CHAPTER 180. RESIDENTIAL MORTGAGE LOAN ORIGINATORS

State Codes and Statutes

Statutes > Texas > Finance-code > Title-3-financial-institutions-and-businesses > 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

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;

(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;

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;

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);

(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

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).

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.

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.

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.

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).

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.

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.

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.

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;

(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.

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.

(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.

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.

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

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