Texas Mortgage Laws
Texas mortgages are desired by number of buyers today especially by those
who want to buy, finance or refinance a home in the state of Texas. Such buyers
need to know quite a few facts about Texas mortgage.
- Texas Mortgage Bankers Association or TMBA - A voluntary trade association
is involved with various mortgage related activities in Texas state. More
than 700 corporate and individual members are there in TMBA.
- Foreign corporations have to obtain certificate of authority from Texas
Secretary of State for conducting business in the state of Texas.
- January 1, 2004 onwards non-exempt mortgage bankers have to register
with the Commissioner of the Texas Savings and Loan Department.
- Texas law permits home equity loans on a home. A 'cash out' refinancing
of a first lien is taken to be a home equity loan. The categories of lenders
qualified for making home equity loans are:
- a bank;
- a savings and loan association;
- a savings bank;
- a credit union;
- a person (i.e. entity) approved as a mortgagee by the United States Government
to make federally insured loans;
- a person (i.e. entity) licensed to make regulated loans, as provided by
statutes of this state; and
- a person regulated by Texas state as a mortgage broker.
- Under the Texas Government code it is taken to be the practice of law
to prepare a legal instrument affecting title to real property including mortgage
etc. and this may be prepared only by an attorney who is licensed in the State
of Texas. The Texas Insurance Code requires a lender to annually serve notice
with specific wording to a borrower with respect to potential cancellation of
private mortgage insurance. However, the state law will be preempted or superseded
if under federal law a lender is asked to provide a borrower with a written
notice that is essentially the same as this state legal notice.
- The foreclosure has to take place within four years of acceleration
of the maturity of the debt or four years after the date the final installment
becomes due - whichever first occurs.
- The top 5 types of mortgage lending/home loans institutions are:
- Banks,
- Credit Unions,
- Mortgage Bankers,
- Government Agencies and
- Private Sellers.
Each of these offer different sources of financing.
- Without holding an active broker license any person cannot act in the
capacity of or otherwise involve in the business of a mortgage broker in the
state of Texas under the Texas Finance Code.
- In 1996 the Texas Supplement Regarding Lawyers' Opinion Letters in Mortgage
Loan Transactions called the Texas Supplement was prepared by the Real Estate,
Probate and Trust Law Section's Committee on Lawyer's Opinion Letters in Mortgage
Loan Transactions. This was done for helping in simplifying the process Texas
mortgage loan transactions.
