This is the second legislative update from the 81st Regular Session of the Texas Legislature, 2009, prepared by this firm and summarizes House Bills 10, 2774, and 2779 that provide for the regulation of Texas residential mortgage loan originators in order to comply with the federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act) enacted by Congress on July 30, 2008. HOUSE BILL 10 Overview. The SAFE Act requires states to establish minimum standards for the licensing and registration of state licensed mortgage loan originators. The SAFE Act also establishes a Nationwide Mortgage Licensing System and Registry (NMLSR) that: (i) provides uniform license applications and reporting requirements for state licensed loan originators; (ii) provides a comprehensive licensing and supervisory database; (iii) provides tracking of loan originators; (iv) streamlines the licensing process; and (v) facilitates the collection and disbursement of consumer complaints on behalf of the state. The NMLSR will establish protocols for a unique identifier that will permanently identify each residential mortgage loan originator enrolled with the NMLSR and facilitate the electronic tracking and uniform identification of the enrolled residential mortgage loan originator. Under the SAFE Act, a residential mortgage loan originator must obtain and annually maintain a license and registration as a state licensed residential mortgage loan originator. Texas must meet the minimum requirements outlined in the SAFE Act by July 31, 2010, to prevent the U.S. Department of Housing and Urban Development (HUD) from implementing and administering its own mortgage licensing and registration system for the state. Summary. House Bill 10 was enacted to comply with the SAFE Act. It amends several sections of the Finance Code, and adds Chapter 180 to establish the Texas Secure and Fair Enforcement for Mortgage Licensing Act of 2009 (T-SAFE). House Bill 10 requires any individual who originates residential mortgage loans to be annually licensed by their appropriate state financial regulatory agency and be enrolled with the NMLSR. House Bill 10 outlines minimum requirements for obtaining a residential mortgage loan origination license, enumerates prohibited acts and practices by a residential mortgage loan originator, and outlines the authority of state financial regulatory agencies to enforce the requirements. House Bill 10 also requires the Consumer Credit Commissioner to establish and administer a recovery fund to reimburse residential mortgage loan applicants who incurred damages from residential mortgage loan originators licensed by the Commissioner (i.e., licensed under Chapters 342, 347, 348, or 351 of the Finance Code) who committed a prohibited act.