HB4166 - Relating to an exemption for certain property owners from regulatory requirements for residential mortgage loan originators.

  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.