This is the third legislative update prepared by this firm for the 2011 legislative session of the Texas Legislature and summarizes Senate Bill 17, Regulation of Residential Mortgage Loan Servicers, and House Bill 1146, Registration and Regulation of Appraisal Management Companies. The legislative updates that follow this update will summarize the following bills that we consider are of interest to our clients: (i) bills effective September 1, 2011, that were not addressed in our Part One legislative update dated August 15, 2011; (ii) additional bill(s) that we consider important enough to be the subject of a separate legislative update; and (iii) bills and constitutional amendments effective after September 1, 2011. REGULATION OF RESIDENTIAL MORTGAGE LOAN SERVICERS (SB 17) Overview. Senate Bill 17 adds new Chapter 158 (the “Residential Mortgage Loan Servicer Registration Act”) to the Finance Code to require the registration and regulation of residential mortgage loan servicers, and amends Chapter 157 (the “Mortgage Banker Registration and Residential Mortgage Loan Originator License Act”) to add provisions related to mortgage bankers acting as residential mortgage loan servicers. Definitions. Chapter 158 provides the following definitions: ○ Registrant means as a person registered under Chapter 158. ○ Residential mortgage loan means a loan primarily for personal, family, or household use secured by a mortgage, deed of trust or other equivalent consensual security interest on a dwelling or on residential real estate. ○ Residential mortgage loan servicer means a person who receives (i) scheduled payments from a borrower under a residential mortgage loan, including escrow account amounts, and (ii) makes the payments of principal and interest to the owner of the loan (or other third party) and makes any other payments from the sums received from the borrower as required under the servicing agreement. ○ Residential real estate means Texas real property on which a one to four family dwelling is constructed or intended to be constructed.
