Relating to an exemption for certain property owners from regulatory requirements for residential mortgage loan originators.

89(R) HB 4166 - House Committee Report version - Bill Text

89R4944 SRA-F

By: Guillen

H.B. No. 4166

A BILL TO BE ENTITLED

AN ACT

relating to an exemption for certain property owners from

regulatory requirements for residential mortgage loan originators.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 156.2012(b), Finance Code, is amended to

read as follows:

(b) To be eligible to register as a registered financial

services company, a person must:

(1) be a depository institution exempt from this

chapter under Section
156.202(a-1)(5)(A)
[
156.202(a-1)(4)(A)
] and

chartered and regulated by the Office of the Comptroller of the

Currency, or be a subsidiary of the institution;

(2) provide a business plan satisfactory to the

commissioner that sets forth the person's plan to:

(A) provide education to its sponsored

residential mortgage loan originators;

(B) handle consumer complaints relating to its

sponsored residential mortgage loan originators; and

(C) supervise the residential mortgage loan

origination activities of its sponsored residential mortgage loan

originators;

(3) pay a registration fee in an amount not to exceed

$500;

(4) designate an officer of the person to be

responsible for the activities of its sponsored residential

mortgage loan originators;

(5) submit a completed application through the

Nationwide Mortgage Licensing System and Registry together with the

applicable fee required by Subdivision (3) or Subsection (c);

(6) obtain preapproval from the commissioner that the

person meets the eligibility requirements for registration as a

financial services company; and

(7) not be in violation of this chapter, a rule adopted

under this chapter, or any order previously issued by the

commissioner to the applicant.

SECTION 2. Section 156.202(a-1), Finance Code, is amended

to read as follows:

(a-1) The following entities are exempt from this chapter:

(1) a nonprofit organization:

(A) 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; or

(B) that has designation as a Section 501(c)(3)

organization by the Internal Revenue Service and originates

residential mortgage loans for borrowers who, through a self-help

program, have provided at least 200 labor hours or 65 percent of the

labor to construct the dwelling securing the loan;

(2) a mortgage banker registered under Chapter 157;

(3) subject to Subsection (b), any owner of

residential real estate who in any 12-consecutive-month period

makes no more than three residential mortgage loans to purchasers

of the property for all or part of the purchase price of the

residential real estate against which the mortgage is secured;

[
and
]

(4)
an owner of residential real estate who makes a

first lien mortgage loan to a purchaser of the property against

which the mortgage is secured, provided that all residential

mortgage loan origination activity in connection with the loan is

provided by a properly sponsored and authorized licensee who is

required to comply with the requirements of Chapter 180; and

(5)
an entity that is:

(A) a depository institution;

(B) a subsidiary of a depository institution that

is:

(i) owned and controlled by the depository

institution; and

(ii) regulated by a federal banking agency;

or

(C) an institution regulated by the Farm Credit

Administration.

SECTION 3. Section 180.003(a), Finance Code, is amended to

read as follows:

(a) 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 offers or negotiates terms of a

residential mortgage loan secured by a dwelling that serves as the

individual's residence;

(5) subject to Subsection (d), an owner of residential

real estate who in any 12-consecutive-month period makes no more

than three residential mortgage loans to purchasers of the property

for all or part of the purchase price of the residential real estate

against which the mortgage is secured; [
and
]

(6) subject to Subsection (d), an owner of a dwelling

who in any 12-consecutive-month period makes no more than three

residential mortgage loans to purchasers of the property for all or

part of the purchase price of the dwelling against which the

mortgage or security interest is secured
; and

(7)

an owner of residential real estate who makes a

first lien mortgage loan to a purchaser of the property against

which the mortgage is secured, provided that all residential

mortgage loan origination activity in connection with the loan is

provided by a properly sponsored and authorized licensee who is

required to comply with the requirements of this chapter
.

SECTION 4. This Act takes effect September 1, 2025.