Texas Amends Provisions Regarding Licensing Exemptions
By Matthew Dailey, J.D.
The state of Texas amended its provisions relating to exemptions from the applicability of the state Secure and Fair Enforcement for Mortgage Licensing Act of 2009. These provisions are effective on September 1, 2015.
IRS Designated 501(c)(3) EntitiesSenate Bill 1203 was enacted by the legislature to deal with Section 156.202 of the Finance Code. The regulation now states that any entity designated as a 501(c)(3) by the IRS and originates residential mortgages for borrowers through self-help program is exempt from this chapter. The entity must provide at least 200 labor hours or 65% of the labor to build the dwelling securing said loan.
Licensing Exemptions
Similarly, Section 157.0121 now reads that employees of those exempt organizations are also free from the licensing and other requirements of the chapter relative to loan originators. For this to be the case however, those employees must be acting for the benefit of those entities.
Zero Interest Self-Help Housing
Lastly, Senate Bill 1203 removed Section 180.003(a)(5) from the Finance Code. The effect of this being that any nonprofit organization which provides 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 is not exempt from the Act.
Matthew Dailey, J.D. is Regulatory Compliance Consultant at Bankers Advisory. He is a graduate of Stonehill College and earned his Juris Doctor at the New England School of Law. Mathew is admitted to the Bar in Massachusetts. He can be reached at Matthew@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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