Amendments to Various Texas State Regulations
by: Nicole Legere
The state of Texas has recently made a number of amendments to state regulations ranging from those involving judicial foreclosure proceedings to spousal maintenance agreements. All of these amendments will become effective on September 1, 2013.
Expedited Judicial Proceedings
Texas amended its Civil Practice and Remedies Code by adding Section 154.028 which allows the court, after the filing of a response to an application for an expedited foreclosure proceeding, to conduct a mediation hearing. This hearing is used to determine whether to order mediation, and the court cannot order mediation until such a hearing is conducted. The court must consider any objections to mediation, and if ordered, mediation must be conducted before the deadline set forth in the Texas Rules of Civil Procedure. If the parties are unable to select a mediator, one may be appointed by the court and the mediator’s fee split equally between the parties.
If the parties agree, then the mediation process may be waived. Mediation cannot be ordered if a response to the initial application for mediation has not been filed before the deadline set forth in the Texas Rules of Civil Procedure. If a respondent fails to attend a mediation hearing, after being given notice, the court may not order mediation. The court shall grant or deny the petitioner’s motion for default. Lastly, if mediation is ordered then it must be conducted no later than the 29th day after the petitioner filed a motion for default.
Another amendment added Section 14.109, which addresses the use of the nationwide mortgage licensing system (NMLS) and registry. Under this section, the commissioner may use the registry to obtain information required for licensing and registration purposes. This specifically includes criminal history information from the Federal Bureau of Investigation, U.S. Department of Justice, or other agencies. The commissioner may also obtain information related to any administrative, civil, or criminal findings by a governmental jurisdiction.
Texas also added an amendment intended to specifically address administrative fees charged in connection with loan contracts. This amendment clarifies that “an administrative fee is not interest.” The addition of subsection (g) to section 342.201 of the Finance Code now allows an administrative fee in excess of the authorized amount to be charged. The authorized amount stated in subsection (f), does not allow the administrative fee to exceed $25 for a loan of more than $1,000 or $20 for a loan of $1,000 or less. However, under the new amendment a “reasonable maximum amount of an administrative fee” may be charged.
An additional amendment allows for alternative interest charging computation methods including using the true daily earnings method or the scheduled installment earnings method. As long as it does not exceed the equivalent rate or the effective return rate of the installment account handling charge for the original scheduled term of the loan. However, the principle balance of the loan under this section may not include the acquisition charge, installment account handling charge, default charges, deferment charges, or return check fees.
Lastly, the addition of subsection (d) to section 342.002 states that interest under the scheduled installment earnings method or true daily earnings method may not be compounded.
A final amendment provides that, in cases of contempt, the court may enforce an agreement for periodic payments of spousal maintenance. The agreement must be voluntarily entered into by the parties and agreed to by the court. However, the court may not enforce any agreement that exceeds the amount of periodic support the court could have ordered under Subchapter B of Chapter 8 of the Family Code.
Additionally, the court may order the withholding of disposable income from the obligor if there is an agreement for periodic payments of spousal maintenance. The agreement must be voluntarily entered into between the parties and approved by the court. The amount of income withheld may not exceed the periodic support the court could have ordered, and the period of maintenance cannot outlast the period the court could have ordered.
Lastly, a party affected by a division of property agreement incident to a divorce or annulment may request enforcement of that decree by filing a court suit. The amendment now specifically includes the division of property and any other contractual provisions. The court which renders the divorce or annulment retains the power to enforce property distribution and other contractual provisions under the terms of the divorce/annulment agreement.
About the Author:
Nicole Legere, Esq. is Assistant Vice President and Senior Counsel at Bankers Advisory, Inc. She is a graduate of University of Massachusetts at Amherst and earned her Juris Doctor at Roger Williams School of Law. Nicole is admitted to the Bar in Massachusetts and New York. She can be reached at nicole@bankersadvisory.com
Anna DeSimone founded Bankers Advisory in 1986 and is a nationally recognized authority in residential mortgage lending. She has received numerous industry awards and has authored more than 40 best practices guides and hundreds of articles.
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