CHAPTER 180. RESIDENTIAL MORTGAGE LOAN ORIGINATORS
FINANCE CODE
TITLE 3. FINANCIAL INSTITUTIONS AND BUSINESSES
SUBTITLE E. OTHER FINANCIAL BUSINESSES
CHAPTER 180. RESIDENTIAL MORTGAGE LOAN ORIGINATORS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 180.001. SHORT TITLE. This chapter may be cited as the
Texas Secure and Fair Enforcement for Mortgage Licensing Act of
2009.
Added by Acts 2009, 81st Leg., R.S., Ch.
1104, Sec. 1, eff. June 19, 2009.
Sec. 180.002. DEFINITIONS. In this chapter:
(1) "Clerical or support duties," following the receipt of an
application from a consumer, includes:
(A) the receipt, collection, distribution, and analysis of
information related to the processing or underwriting of a
residential mortgage loan; and
(B) communication with a consumer to obtain information
necessary to process or underwrite a loan, to the extent that the
communication does not include offering or negotiating loan rates
or terms or counseling the consumer about residential mortgage
loan rates or terms.
(2) "Credit union" means a state or federal credit union
operating in this state.
(3) "Credit union subsidiary organization" means an agency,
association, or company wholly or partly owned by a credit union
that is designed primarily to serve or otherwise assist credit
union operations. The term includes a credit union service
organization authorized by:
(A) Section 124.351(a)(1);
(B) Credit Union Commission rule; or
(C) Part 712 of the National Credit Union Administration's Rules
and Regulations.
(4) "Depository institution" has the meaning assigned by Section
3, Federal Deposit Insurance Act (12 U.S.C. Section 1813). The
term includes a credit union but does not include a credit union
subsidiary organization.
(5) "Dwelling" has the meaning assigned by Section 103(v) of the
Truth in Lending Act (15 U.S.C. Section 1602(v)).
(6) "Federal banking agency" means:
(A) the Board of Governors of the Federal Reserve System;
(B) the Office of the Comptroller of the Currency;
(C) the Office of Thrift Supervision;
(D) the National Credit Union Administration;
(E) the Federal Deposit Insurance Corporation; or
(F) the successor of any of those agencies.
(7) "Finance commission" means the Finance Commission of Texas.
(8) "Immediate family member" means the spouse, child, sibling,
parent, grandparent, or grandchild of an individual. The term
includes a stepparent, stepchild, and stepsibling and a
relationship established by adoption.
(9) "Individual" means a natural person.
(10) "License" means a license issued under the laws of this
state to an individual acting as or engaged in the business of a
residential mortgage loan originator.
(11) "Loan processor or underwriter" means an individual who
performs clerical or support duties as an employee at the
direction of and subject to the supervision and instruction of an
individual licensed as a residential mortgage loan originator or
exempt from licensure under Section 180.003.
(12) "Nationwide Mortgage Licensing System and Registry" means a
mortgage licensing system developed and maintained by the
Conference of State Bank Supervisors and the American Association
of Residential Mortgage Regulators for the licensing and
registration of state residential mortgage loan originators.
(13) "Nontraditional mortgage product" means a mortgage product
other than a 30-year fixed rate mortgage.
(14) "Person" means an individual, corporation, company, limited
liability company, partnership, or association.
(15) "Real estate brokerage activity" means an activity that
involves offering or providing real estate brokerage services to
the public, including:
(A) acting as a real estate broker or salesperson for a buyer,
seller, lessor, or lessee of real property;
(B) bringing together parties interested in the sale, purchase,
lease, rental, or exchange of real property;
(C) negotiating, on a party's behalf, any provision of a
contract relating to the sale, purchase, lease, rental, or
exchange of real property, other than a negotiation conducted in
connection with providing financing with respect to such a
transaction;
(D) engaging in an activity for which a person is required to be
registered or licensed by the state as a real estate broker or
salesperson; and
(E) offering to engage in an activity described by Paragraphs
(A) through (D) or to act in the same capacity as a person
described by Paragraphs (A) through (D).
(16) "Registered mortgage loan originator" means an individual
who:
(A) is a residential mortgage loan originator and is an employee
of:
(i) a depository institution;
(ii) a subsidiary that is:
(a) owned and controlled by a depository institution; and
(b) regulated by a federal banking agency; or
(iii) an institution regulated by the Farm Credit
Administration; and
(B) is registered with, and maintains a unique identifier
through, the Nationwide Mortgage Licensing System and Registry.
(17) "Regulatory official" means:
(A) with respect to Subtitles A, F, and G of this title, the
banking commissioner of Texas;
(B) with respect to Chapters 156 and 157 except as provided by
Paragraph (D), the savings and mortgage lending commissioner;
(C) with respect to Chapters 342, 347, 348, and 351, the
consumer credit commissioner; and
(D) with respect to credit unions, to the examination,
investigation, or inspection of employees of credit union
subsidiary organizations licensed under Chapter 156, and to the
enforcement of compliance with this chapter and Chapter 156 by
those employees, the credit union commissioner.
(18) "Residential mortgage loan" means a loan primarily for
personal, family, or household use that is secured by a mortgage,
deed of trust, or other equivalent consensual security interest
on a dwelling or on residential real estate.
(19) "Residential mortgage loan originator":
(A) means an individual who for compensation or gain or in the
expectation of compensation or gain:
(i) takes a residential mortgage loan application; or
(ii) offers or negotiates the terms of a residential mortgage
loan; and
(B) does not include:
(i) an individual who performs solely administrative or clerical
tasks on behalf of an individual licensed as a residential
mortgage loan originator or exempt from licensure under Section
180.003, except as otherwise provided by Section 180.051;
(ii) an individual who performs only real estate brokerage
activities and is licensed or registered by the state as a real
estate broker or salesperson, unless the individual is
compensated by:
(a) a lender, mortgage broker, or other residential mortgage
loan originator; or
(b) an agent of a lender, mortgage broker, or other residential
mortgage loan originator;
(iii) an individual licensed under Chapter 1201, Occupations
Code, unless the individual is directly compensated for arranging
financing for activities regulated under that chapter by:
(a) a lender, mortgage broker, or other residential mortgage
loan originator; or
(b) an agent of a lender, mortgage broker, or other residential
mortgage loan originator;
(iv) an individual who receives the same benefits from a
financed transaction as the individual would receive if the
transaction were a cash transaction; or
(v) an individual who is involved solely in providing extensions
of credit relating to timeshare plans, as defined by 11 U.S.C.
Section 101(53D).
(20) "Residential real estate" means real property located in
this state on which a dwelling is constructed or intended to be
constructed.
(21) "Rulemaking authority" means:
(A) the finance commission, except as provided by Paragraph (B);
or
(B) with respect to credit unions and the rulemaking authority
granted by Section 15.4024, the Credit Union Commission.
(22) "S.A.F.E. Mortgage Licensing Act" means the federal Secure
and Fair Enforcement for Mortgage Licensing Act of 2008 (Pub. L.
No. 110-289).
(23) "Unique identifier" means a number or other identifier
assigned by protocols established by the Nationwide Mortgage
Licensing System and Registry.
Added by Acts 2009, 81st Leg., R.S., Ch.
1104, Sec. 1, eff. June 19, 2009.
Sec. 180.003. EXEMPTION. The following persons are exempt from
this chapter:
(1) a registered mortgage loan originator when acting for an
entity described by Section 180.002(16)(A)(i), (ii), or (iii);
(2) an individual who offers or negotiates 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:
(A) is an exclusive agent of a registered financial services
company;
(B) is exempt from regulation under Chapter 156 as provided by
Section 156.202(5); and
(C) is individually enrolled as a registered mortgage loan
originator with the Nationwide Mortgage Licensing System and
Registry;
(5) an individual who offers or negotiates terms of a
residential mortgage loan secured by a dwelling that serves as
the individual's residence; and
(6) 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.
Added by Acts 2009, 81st Leg., R.S., Ch.
1104, Sec. 1, eff. June 19, 2009.
Sec. 180.004. ADMINISTRATIVE AUTHORITY; RULEMAKING. (a) A
regulatory official has broad authority to administer, interpret,
and enforce this chapter.
(b) The finance commission may implement rules necessary to
comply with this chapter and as required to carry out the
intentions of the federal Secure and Fair Enforcement for
Mortgage Licensing Act of 2008 (Pub. L. No. 110-289).
(c) This chapter does not limit the authority of a regulatory
official to take disciplinary action against a license holder for
a violation of this chapter or the rules adopted by the
regulatory official under this chapter. A regulatory official
has broad authority to investigate, revoke a license, and inform
the proper authority when fraudulent conduct or a violation of
this chapter occurs.
Added by Acts 2009, 81st Leg., R.S., Ch.
1104, Sec. 1, eff. June 19, 2009.
Sec. 180.005. SEVERABILITY. The provisions of this chapter or
applications of those provisions are severable as provided by
Section 311.032(c), Government Code.
Added by Acts 2009, 81st Leg., R.S., Ch.
1104, Sec. 1, eff. June 19, 2009.
SUBCHAPTER B. LICENSING AND REGISTRATION REQUIREMENTS
Sec. 180.051. STATE LICENSE REQUIRED; RENEWAL. (a) Unless
exempted by Section 180.003, an individual may not engage in
business as a residential mortgage loan originator with respect
to a dwelling located in this state unless the individual:
(1) is licensed to engage in that business under Chapter 156,
157, 342, 347, 348, or 351; and
(2) complies with the requirements of this chapter.
(b) Unless exempted by Section 180.003, a loan processor or
underwriter who is an independent contractor may not engage in
the activities of a loan processor or underwriter unless the
independent contractor loan processor or underwriter obtains and
maintains the appropriate residential mortgage loan originator
license and complies with the requirements of this chapter.
(c) The individual must renew the license annually to be
considered licensed for purposes of this section.
(d) Notwithstanding any provision of law listed in Subsection
(a)(1), the regulatory official shall provide for annual renewal
of licenses for individuals seeking to engage in residential
mortgage loan origination activities.
Added by Acts 2009, 81st Leg., R.S., Ch.
1104, Sec. 1, eff. June 19, 2009.
Sec. 180.052. ENROLLMENT OR REGISTRATION WITH NATIONWIDE
MORTGAGE LICENSING SYSTEM AND REGISTRY. (a) A licensed
residential mortgage loan originator must enroll with and
maintain a valid unique identifier issued by the Nationwide
Mortgage Licensing System and Registry.
(b) A non-federally insured credit union that employs loan
originators, as defined by the S.A.F.E. Mortgage Licensing Act,
shall register those employees with the Nationwide Mortgage
Licensing System and Registry by furnishing the information
relating to the employees' identity set forth in Section
1507(a)(2) of the S.A.F.E. Mortgage Licensing Act.
(c) Each independent contractor loan processor or underwriter
licensed as a residential mortgage loan originator must have and
maintain a valid unique identifier issued by the Nationwide
Mortgage Licensing System and Registry.
(d) The regulatory official who administers the law under which
a residential mortgage loan originator is licensed shall require
the residential mortgage loan originator to be enrolled with the
Nationwide Mortgage Licensing System and Registry.
(e) For purposes of implementing Subsection (d), the regulatory
official may participate in the Nationwide Mortgage Licensing
System and Registry.
Added by Acts 2009, 81st Leg., R.S., Ch.
1104, Sec. 1, eff. June 19, 2009.
Sec. 180.053. APPLICATION FORM. (a) A regulatory official
shall prescribe application forms for a license as a residential
mortgage loan originator.
(b) A regulatory official may change or update an application
form as necessary to carry out the purposes of this chapter.
Added by Acts 2009, 81st Leg., R.S., Ch.
1104, Sec. 1, eff. June 19, 2009.
Sec. 180.054. CRIMINAL AND OTHER BACKGROUND CHECKS. (a) In
connection with an application for a license as a residential
mortgage loan originator, the applicant shall, at a minimum,
furnish in the form and manner prescribed by the regulatory
official and acceptable to the Nationwide Mortgage Licensing
System and Registry information concerning the applicant's
identity, including:
(1) fingerprints for submission to the Federal Bureau of
Investigation and any governmental agency or entity authorized to
receive the information to conduct a state, national, and
international criminal background check; and
(2) personal history and experience information in a form
prescribed by the Nationwide Mortgage Licensing System and
Registry, including the submission of authorization for the
Nationwide Mortgage Licensing System and Registry and the
appropriate regulatory official to obtain:
(A) an independent credit report obtained from a consumer
reporting agency described by Section 603(p), Fair Credit
Reporting Act (15 U.S.C. Section 1681a(p)); and
(B) information related to any administrative, civil, or
criminal findings by a governmental jurisdiction.
(b) For purposes of this section and to reduce the points of
contact that the Federal Bureau of Investigation may have to
maintain for purposes of Subsection (a)(1), a regulatory official
may use the Nationwide Mortgage Licensing System and Registry as
a channeling agent for requesting information from and
distributing information to the United States Department of
Justice, any governmental agency, or any source at the regulatory
official's direction.
(c) For purposes of this section and to reduce the points of
contact that a regulatory official may have to maintain for
purposes of Subsection (a) or (b), the regulatory official may
use the Nationwide Mortgage Licensing System and Registry as a
channeling agent for requesting information from and distributing
information to and from any source as directed by the regulatory
official.
Added by Acts 2009, 81st Leg., R.S., Ch.
1104, Sec. 1, eff. June 19, 2009.
Sec. 180.055. ISSUANCE OF LICENSE. (a) The regulatory official
may not issue a residential mortgage loan originator license to
an individual unless the regulatory official determines, at a
minimum, that the applicant:
(1) has not had a residential mortgage loan originator license
revoked in any governmental jurisdiction;
(2) has not been convicted of, or pled guilty or nolo contendere
to, a felony in a domestic, foreign, or military court:
(A) during the seven-year period preceding the date of
application; or
(B) at any time preceding the date of application, if the felony
involved an act of fraud, dishonesty, breach of trust, or money
laundering;
(3) demonstrates financial responsibility, character, and
general fitness so as to command the confidence of the community
and to warrant a determination that the individual will operate
honestly, fairly, and efficiently as a residential mortgage loan
originator within the purposes of this chapter and any other
appropriate regulatory law of this state;
(4) provides satisfactory evidence that the applicant has
completed prelicensing education courses described by Section
180.056;
(5) provides satisfactory evidence of having passed a written
test that meets the requirements of Section 180.057; and
(6) has paid a recovery fund fee or obtained a surety bond as
required under the appropriate state regulatory law.
(b) A revocation that has been formally vacated may not be
considered a license revocation for purposes of Subsection
(a)(1).
(c) A conviction for which a full pardon has been granted may
not be considered a conviction for purposes of Subsection (a)(2).
(d) For purposes of Subsection (a)(3), an individual is
considered not to be financially responsible if the individual
has shown a lack of regard in managing the individual's own
financial affairs or condition. A determination that an
individual has not shown financial responsibility may include:
(1) an outstanding judgment against the individual, other than a
judgment imposed solely as a result of medical expenses;
(2) an outstanding tax lien or other governmental liens and
filings;
(3) a foreclosure during the three-year period preceding the
date of the license application; and
(4) a pattern of seriously delinquent accounts during the
three-year period preceding the date of the application.
Added by Acts 2009, 81st Leg., R.S., Ch.
1104, Sec. 1, eff. June 19, 2009.
Sec. 180.056. PRELICENSING EDUCATIONAL COURSES. (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.
(b) Education courses required under this section must be
reviewed and approved by the Nationwide Mortgage Licensing System
and Registry in accordance with the S.A.F.E. Mortgage Licensing
Act.
(c) Nothing in this section precludes any education course
approved in accordance with the S.A.F.E. Mortgage Licensing Act
from being provided by:
(1) an applicant's employer;
(2) an entity affiliated with the applicant by an agency
contract; or
(3) a subsidiary or affiliate of the employer or entity.
(d) Education courses required under this section may be offered
in a classroom, online, or by any other means approved by the
Nationwide Mortgage Licensing System and Registry.
(e) An individual who has successfully completed prelicensing
education requirements approved by the Nationwide Mortgage
Licensing System and Registry for another state shall be given
credit toward completion of the prelicensing education
requirements of this section.
(f) An applicant who has previously held a residential mortgage
loan originator license that meets the requirements of this
chapter and other appropriate regulatory law, before being issued
a new original license, must demonstrate to the appropriate
regulatory official that the applicant has completed all
continuing education requirements for the calendar year in which
the license was last held by the applicant.
(g) If the appropriate federal regulators and the Nationwide
Mortgage Licensing System and Registry establish additional
educational requirements for licensed residential mortgage loan
originators, the rulemaking authority shall adopt necessary rules
to implement the changes to the educational requirements of this
section.
Added by Acts 2009, 81st Leg., R.S., Ch.
1104, Sec. 1, eff. June 19, 2009.
Sec. 180.057. TESTING REQUIREMENTS. (a) An applicant for a
residential mortgage loan originator license must pass a
qualified, written test that:
(1) meets the standards and requirements established by the
S.A.F.E. Mortgage Licensing Act;
(2) is developed by the Nationwide Mortgage Licensing System and
Registry; and
(3) is administered by a test provider in accordance with the
S.A.F.E. Mortgage Licensing Act.
(b) An individual may retake the test the number of times and
within the period prescribed by the S.A.F.E. Mortgage Licensing
Act.
(c) An individual who fails to maintain a residential mortgage
loan originator license for at least five consecutive years must
retake the test.
(d) This section does not prohibit a test provider approved in
accordance with the S.A.F.E. Mortgage Licensing Act from
providing a test at the location of:
(1) the license applicant's employer;
(2) a subsidiary or affiliate of the applicant's employer; or
(3) an entity with which the applicant holds an exclusive
arrangement to conduct the business of a residential mortgage
loan originator.
Added by Acts 2009, 81st Leg., R.S., Ch.
1104, Sec. 1, eff. June 19, 2009.
Sec. 180.058. RECOVERY FUND FEE OR SURETY BOND REQUIREMENT. (a)
A regulatory official may not issue a residential mortgage loan
originator license unless the official determines that the
applicant meets the surety bond requirement or has paid a
recovery fund fee, as applicable, in accordance with the
requirements of the S.A.F.E. Mortgage Licensing Act.
(b) Each regulatory official shall adopt rules requiring an
individual licensed as a residential mortgage loan originator to
obtain a surety bond or pay a recovery fund fee as the official
determines appropriate to comply with the S.A.F.E. Mortgage
Licensing Act.
Added by Acts 2009, 81st Leg., R.S., Ch.
1104, Sec. 1, eff. June 19, 2009.
Sec. 180.059. STANDARDS FOR LICENSE RENEWAL. A license to act
as a residential mortgage loan originator may be renewed on or
before its expiration date if the license holder:
(1) continues to meet the minimum requirements for license
issuance;
(2) pays all required fees for the renewal of the license; and
(3) provides satisfactory evidence that the license holder has
completed the continuing education requirements of Section
180.060.
Added by Acts 2009, 81st Leg., R.S., Ch.
1104, Sec. 1, eff. June 19, 2009.
Sec. 180.060. CONTINUING EDUCATION COURSES. (a) To renew a
residential mortgage loan originator license, a license holder
must annually complete the minimum number of hours and type of
continuing education courses required by the S.A.F.E. Mortgage
Licensing Act, the minimum requirements established by the
Nationwide Mortgage Licensing System and Registry, and any
additional requirements established by the regulatory official.
(b) Continuing education courses, including the course provider,
must be reviewed and approved by the Nationwide Mortgage
Licensing System and Registry as required by the S.A.F.E.
Mortgage Licensing Act. Course credit must be granted in
accordance with that Act.
(c) Nothing in this section precludes any continuing education
course approved in accordance with the S.A.F.E. Mortgage
Licensing Act from being provided by:
(1) the employer of the license holder;
(2) an entity affiliated with the license holder by an agency
contract; or
(3) a subsidiary or affiliate of the employer or entity.
(d) A person who successfully completes continuing education
requirements approved by the Nationwide Mortgage Licensing System
and Registry for another state shall be given credit toward
completion of the continuing education requirements of this
section.
Added by Acts 2009, 81st Leg., R.S., Ch.
1104, Sec. 1, eff. June 19, 2009.
Sec. 180.061. RULEMAKING AUTHORITY. A rulemaking authority may
adopt rules establishing requirements as necessary for:
(1) conducting background checks by obtaining:
(A) criminal history information through fingerprint or other
databases;
(B) civil administrative records;
(C) credit history information; or
(D) any other information considered necessary by the Nationwide
Mortgage Licensing System and Registry;
(2) payment of fees to apply for or renew licenses through the
Nationwide Mortgage Licensing System and Registry;
(3) setting or resetting, as necessary, license renewal dates or
reporting periods;
(4) amending or surrendering a license or any other activity a
regulatory official considers necessary for participation in the
Nationwide Mortgage Licensing System and Registry; and
(5) investigation and examination authority for purposes of
investigating a violation or complaint arising under this chapter
or for purposes of examining, reviewing, or investigating any
license holder or individual subject to this chapter.
Added by Acts 2009, 81st Leg., R.S., Ch.
1104, Sec. 1, eff. June 19, 2009.
Sec. 180.062. CONFIDENTIALITY OF INFORMATION. (a) Except as
otherwise provided by this section, a requirement under federal
or state law regarding the privacy or confidentiality of
information or material provided to the Nationwide Mortgage
Licensing System and Registry, and a privilege arising under
federal or state law, or under the rules of a federal or state
court, continue to apply to the information or material after the
disclosure of the information or material to the Nationwide
Mortgage Licensing System and Registry. The information and
material may be shared with federal and state regulatory
officials with mortgage industry oversight authority without the
loss of any privilege or confidentiality protections afforded by
federal or state laws.
(b) Information or material subject to a privilege or
confidential under Subsection (a) may not be subject to:
(1) disclosure under any federal or state law governing the
disclosure to the public of information held by an officer or an
agency of the federal government or this state; or
(2) subpoena, discovery, or admission into evidence in a private
civil action or administrative proceeding.
(c) A person who is the subject of information or material in
the Nationwide Mortgage Licensing System and Registry may waive,
wholly or partly, any privilege held by the Nationwide Mortgage
Licensing System and Registry with respect to the information or
material.
(d) A regulatory official may enter into an agreement or sharing
arrangement with another governmental agency, the Conference of
State Bank Supervisors, the American Association of Residential
Mortgage Regulators, or other associations representing
appropriate governmental agencies as established by rule of the
rulemaking authority or order issued by the regulatory official.
A protection provided by Subsection (a) also applies to
information and material shared under an agreement or sharing
arrangement entered into under this subsection.
(e) To the extent of a conflict between Subsection (a) and
Chapter 552, Government Code, or another state law relating to
the disclosure of confidential information or information or
material described by Subsection (a), Subsection (a) controls to
the extent Chapter 552, Government Code, or the other law
provides less confidentiality or a weaker privilege than is
provided by Subsection (a).
(f) This section does not apply to information or material
relating to the employment history of, and publicly adjudicated
disciplinary and enforcement actions against, a residential
mortgage loan originator that is included in the Nationwide
Mortgage Licensing System and Registry for access by the public.
Added by Acts 2009, 81st Leg., R.S., Ch.
1104, Sec. 1, eff. June 19, 2009.
SUBCHAPTER C. REPORTING AND OTHER REQUIREMENTS REGARDING
NATIONWIDE MORTGAGE LICENSING SYSTEM AND REGISTRY
Sec. 180.101. MORTGAGE CALL REPORTS. Each licensed residential
mortgage loan originator shall submit to the Nationwide Mortgage
Licensing System and Registry a report of condition that is in
the form and contains the information required by the Nationwide
Mortgage Licensing System and Registry.
Added by Acts 2009, 81st Leg., R.S., Ch.
1104, Sec. 1, eff. June 19, 2009.
Sec. 180.102. REPORT OF VIOLATIONS AND ENFORCEMENT ACTIONS.
Subject to the confidentiality provisions of this chapter, a
regulatory official shall report to the Nationwide Mortgage
Licensing System and Registry on a regular basis regarding
violations of, enforcement actions under, or information relevant
to this chapter or the S.A.F.E. Mortgage Licensing Act under the
regulatory official's licensure, regulation, or examination of a
licensed residential mortgage loan originator or person
registered under the S.A.F.E. Mortgage Licensing Act.
Added by Acts 2009, 81st Leg., R.S., Ch.
1104, Sec. 1, eff. June 19, 2009.
Sec. 180.103. INFORMATION CHALLENGE PROCESS. The applicable
rulemaking authority by rule shall establish a process by which
licensed residential mortgage loan originators may dispute
information submitted by the regulatory official to the
Nationwide Mortgage Licensing System and Registry.
Added by Acts 2009, 81st Leg., R.S., Ch.
1104, Sec. 1, eff. June 19, 2009.
SUBCHAPTER D. BUSINESS PRACTICES; PROHIBITED ACTS
Sec. 180.151. DISPLAY OF UNIQUE IDENTIFIER. The unique
identifier of a person originating a residential mortgage loan
must be clearly shown on each residential mortgage loan
application form, solicitation, or advertisement, including
business cards and websites, and any other document required by
rule of the rulemaking authority.
Added by Acts 2009, 81st Leg., R.S., Ch.
1104, Sec. 1, eff. June 19, 2009.
Sec. 180.152. REPRESENTATIONS. An individual who is engaged
exclusively in loan processor or underwriter activities may not
represent to the public, through the use of advertising, business
cards, stationery, brochures, signs, rate lists, or other means,
that the individual can or will perform any of the activities of
a residential mortgage loan originator unless the individual is
licensed as a residential mortgage loan originator.
Added by Acts 2009, 81st Leg., R.S., Ch.
1104, Sec. 1, eff. June 19, 2009.
Sec. 180.153. PROHIBITED ACTS AND PRACTICES. An individual or
other person subject to regulation under this chapter may not:
(1) employ, directly or indirectly, a scheme, device, or
artifice to defraud or mislead borrowers or lenders or to defraud
a person;
(2) engage in an unfair or deceptive practice toward a person;
(3) obtain property by fraud or misrepresentation;
(4) solicit or enter into a contract with a borrower that
provides in substance that the individual or other person subject
to this chapter may earn a fee or commission through "best
efforts" to obtain a loan even though no loan was actually
obtained for the borrower;
(5) solicit, advertise, or enter into a contract for specific
interest rates, points, or other financing terms unless the terms
are actually available at the time of soliciting, advertising, or
contracting;
(6) conduct any business regulated by this chapter without
holding a license as required by this chapter;
(7) assist, aid, or abet an individual in the conduct of
business without a license required by this chapter;
(8) fail to make disclosures as required by this chapter and any
other applicable state or federal law, including rules or
regulations under applicable state or federal law;
(9) fail to comply with this chapter or rules adopted under this
chapter;
(10) fail to comply with any other state or federal law,
including rules or regulations adopted under that law, applicable
to a business or activity regulated by this chapter;
(11) make, in any manner, a false or deceptive statement or
representation;
(12) negligently make a false statement or knowingly or wilfully
make an omission of material fact in connection with:
(A) information or a report filed with a governmental agency or
the Nationwide Mortgage Licensing System and Registry; or
(B) an investigation conducted by the regulatory official or
another governmental agency;
(13) make a payment, threat, or promise, directly or indirectly,
to a person for purposes of influencing the person's independent
judgment in connection with a residential mortgage loan, or make
a payment, threat, or promise, directly or indirectly, to an
appraiser of property, for purposes of influencing the
appraiser's independent judgment with respect to the property's
value;
(14) collect, charge, attempt to collect or charge, or use or
propose an agreement purporting to collect or charge a fee
prohibited by this chapter;
(15) cause or require a borrower to obtain property insurance
coverage in an amount that exceeds the replacement cost of the
improvements as established by the property insurer; or
(16) fail to truthfully account for money belonging to a party
to a residential mortgage loan transaction.
Added by Acts 2009, 81st Leg., R.S., Ch.
1104, Sec. 1, eff. June 19, 2009.
SUBCHAPTER E. ENFORCEMENT PROVISIONS
Sec. 180.201. ENFORCEMENT AUTHORITY. To ensure the effective
supervision and enforcement of this chapter, a regulatory
official may:
(1) deny, suspend, revoke, condition, or decline to renew a
license for a violation of this chapter, a rule adopted under
this chapter, or an order or directive issued under this chapter;
(2) deny, suspend, revoke, condition, or decline to renew a
license if an applicant or license holder:
(A) fails to meet the requirements of Subchapter B; or
(B) withholds information or makes a material misstatement in an
application for a license or renewal of a license;
(3) order restitution against a person subject to regulation
under this chapter for a violation of this chapter;
(4) impose an administrative penalty on a person subject to
regulation under this chapter, subject to Section 180.202; or
(5) issue orders or directives as provided by Section 180.203.
Added by Acts 2009, 81st Leg., R.S., Ch.
1104, Sec. 1, eff. June 19, 2009.
Sec. 180.202. ADMINISTRATIVE PENALTY. (a) A regulatory
official may impose an administrative penalty on a residential
mortgage loan originator or other person subject to regulation
under this chapter, if the official, after notice and opportunity
for hearing, determines that the residential mortgage loan
originator or other person subject to regulation under this
chapter has violated or failed to comply with:
(1) this chapter;
(2) a rule adopted under this chapter; or
(3) an order issued under this chapter.
(b) The penalty may not exceed $25,000 for each violation.
(c) The amount of the penalty shall be based on:
(1) the seriousness of the violation, including the nature,
circumstances, extent, and gravity of the violation;
(2) the economic harm to property caused by the violation;
(3) the history of previous violations;
(4) the amount necessary to deter a future violation;
(5) efforts to correct the violation; and
(6) any other matter that justice may require.
Added by Acts 2009, 81st Leg., R.S., Ch.
1104, Sec. 1, eff. June 19, 2009.
Sec. 180.203. CEASE AND DESIST ORDERS. A regulatory official
may:
(1) order or direct a person subject to regulation under this
chapter to cease and desist from conducting business, including
issuing an immediate temporary order to cease and desist from
conducting business;
(2) order or direct a person subject to regulation under this
chapter to cease a violation of this chapter or a harmful
activity in violation of this chapter, including issuing an
immediate temporary order to cease and desist;
(3) enter immediate temporary orders against a person subject to
regulation under this chapter to cease engaging in business
under a license if the regulatory official determines that the
license was erroneously granted or the license holder is in
violation of this chapter; and
(4) order or direct other affirmative action as the regulatory
official considers necessary.
Added by Acts 2009, 81st Leg., R.S., Ch.
1104, Sec. 1, eff. June 19, 2009.
SUBCHAPTER F. DUTIES OF REGULATORY OFFICIALS
Sec. 180.251. GENERAL DUTIES OF REGULATORY OFFICIALS. (a)
Except as provided by Subsection (b), the savings and mortgage
lending commissioner shall administer and enforce this chapter
with respect to individuals licensed under Chapter 156 or 157.
(b) The credit union commissioner shall:
(1) examine, inspect, or investigate employees of credit union
subsidiary organizations who are licensed to act as residential
mortgage loan originators under Chapter 156; and
(2) enforce compliance by employees of credit union subsidiary
organizations described by Subdivision (1) with the applicable
requirements of Chapter 156 and this chapter and any applicable
rules adopted under Section 15.4024.
(c) The consumer credit commissioner shall administer and
enforce this chapter with respect to individuals licensed under
Chapter 342, 347, 348, or 351.
(d) To the extent permitted or required by this chapter and as
reasonably necessary for the implementation and enforcement of
the S.A.F.E. Mortgage Licensing Act, the banking commissioner of
Texas may administer and enforce this chapter with respect to a
person otherwise under the commissioner's jurisdiction under
Subtitle A, F, or G of this title.
Added by Acts 2009, 81st Leg., R.S., Ch.
1104, Sec. 1, eff. June 19, 2009.
Sec. 180.252. AUTHORITY OF REGULATORY OFFICIALS TO ESTABLISH
RELATIONSHIP WITH NATIONWIDE MORTGAGE LICENSING SYSTEM AND
REGISTRY; CONTRACTING AUTHORITY. To fulfill the purposes of this
chapter, a regulatory official may establish a relationship with
or contract with the Nationwide Mortgage Licensing System and
Registry or an entity designated by the Nationwide Mortgage
Licensing System and Registry to collect and maintain records and
process transaction fees or other fees related to licensed
residential mortgage loan originators or other persons subject to
regulation under this chapter.
Added by Acts 2009, 81st Leg., R.S., Ch.
1104, Sec. 1, eff. June 19, 2009.