A New Year, a new Session, new thresholds, and continued emergency orders

We at TMHA wish all our members a Happy New Year. 

2023 Texas Legislative Session

With 2022 now in the rearview mirror, we look ahead to the coming year.  And it will certainly be a busy one.  The biggest TMHA news starting this year is the coming 88th Texas Legislative Session.  The session starts on Tuesday, January 10th and inauguration is a week later. 

We will have much more throughout the session in our membership posts “From the 88th“ like in previous session years.  What is already clear is that this session will return to the more traditional rhythms of a legislative session as opposed to 2021 which was still heavily impacted by COVID.  If anything, the pre-filing has already shown some pent-up demand for bills.  More than 1,400 bills have already been filed for the coming session.  We expect over the next two months until the bill filing deadline that total will exceed at least 7,000 filed bills.

TX Supreme Court Extends Eviction Provisions in 58th Emergency Order

In other end of year news, on December 30, 2022, the Texas Supreme Court once again extended its emergency orders impacting the residential eviction process.  Based on three different releases by the Treasury Department of additional rental assistance funds for some select local jurisdictions and Texas as a whole, administered through TDHCA, the court has extended the eviction citation requirements and trail processes.  TDHCA is processing prior applications but is not opening up for new applicants.  Some tenants might be eligible for local assistance. 

Regardless of any possible rental assistance, the citation requirements prior to an eviction proceeding and the interaction with the eviction judges will impact all eviction filings.  However, this is now more than two years of operating under these, or very similar, emergency orders.  Said differently, with this amount of time the initially unusual is now usual. 

This latest extension will last until March 1, 2023.

Annual Federal Lending and Reporting Threshold Increases

In a series of end of year announcements, the CFPB issued a final rule amending the official interpretations for Regulation Z, which implements the Truth in Lending Act (TILA). The CFPB is required to calculate annually the dollar amounts for several provisions in Regulation Z. This final rule reviews dollar amounts impacting HOEPA loans and qualified mortgages. 

For our industry the most relevant provisions are:

  • The adjusted points-and-fees dollar trigger for high-cost mortgages in 2023 will be $1,243.
  • For qualified mortgages (QMs) under the General QM loan definition in § 1026.43(e)(2), the thresholds for the spread between the annual percentage rate (APR) and the average prime offer rate (APOR) in 2023 will be: 2.25 or more percentage points for a first-lien covered transaction with a loan amount greater than or equal to $124,331;
  • 5 or more percentage points for a first-lien covered transaction with a loan amount greater than or equal to $74,599 but less than $124,331;
  • 5 or more percentage points for a first-lien covered transaction with a loan amount less than $74,599; and
  • 5 or more percentage points for a first-lien covered transaction secured by a manufactured home with a loan amount less than $124,331;

These adjustments are applicable January 1, 2023.

Additionally, the CFPB announced the asset-size exemption thresholds for certain creditors under the escrow requirements and small creditor portfolio and balloon-payment qualified mortgage requirements, and the small creditor exemption from the prohibition against balloon-payment high-cost mortgages under Regulation Z.

  • For certain first-lien higher-priced mortgage loans, the exemption threshold is adjusted to increase to $2.537 billion from $2.336 billion. Therefore, creditors with assets of less than $2.537 billion (including assets of certain affiliates) as of Dec. 31, 2022, are exempt, if other requirements of Regulation Z also are met, from establishing escrow accounts for higher-priced mortgage loans in 2023.
  • These adjustments are based on the 8.6 percent increase in the average of the CPI-W for the 12-month period ending in November 2022.
  • The adjustment to the escrows asset-size exemption threshold also will increase the threshold for small-creditor portfolio and balloon-payment qualified mortgages under Regulation Z.