87th Session Recap - Lending

H.B. 3617 - Relating to certain qualifications and requirements for residential mortgage loan companies, the investment and use of excess residential mortgage loan originator recovery fund fees, and the creation of the mortgage grant fund; changing a fee.

This bill modifies some the qualifications and requirements of licensed mortgage companies and the regulation of the Department of Savings and Mortgage Lending.

Current law requires mortgage bank loan originators licensed by the Department of Savings and Mortgage Lending to maintain a physical location in Texas. Reflecting the pandemic's impact on our economy, H.B. 3617 eliminates the requirements for certain mortgage loan companies to maintain a physical office in Texas.

This new law will have some limited impact on manufactured home lenders, and modular home lenders.  The changes are only made to the law dealing with mortgage loan companies under Chapter 156, Finance Code, which means for our industry lenders who loan on real property, i.e. land-home and residential construction home loans. 

This does not impact chattel lenders regulated under Chapter 347, Finance Code, regulated by the OCCC under Chapter 14, Finance Code, which does not have a similar in-state physical office or branch location requirement for a chattel lending company.  However, each location at which a credit transaction is originated, serviced, or collected must be registered with the OCCC.

This new law goes into effect on September 1, 2021.