrower that does not substantially comply with the requirements
	of Subsection (a); and
	(D)  the borrower's court costs and reasonable
	attorney's fees.
	Sec. 343.305.  ANNUAL ACCOUNTING STATEMENT. (a)  A lender
	shall provide to the borrower an annual statement in January of each
	year for the term of the home loan. The statement must clearly and
	conspicuously state the following information:
	(1)  the amount of each payment that was received by the
	lender as payment towards the home loan during the preceding
	calendar year;
	(2)  how each payment described by Subdivision (1) was
	applied to the borrower's account, including a statement of the
	amount of each payment that was applied to:
	(A)  the borrower's principal obligation under
	the loan;
	(B)  the interest charged on the loan;
	(C)  any escrow or suspense account associated
	with the loan; and
	(D)  any fee or other charge assessed against the
	borrower during the preceding calendar year; and
	(3)  the outstanding balance of the borrower's
	principal obligation under the loan.
	(b)  If a lender violates this section, the affected borrower
	may file suit against the lender:
	(1)  for any appropriate injunctive relief; and
	(2)  to recover:
	(A)  the borrower's actual damages;
	(B)  $500 for each annual statement the lender
	fails to provide to the borrower as required under Subsection (a);
	(C)  $300 for each annual statement provided to
	the borrower that does not substantially comply with the
	requirements of Subsection (a); and
	(D)  the borrower's court costs and reasonable
	attorney's fees.
	(c)  In addition to the remedies available under Subsection
	(b), a lender that fails to provide the annual statement required
	under Subsection (a) with respect to a given calendar year may not
	demand payment of any amount the lender claims the borrower owes
	with respect to that calendar year until the lender provides the
	required statement.
	Sec. 343.306.  PAYOFF STATEMENTS. (a)  In this section,
	"payoff statement" has the meaning assigned by Section 12.017,
	Property Code.
	(b)  Except as provided by Subsection (c) and subject to
	Subsection (d), a mortgage servicer may not charge a fee for
	preparing or transmitting a payoff statement to a borrower or other
	person requesting a payoff statement on behalf of the borrower.
	(c)  A mortgage servicer may charge a reasonable processing
	fee to cover the cost of providing a payoff statement by facsimile
	transmission or by a courier service if before charging the fee, the
	mortgage servicer discloses to the requestor that payoff statements
	are available for free if the requestor requests that the statement
	be provided in a manner that will not result in the charging of a
	processing fee.
	(d)  After a mortgage servicer has provided four payoff
	statements during a calendar year to or on behalf of a borrower
	under Subsection (b) without charge, other than processing fees
	authorized under Subsection (c), the mortgage servicer may charge a
	reasonable fee for providing a payoff statement to or on behalf of
	the borrower during the remainder of the calendar year.
	(e)  A mortgage servicer shall provide a payoff statement not
	later than the 10th day after the date the lender receives the
	request for the payoff statement from or on behalf of a borrower,
	and the statement must be valid for a reasonable time after being
	provided to the requestor.
	(f)  If a mortgage servicer violates this section, the
	borrower may file suit against the mortgage servicer:
	(1)  for any appropriate injunctive relief; and
	(2)  to recover:
	(A)  the borrower's actual damages;
	(B)  $100 for each payoff statement the lender
	fails to provide to or on behalf of the borrower as required by this
	section; and
	(C)  the borrower's court costs and reasonable
	attorney's fees.
	Sec. 343.307.  RESTRICTIONS ON USE OF DEEDS IN LIEU OF
	FORECLOSURE. (a)  A lender may not obtain, file, or threaten to
	file a deed that conveys or purports to convey real property
	securing a home loan to the lender in satisfaction of a debt and is
	signed by the borrower at a time when the borrower is not in default
	on the loan.
	(b)  If a lender violates this section, the affected borrower
	may file suit against the lender:
	(1)  for any appropriate injunctive relief; and
	(2)  to recover:
	(A)  the borrower's actual damages;
	(B)  a penalty in an amount equal to 10 percent of
	the original principal amount of the home loan; and
	(C)  the borrower's court costs and reasonable
	attorney's fees.
	Sec. 343.308.  NOTICE OF ASSIGNMENT, SALE, OR OTHER TRANSFER
	OF LOAN SERVICING.  (a)  Except as provided by Subsection (f), a
	mortgage servicer shall notify the borrower in writing of any
	assignment, sale, or other transfer of the servicing of a home loan
	to any other person.
	(b)  The notice required by Subsection (a) must contain:
	(1)  the effective date of the transfer;
	(2)  the name, address, and telephone number of the
	transferee mortgage servicer;
	(3)  the name and telephone number of an individual
	employed by, or the office or department of, the transferor
	mortgage servicer that can be contacted by the borrower to answer
	inquiries relating to the transfer of servicing;
	(4)  the name and telephone number of an individual
	employed by, or the office or department of, the transferee
	mortgage servicer that can be contacted by the borrower to answer
	inquiries relating to the transfer of servicing;
	(5)  the date on which the transferor mortgage servicer
	who is servicing the mortgage loan before the assignment, sale, or
	other transfer will cease to accept payments relating to the loan
	and the date on which the transferee mortgage servicer will begin to
	accept the payments;
	(6)  any information concerning any effect the transfer
	may have on the terms or the continued availability of mortgage life
	or disability insurance or any other type of optional insurance and
	what action, if any, the borrower must take to maintain coverage;
	and
	(7)  a statement that the assignment, sale, or other
	transfer of the servicing of the loan does not affect any term or
	condition of the security instruments other than terms directly
	related to the servicing of the loan.
	(c)  Except as provided by Subsection (e), a transferor
	mortgage servicer shall provide the notice required under
	Subsection (a) not later than the 15th day before the effective date
	of the assignment, sale, or other transfer of the servicing of the
	home loan.
	(d)  A transferee mortgage servicer to which the servicing of
	a home loan is assigned, sold, or otherwise transferred shall
	notify the borrower of the transfer to the same extent as a
	transferor mortgage servicer is required to notify the borrower of
	the transfer. Except as provided by Subsection (e), the notice must
	be provided not later than the 15th day after the effective date of
	the transfer.
	(e)  A mortgage servicer shall provide the notice required by
	Subsection (a) or (d) not later than the 30th day after the
	effective date of the assignment, sale, or other transfer of the
	servicing of the home loan if the transfer was preceded by:
	(1)  termination of the contract for servicing the loan
	for cause; or
	(2)  commencement of proceedings for bankruptcy of the
	servicer or an entity by which the servicer is owned or controlled.
	(f)  A transferor mortgage servicer or transferee mortgage
	servicer is not required to provide notice of an assignment, sale,
	or other transfer of the servicing of a home loan as required by
	this section if the lender provides to the borrower, at settlement
	with respect to the property for the purchase of which the loan is
	made, written notice of the assignment, sale, or other transfer of
	the servicing of the loan and that notice contains the information
	required by Subsection (b).
	(g)  A mortgage servicer may not impose a late fee on a
	borrower with respect to, or otherwise treat as late, any payment on
	a home loan made by the borrower during the period beginning on the
	effective date of the assignment, sale, or other transfer of the
	servicing of the loan and ending on the 60th day after that date if
	the payment is received by the transferor servicer instead of the
	transferee servicer before the applicable due date.
	Sec. 343.309.  NOTICE OF ASSIGNMENT, SALE, OR OTHER TRANSFER
	OF HOME LOAN.  (a)  A lender shall notify the borrower in writing of
	any assignment, sale, or other transfer of a home loan to any other
	person not later than the 15th day before the effective date of the
	transfer.
	(b)  The notice required under Subsection (a) must contain:
	(1)  the effective date of the transfer;
	(2)  the name and telephone number of an individual
	employed by, or the office or department of, the transferor lender
	that can be contacted by the borrower to answer inquiries relating
	to the transfer of the loan; and
	(3)  the name and telephone number of an individual
	employed by, or the office or department of, the transferee that can
	be contacted by the borrower to answer inquiries relating to the
	transfer of the loan.
	Sec. 343.310.  DUTY OF MORTGAGE SERVICER TO RESPOND TO
	BORROWER REQUEST. (a)  If a mortgage servicer receives a qualified
	written request from the borrower or an agent of the borrower for
	information relating to the servicing of the loan, the servicer
	shall, not later than the fifth day after the date the request is
	received, provide a written response acknowledging receipt of the
	correspondence or take the requested action. For purposes of this
	subsection, a qualified written request is a written
	correspondence, other than notice on a payment coupon or other
	payment medium supplied by the servicer, that:
	(1)  includes, or otherwise enables the servicer to
	identify, the name and account of the borrower; and
	(2)  states, to the extent applicable, the reasons the
	borrower believes that the account is in error or provides
	sufficient detail to the servicer regarding other information
	sought by the borrower.
	(b)  Not later than the 30th day after the date the request is
	received, and, if applicable, before taking action with respect to
	the request, the mortgage servicer shall:
	(1)  make appropriate corrections to the borrower's
	account, including the crediting of any late charges or penalties,
	and shall transmit to the borrower a written notification of the
	correction, including the name and telephone number of a
	representative of the servicer who can assist the borrower;
	(2)  after conducting an investigation, provide to the
	borrower a written explanation or clarification that states:
	(A)  to the extent applicable, the reasons the
	servicer believes the account is correct as determined by the
	servicer; and
	(B)  the name and telephone number of an
	individual employee of, or the office or department of, the
	servicer who can assist the borrower; or
	(3)  after conducting an investigation, provide to the
	borrower:
	(A)  a written explanation or clarification that
	includes information requested by the borrower;
	(B)  a written explanation of why the information
	requested is unavailable or cannot be obtained by the servicer; and
	(C)  the name and telephone number of an
	individual employee of, or the office or department of, the
	servicer who can assist the borrower.
	(c)  During the period beginning on the date a servicer
	receives from a borrower a qualified written request relating to a
	dispute regarding the borrower's payments and ending on the 60th
	day after that date, a servicer may not provide to a consumer
	reporting agency, as defined by 15 U.S.C. Section 1681a,
	information regarding any overdue payment owed by the borrower and
	relating to the period or qualified written request.
	Sec. 343.311.  FORCE-PLACED HAZARD INSURANCE. (a)  In this
	section, "force-placed hazard insurance" means hazard insurance
	coverage obtained by a mortgage servicer with respect to real
	property securing a home loan when the borrower fails to maintain or
	renew hazard insurance on the property as required under the terms
	of the loan.
	(b)  A mortgage servicer may not obtain force-placed hazard
	insurance unless the servicer has a reasonable basis to believe
	that the borrower has failed to comply with the terms of the home
	loan requiring that the borrower maintain hazard insurance on the
	property.
	(c)  For purposes of this section, a mortgage servicer does
	not have a reasonable basis for obtaining force-placed hazard
	insurance unless:
	(1)  the servicer has mailed, by first-class mail, a
	written notice to the borrower that contains:
	(A)  a reminder of the borrower's obligation to
	maintain hazard insurance on the property securing the home loan;
	(B)  a statement that the servicer does not have
	evidence of the required insurance coverage of the property;
	(C)  a clear and conspicuous statement of the
	procedures by which the borrower may demonstrate that the borrower
	already has the required coverage; and
	(D)  a statement that the servicer may obtain the
	required coverage at the borrower's expense if the borrower does
	not demonstrate that the borrower has the required coverage in a
	timely manner;
	(2)  the servicer has mailed, by first-class mail, a
	second written notice, not later than the 30th day after the date
	the notice under Subdivision (1) was mailed, that contains all the
	information described by that subdivision; and
	(3)  the servicer has not received from the borrower
	any demonstration of the required coverage for the property
	securing the home loan by the end of the 15-day period beginning on
	the date the notice under Subdivision (2) was mailed by the
	servicer.
	(d)  A mortgage servicer must accept from a borrower any
	reasonable form of written confirmation that the borrower has the
	required coverage, including:
	(1)  the existing insurance policy number along with
	the identity of and contact information for the insurance company
	or agent; or
	(2)  confirmation authorized by finance commission
	rule.
	(e)  Not later than the 15th day after the date a mortgage
	servicer receives confirmation that a borrower has the required
	hazard insurance coverage, the servicer shall:
	(1)  terminate any force-placed hazard insurance; and
	(2)  refund to the borrower:
	(A)  all force-placed hazard insurance premiums
	paid by the borrower during any period in which the borrower's
	insurance coverage and the force-placed hazard insurance coverage
	were both in effect; and
	(B)  any related fees charged to the borrower's
	account with respect to the force-placed hazard insurance during
	that period.
	(f)  A charge relating to force-placed hazard insurance
	imposed on a borrower by or through a mortgage servicer must be bona
	fide and reasonable.
	Sec. 343.312.  LIABILITY FOR CERTAIN VIOLATIONS UNDER THIS
	SUBCHAPTER.  (a)  Except as provided by Subsection (e), a mortgage
	servicer that violates Section 343.308 or 343.310 is liable to the
	borrower for damages as provided by this section.
	(b)  If an action is brought under this section by a single
	borrower, the mortgage servicer is liable for:
	(1)  any actual damages to the borrower as a result of
	the violation; and
	(2)  any additional damages the court allows, in the
	case of a pattern or practice of violations of this section, in an
	amount not to exceed $2,000.
	(c)  If the action is a class action, the mortgage servicer
	is liable for:
	(1)  any actual damages to each of the borrowers in the
	class as a result of the violation; and
	(2)  any additional damages the court allows, in the
	case of a pattern or practice of violations of this section, in an
	amount not to exceed $1,000 for each member of the class, provided
	that the total amount of damages under this subdivision in any class
	action may not exceed the lesser of:
	(A)  $1,000,000; or
	(B)  one percent of the net worth of the mortgage
	servicer.
	(d)  In addition to the amounts awarded under Subsection (b)
	or (c), a mortgage servicer who violates this section is liable for
	court costs and reasonable attorney's fees incurred in connection
	with the action.
	(e)  A mortgage servicer is not liable under this section for
	any failure to comply with a requirement of Section 343.308 or
	343.310 if, not later than the 60th day after the date an error is
	discovered by the servicer and before the commencement of an action
	under this section and the receipt of written notice of the error
	from the borrower, the servicer notifies the borrower of the error
	and makes any adjustments necessary to the appropriate account to
	ensure that the borrower will not be required to pay an amount in
	excess of any amount that the borrower otherwise would have paid.
	SECTION 2.  This Act takes effect January 1, 2012.