In order to implement the recent legislative changes to the Mortgage Broker License Act (Chapter 156, Finance Code, herein the “Act”) made by House Bills 1716 and 2783 (see our Legislative Update dated August 6, 2007), the Finance Commission of Texas (“Finance Commission”) published in the November 2, 2007 issue of the Texas Register amendments to the following mortgage broker rules: 7 TAC §§80.1 – 80.7 (Licensing), §§80.12 – 80.14 (Administration and Records), §§80.20 and 80.21 (Inspections and Investigations), and §80.23 (Annual Reports). These amended rules become effective November 11, 2007. The following summaries of the amended rules are taken from the Finance Commission’s preamble to the amendments published in the above issue of the Texas Register and the more important rules are reprinted after their respective summaries. §80.1. Scope. House Bill 2783 amended §156.204(b) of the Act to require business entities to be licensed in order to act as mortgage brokers. Prior to HB 2783, only individuals could be licensed as mortgage brokers. The term “person” expressly includes business entities as well as natural persons (see, Code Construction Act, Chapter 311, Government Code). For this reason, the amendments to §80.1 substitute the term “person” for the term “individual” in several provisions. The use of the term “individual” is retained or added in those places where the provision is intended to apply only to a natural person. HB 1716 and HB 2783 amended the exemption language in §156.202 of the Act, which exempts certain persons from the Act. HB 1716 creates a new exemption for individuals who are exclusive agents of registered financial services companies. This new exemption is contained in §80.1(6)(A)(vi). Prior to HB 2783, persons who financed property which they own and sell were exempt from the Act. HB 2783 amended §156.202 of the Act so that this exemption now applies only to owners who make no more than five such loans in any 12-month period. This revised exemption is contained in §80.1(6)(B)(ii).
