85R25947 EES-F     By: Longoria H.B. No. 2656     Substitute the following for H.B. No. 2656:     By:  Stephenson C.S.H.B. No. 2656       A BILL TO BE ENTITLED   AN ACT   relating to the regulation of residential mortgage loan companies,   including the registration of mortgage lot lender companies;   authorizing a fee.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 156.002, Finance Code, is amended by   adding Subdivision (8-b) and amending Subdivisions (10-b) and (13)   to read as follows:                (8-b)  "Mortgage lot lender company" means a   corporation, company, partnership, or sole proprietorship that   engages in the business of residential mortgage loan origination on   residential real estate located in this state on which no dwelling   is constructed to purchasers of the residential real estate for all   or part of the purchase price of the residential real estate against   which the mortgage is secured.                 (10-b)  "Qualifying individual" means an individual   who is:                      (A)  except as provided by Section   156.2045(a)(3), licensed under Chapter 157 as a residential   mortgage loan originator; and                      (B)  designated by a residential mortgage loan   company as the company's representative.                (13)  "Residential mortgage loan company" means a   person, other than an individual, that engages in the business of   residential mortgage loan origination on residential real estate   located in this state. The term includes a credit union subsidiary   organization, auxiliary mortgage loan activity company, mortgage   company, independent contractor loan processor or underwriter   company, mortgage lot lender company, and financial services   company.          SECTION 2.  Section 156.201, Finance Code, is amended to   read as follows:          Sec. 156.201.  LICENSES REQUIRED. (a) A person may not act   in the capacity of, engage in the business of, or advertise or hold   that person out as engaging in or conducting the business of a   residential mortgage loan company in this state unless the person   holds an active residential mortgage loan company license, is   registered under Section 156.2012, is registered under Section   156.2045, or is exempt under Section 156.202.          (c)  Each residential mortgage loan company and the   company's qualifying individual are [licensed under Chapter 157 is]   responsible to the commissioner and members of the public for any   act or conduct performed by the residential mortgage loan   originator sponsored by or acting for the residential mortgage loan   company in connection with:                (1)  the origination of a residential mortgage loan; or                (2)  a transaction that is related to the origination   of a residential mortgage loan in which the qualifying individual   knew or should have known of the transaction.          SECTION 3.  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)  any owner of residential real estate who in any   12-consecutive-month period makes no more than five residential   mortgage loans to purchasers of the residential real estate   [property] for all or part of the purchase price of the residential   real estate against which the mortgage is secured; and                (4)  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 4.  Section 156.203, Finance Code, is amended by   adding Subsection (a-3) to read as follows:          (a-3)  An application for a mortgage lot lender company   registration under Section 156.2045 must be:                (1)  in writing;                (2)  under oath; and                (3)  on the form prescribed by the commissioner.          SECTION 5.  Subchapter C, Chapter 156, Finance Code, is   amended by adding Section 156.2045 to read as follows:          Sec. 156.2045.  QUALIFICATIONS AND REQUIREMENTS FOR   REGISTRATION: MORTGAGE LOT LENDER COMPANY. (a) To be registered as   a mortgage lot lender company, an applicant must:                (1)  submit a completed application together with the   payment of applicable fees through the Nationwide Mortgage   Licensing System and Registry;                (2)  designate control persons for the company through   the Nationwide Mortgage Licensing System and Registry;                (3)  designate an individual as the company's   qualifying individual who is either:                      (A)  an owner, officer, or partner of the company;   or                      (B)  a residential mortgage loan originator who is   licensed under Chapter 157;                 (4)  properly sponsor one or more residential mortgage   loan originators who are licensed under Chapter 157;                (5)  not be in violation of this chapter, a rule adopted   under this chapter, or any order previously issued by the   commissioner to the applicant;                (6)  have the company name or assumed name properly   filed with either the secretary of state or the appropriate county   clerk's office;                (7)  maintain a physical office in this state; and                (8)  provide any other information required by the   commissioner.          (b)  If the commissioner determines that a person has met the   requirements of Subsection (a), the commissioner shall issue a   registration to the person. The registration is valid for one year,   expires on December 31 of each year, and must be renewed annually by   meeting the requirements under Subsection (a) and paying a renewal   fee in an amount not to exceed $500. A person must renew an expired   registration in the manner determined by the commissioner.          (c)  A registered mortgage lot lender company is subject to   Subchapters D and E as if the company were licensed as a residential   mortgage loan company.          SECTION 6.  As soon as practicable after the effective date   of this Act, the Finance Commission of Texas shall adopt the rules   necessary to implement the changes in law made by this Act, and the   savings and mortgage lending commissioner shall begin registering   persons as mortgage lot lender companies as required by Section   156.2045, Finance Code, as added by this Act.          SECTION 7.  This Act takes effect September 1, 2017.