Texas Register, Volume 32, Number 44, Pages 7777-8060, November 2, 2007 Page: 7,803
7777-8060 p. ; 28 cm.View a full description of this periodical.
Extracted Text
The following text was automatically extracted from the image on this page using optical character recognition software:
1520 (SB 1520), as enacted by the 80th Texas Legislature. The
individual purposes of each rule are provided below.
Section 89.501 outlines the purpose of Subchapter E, which is
to provide disclosures for property tax loan transactions.
Section 89.502 provides definitions to be used in Subchapter E,
including the incorporation of definitions contained in the Texas
Finance Code and the Texas Tax Code.
Section 89.503 prescribes the general format of the disclosures
contained in Subchapter E, including readable typefaces and
point sizes.
Section 89.504 outlines the requirements for the disclosure
statement provided to a property owner under Texas Tax Code,
32.06(a-4)(1). Subsection (a) describes the required elements
that must be included in the disclosure statement.
It was suggested that the element contained in 89.504(a)(5)
read as follows: "a statement that the property tax loan is supe-
rior to any other preexisting lien on the property, except a preex-
isting property tax loan." The agency recognizes that a preexist-
ing property tax loan could certainly exist and would have equal
superiority to a property tax loan currently being entered into by
the property owner. The agency chose not to include this techni-
cal exception in order to align with the plain language approach
of the disclosure statement. The agency believes that most own-
ers will not have an existing tax lien on the same property when
they are reviewing the disclosure. Additionally, there are certain
concepts which are not completely explained in order for the dis-
closure to fit on a single page. The current language focuses on
the property tax loan before the owner and its relation to any ex-
isting mortgage.
Subsection (b) of 89.504 requires that the disclosure statement
fit on one standard-size sheet of paper. Subsection (c) details
how the disclosure statement must be delivered, and subsection
(d) explains how that delivery must be verified. Subsection (d)
also includes provisions for married property owners and prop-
erty owned by a legal entity.
The issue was raised that 89.504(c) be revised to allow an
exception where the mailed delivery prior to closing could be
waived for good cause, which would include situations of immi-
nent foreclosure or imposition of additional penalties on the prop-
erty owner. The agency believes that the delivery provision as
proposed would provide the majority of property owners a copy
of the disclosure statement in a timely manner before closing,
thus allowing the property owner to absorb the information and
make an informed decision. While disallowing the suggested
exception may delay certain property owners from obtaining a
property tax loan at the most beneficial time, the agency believes
that the greater interest of the majority of property owners would
best be served through timely delivery prior to closing. But in
the interest of obtaining more complete information, the agency
invites comments on the issue of the delivery timing of the dis-
closure statement.
Section 89.505 outlines the requirements for the notice of delin-
quency sent by the mortgage servicer or the holder of the first lien
to the transferee of a tax lien under Texas Tax Code, 32.06(f-1).
Subsection (a) lists the required elements that must be included
in the notice of delinquency. Subsection (b) outlines the deliv-
ery requirements, and subsection (c) describes how that deliv-
ery must be verified.Section 89.506 provides the required disclosure statement under
Texas Tax Code, 32.06(a-4)(1), and a sample model notice of
delinquency under Texas Tax Code, 32.06(f-1).
Section 89.507 describes the permissible changes that may be
made to each of the disclosures. The disclosure statement is
a strict, prescribed form that may only be changed according to
the exclusive list outlined in 89.507(a). In contrast, the notice
of delinquency form is simply a model disclosure that may ex-
perience several modifications, as outlined in 89.507(b), which
offers flexibility to the provider of the notice. The different ap-
proaches utilized for the two disclosures echo the statute, as the
disclosure statement is mandated by the statute, whereas the
notice of delinquency is optional.
Leslie L. Pettijohn, Consumer Credit Commissioner, has deter-
mined that for the first five-year period the rules are in effect there
will be no fiscal implications for state or local government as a
result of administering the rules.
Commissioner Pettijohn has also determined that for each year
of the first five years the rules are in effect the public benefit
anticipated as a result of the new rules will be consistency and
clarity in the disclosures provided, benefiting both lenders and
consumers alike. An additional public benefit of the proposed
rules is enhanced compliance with the credit laws.
Additional economic costs may be incurred by a person required
to comply with this proposal. For those who will be required
to comply, the anticipated costs related to disclosures would in-
clude the costs associated with copying and delivering the disclo-
sure forms, and costs attributable to the loss of obsolete forms
inventory. Additional copy costs are estimated to be approxi-
mately $0.10 - $0.20 per new form. The additional cost of deliv-
ery is estimated to be the cost of first-class U.S. postage, which
is currently $0.41 per mailed disclosure form.
Some licensees who use or lease specialized computer software
programs for their loan business may experience some addi-
tional costs. These costs are impossible to predict. The agency
has attempted to lessen these costs by providing the software
programmers with the text of the forms. Whether programmers
will use the proposed forms or create their own utilizing the per-
missible changes is not predictable. Whether the programmers
will charge an additional fee for a document they do not have to
draft is also not predictable.
The agency is not aware of any adverse economic effect on small
businesses as compared to the effect on large businesses result-
ing from this proposal. But in order to obtain more complete in-
formation concerning the economic effect of these new rules, the
agency invites comments from interested stakeholders and the
public on any economic impact on small businesses, as well as
any alternative methods of achieving the purpose of these pro-
posed rules should that effect be adverse to small businesses.
Comments on the proposed new rules may be submitted
in writing to Laurie Hobbs, Assistant General Counsel, Of-
fice of Consumer Credit Commissioner, 2601 North Lamar
Boulevard, Austin, Texas 78705-4207 or by e-mail to lau-
rie.hobbs@occc.state.tx.us. To be considered, a written
comment must be received on or before the 31st day after
the date the proposed new rules are published in the Texas
Register. At the conclusion of the 31 st day after the proposed
new rules are published in the Texas Register, no further written
comments will be considered or accepted by the commission.PROPOSED RULES November 2, 2007 32 TexReg 7803
Upcoming Pages
Here’s what’s next.
Search Inside
This issue can be searched. Note: Results may vary based on the legibility of text within the document.
Tools / Downloads
Get a copy of this page or view the extracted text.
Citing and Sharing
Basic information for referencing this web page. We also provide extended guidance on usage rights, references, copying or embedding.
Reference the current page of this Periodical.
Texas. Secretary of State. Texas Register, Volume 32, Number 44, Pages 7777-8060, November 2, 2007, periodical, November 2, 2007; Austin, Texas. (https://texashistory.unt.edu/ark:/67531/metapth97421/m1/25/: accessed July 18, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting UNT Libraries Government Documents Department.