Texas Regulatory and North Carolina Legislative Update

Texas Regulatory and North Carolina Legislative Update

The Texas Finance Commission (the “Commission”) recently amended the Residential Mortgage Loan Originator rules governing mortgage loan originators applying for licenses from the Office of Consumer Credit Commissioner (“OCCC”) and promulgated a new rule concerning multiple advance loans.  Both rules are effective September 6, 2012.  The North Carolina legislature recently amended its laws governing the annual assessments of mortgage bankers, mortgage brokers, and mortgage servicers, as well as renewal fees.  The legislature also enacted legislation providing an alternative mortgage satisfaction form and an alternative trustee’s satisfaction of deed of trust and creditor’s release form.  Additionally laws governing broker price opinions and comparative market analyses were enacted, and there were legislative changes related to residential mortgage fraud.  Except as noted, all the North Carolina legislation is effective October 1, 2012.

 

TEXAS RULES

 

7 TAC § 2.104

 

 

The annual renewal fee for a residential mortgage loan originator will not exceed $300 for renewal applications filed with the OCCC.  Annual renewal fees are due to the Nationwide Mortgage Licensing System and Registry by December 31 of each year.

 

 

The Commission sets residential mortgage loan originator reinstatement fee at $50 for applications filed with the OCCC.  The reinstatement period for OCCC applicants runs from January 1 through the last day of February each year.

7 TAC § 83.838

 

“Multiple-advance loan” means a loan agreement subject to the Consumer Loans chapter of the Texas Finance Code, under which more than one loan or advance may be made to a borrower from time to time.

 

 

In connection with a multiple-advance loan, an authorized lender (a person who holds a license under the Consumer Loans chapter) must comply with the interest limitations, disclosure requirements, and other requirements provided in the Consumer Loans chapter of the Texas Finance Code for multiple-advance loans.

 

 

The following loans are not subject to the rules or the Consumer Loans chapter of the Texas Finance Code:

  • Loans in which all advances occur on the same date; and
  • Loans in which all advances after the initial advance occur because of the borrower’s default (e.g., collateral protection insurance fees, repossession fees, court costs).

 

NORTH CAROLINA SENATE BILL 806

 

 

Each licensed mortgage lender, mortgage broker, and mortgage servicer must pay the North Carolina Office of the Commissioner of Banks (“OCOB”) an assessment as provided below.  The annual assessment will consist of a base amount of $2,000 for volumes of no more than $1,500,000 plus an additional sum, calculated on the loan and servicing dollar volume reported by the licensee to the OCOB for the previous calendar year.  If a licensee has both loan and servicing volume, those amounts will be added together and the assessment must be calculated as follows:

 

Loan and/or Servicing Dollar Volume:   Per Thousand:

$1,500,001 to $2,500,000                               $0.07

$2,500,001 to $5,000,000                               $0.06

$5,000,001 to $10,000,000                             $0.05

$10,000,001 to $30,000,000                           $0.04

$30,000,001 to $100,000,000                         $0.03

$100,000,001 to $1,300,000,000                    $0.02

More than $1,300,000,001                              $0.01

 

 

The North Carolina Commissioner of Banks (the “Commissioner”) and the Commissioner’s designees may collect the assessment annually or in periodic installments as approved by the Banking Commission (the “Commission”).

 

 

The provision requiring licensed mortgage lenders, licensed mortgage brokers, and licensed mortgage servicers to pay an annual renewal fee of $625.00, licensed exclusive mortgage brokers to pay an annual renewal fee of $300.00, and licensed mortgage lenders and mortgage brokers to pay $300.00 for each licensed branch office has been deleted.

 

 

Any investigation or examination that, in the opinion of the Commissioner requires extraordinary review, investigation, or special examination must be subject to the actual costs of additional expenses and the hourly rate for the staff’s time, to be determined annually by the Commission.

 

 

NORTH CAROLINA HOUSE BILL 203

 

 

The following provisions will take effect on October 1, 2012:

 

 

A secured creditor who would like to indicate that the underlying obligation secured by the instrument has been extinguished may use the following form, which, when properly completed, is sufficient to satisfy the requirements of the standard satisfaction of security instrument form:

 

 

SATISFACTION OF SECURITY INSTRUMENT

(G.S. 45-36.10; G.S. 45-37(a)(7))

 

 

The undersigned is now the secured creditor in the security instrument identified as follows:

 

Type of Security Instrument: (identify type of security instrument, such as deed of trust or mortgage)

 

Original Grantor(s): (Identify original grantor(s), trustor(s), or mortgagor(s))

 

Original Secured Party(ies): (Identify the original beneficiary(ies), mortgagee(s), or secured party(ies) in the security instrument)

 

Recording Data: The security instrument is recorded in Book ____ at Page ____ or as document number ________ in the office of the Register of Deeds for ____________ County, North Carolina.

 

This satisfaction terminates the effectiveness of the security instrument and extinguishes the underlying obligation secured by the instrument.

 

Date: ______________           _____________________________

(Signature of secured creditor)

 

[Acknowledgment before officer authorized to take acknowledgments].

 

 

A trustee and secured creditor who would like to indicate that the underlying obligation secured by the deed of trust has been extinguished may use the following form, which, when properly completed, is sufficient to satisfy the requirements of a standard trustee’s satisfaction of deed of trust form:

 

TRUSTEE’S SATISFACTION OF DEED OF TRUST

AND

CREDITOR’S RELEASE

(G.S. 45-36.20; G.S. 45-37(a)(7))

The undersigned is now serving as the trustee or substitute trustee under the terms of the deed of trust identified as follows:

Original Grantor(s): (Identify original grantor(s) or trustor(s))

Original Secured Party(ies): (Identify the original beneficiary(ies) or secured party(ies) in the deed of trust)

 

Recording Data: The deed of trust is recorded in Book ____ at Page ____ or as document number ________ in the office of the Register of Deeds for __________ County, North Carolina.

This satisfaction terminates the effectiveness of the deed of trust.

Date:______________            _________________________________

(Signature of trustee or substitute trustee)

[Acknowledgment before officer authorized to take acknowledgments]

The obligation secured by the deed of trust has been extinguished.

Date:______________            _________________________________

(Signature of secured creditor)

 

[Acknowledgment before officer authorized to take acknowledgments].

 

The following provisions will take effect on December 1, 2012:

It is a Class I felony for any person to present for filing in a public record or a private record generally available to the public a false lien or encumbrance against the real or personal property of a public officer or public employee on account of the performance of the public officer or public employee’s official duties, knowing or having reason to know that the lien or encumbrance is false or contains a materially false, fictitious, or fraudulent statement or representation.

 

In the case of a lien or encumbrance presented to the register of deeds for filing, if the register of deeds has a reasonable suspicion that the lien or encumbrance is false, the register of deeds may refuse to file the lien or encumbrance.  Neither the register of deeds nor any other entity will be liable for filing or refusing to file such lien or encumbrance. If the filing of the lien or encumbrance is denied, the register of deeds can allow the filing of a Notice of Denied Lien or Encumbrance Filing on a form adopted by the Secretary of State.  The Notice of Denied Lien or Encumbrance Filing will not itself be considered a lien or encumbrance.  If the filing of the lien or encumbrance is denied, any interested person may file a special proceeding in the county where the filing was denied within 10 business days of the filing of the Notice of Denied Lien or Encumbrance Filing asking the court to find that the proposed filing has a statutory or contractual basis and to order that the document be filed.

 

 

If, after a hearing, upon a minimum of 5 days’ notice and opportunity to be heard to all interested persons and all persons claiming an ownership interest in the property, the court finds that there is a statutory or contractual basis for the proposed filing, the court must order the document to be filed.  A lien or encumbrance filed upon order of the court will have a priority interest as of the time of the filing of the Notice of Denied Lien or Encumbrance Filing.  If the court finds that there is no statutory or contractual basis for the proposed filing, the court must order that the proposed filing is null and void and that it must not be filed, indexed, or recorded, and a copy of that order must be filed by the register of deeds that originally denied the filing.  The review by the judge will not be deemed a finding as to any underlying claim of the parties involved.  If a special proceeding is not filed within 10 business days of the filing of the Notice of Denied Lien or Encumbrance Filing, the lien or encumbrance is considered null and void.

Upon being presented with an order issued by a North Carolina court declaring that a filed lien or encumbrance is false, and therefore null and void, the register of deeds that received the filing, in addition to filing the order, must conspicuously mark on the first page of the original record previously filed the following statement:

THE CLAIM ASSERTED IN THIS DOCUMENT IS FALSE AND IS NOT PROVIDED FOR BY THE GENERAL LAWS OF THIS STATE.

 

The above provisions do not apply to secured transaction filings under North Carolina’s Uniform Commercial Code or to statutory liens on real property.

In addition to any criminal penalties, a violation will constitute a violation of North Carolina’s consumer protection laws.

 

 

A person is guilty of residential mortgage fraud when, for financial gain and with the intent to defraud, that person knowingly files in a public record or a private record generally available to the public a document falsely claiming that a mortgage loan has been satisfied, discharged, released, revoked, or terminated or is invalid.

 

 

It is a Class I felony (previously a Class 2 misdemeanor) for any person, firm, corporation, or any other association of persons in North Carolina, under whatever name styled, to present a record for filing with knowledge that the record is not related to a valid security agreement or with the intention that the record be filed for an improper purpose, such as to hinder, harass, or otherwise wrongfully interfere with any person.

 

 

Any person who causes or attempts to cause a claim of lien on real property or other document to be filed, knowing that the filing is not authorized by statute, or with the intent that the filing is made for an improper purpose such as to hinder, harass, or otherwise wrongfully interfere with any person will be guilty of a Class I felony (previously a Class 1 misdemeanor).

NORTH CAROLINA SENATE BILL 521

 

“Broker price opinion” and “comparative market analysis” mean an estimate prepared by a licensed real estate broker that details the probable selling price or leasing price of a particular parcel of or interest in property and provides a varying level of detail about the property’s condition, market, and neighborhood, and information on comparable properties, but does not include an automated valuation model.

 

 

A licensee, other than a provisional broker, may prepare a broker price opinion or comparative market analysis and charge and collect a fee for the opinion if:

  • The license of that licensee is active and in good standing; and
  • The broker price opinion or comparative market analysis contains the required contents of a broker price opinion or comparative market analysis listed below.

 

The requirements above do not apply to any broker price opinion or comparative market analysis performed by a licensee for no fee or consideration.

A licensee may prepare a broker price opinion or comparative market analysis for any of the following:

·        An existing or potential seller of a parcel of real property;

·        An existing or potential buyer of a parcel of real property;

·        An existing or potential lessor of a parcel of or interest in real property;

·        An existing or potential lessee of a parcel of or interest in real property;

·        A third party making decisions or performing due diligence related to the potential listing, offering, sale, option, lease, or acquisition price of a parcel of or interest in real property; or

·        An existing or potential lienholder or other third party for any purpose other than as the basis to determine the value of a parcel of or interest in property, for a mortgage loan origination, including first and second mortgages, refinances, or equity lines of credit.

These provisions include the preparation of a broker price opinion or comparative market analysis to be used in conjunction with or in addition to an appraisal.

A broker price opinion or comparative market analysis must be in writing and conform to standards that may include, but are not limited to, the following:

·        A statement of the intended purpose of the broker price opinion or comparative market analysis;

·        A brief description of the subject property and property interest to be priced;

·        The basis of reasoning used to reach the conclusion of the price, including the applicable market data or capitalization computation;

·        Any assumptions or limiting conditions;

·        A disclosure of any existing or contemplated interest of the broker issuing the broker price opinion, including the possibility of representing the landlord/tenant or seller/buyer;

·        The effective date of the broker price opinion;

·        The name and signature of the broker issuing the broker price opinion and broker license number;

·        The name of the real estate brokerage firm for which the broker is acting;

·        The signature date;

·        A disclaimer stating that “This opinion is not an appraisal of the market value of the property, and may not be used in lieu of an appraisal.  If an appraisal is desired, the services of a licensed or certified appraiser shall be obtained.  This opinion may not be used by any party as the primary basis to determine the value of a parcel of or interest in real property for a mortgage loan origination, including first and second mortgages, refinances, or equity lines of credit.”; and

·        A copy of the assignment request for the broker price opinion or comparative market analysis.

If a broker price opinion is submitted electronically or on a form supplied by the requesting party, the signature of the broker issuing the broker price opinion may be an electronic signature.  The signature of the broker issuing the broker price opinion and the disclaimer provided above may be transmitted in a separate attachment if the electronic format or form supplied by the requesting party does not allow additional comments to be written by the licensee.  The electronic format or form supplied by the requesting party must refer to the existence of a separate attachment and state that the broker price opinion or comparative market analysis is not complete without the attachment.

A licensee may not knowingly prepare a broker price opinion or comparative market analysis for any purpose in lieu of an appraisal when an appraisal is required by federal or North Carolina law.  A broker price opinion or comparative market analysis that estimates the value of or worth of a parcel or interest in real estate rather than the sales or leasing price must be deemed to be an appraisal and may not be prepared by a licensed broker, but may only be prepared by a duly licensed or certified appraiser, and must meet the regulations adopted by the North Carolina Appraisal Board.  A broker price opinion or comparative market analysis must not under any circumstances be referred to as a valuation or appraisal.

A broker price opinion or comparative market analysis must not include the reporting of a predetermined result.

 

 

The provision stating that a real estate broker may perform a comparative market analysis for compensation or other valuable consideration only for prospective or actual brokerage clients or for real property involved in an employee relocation program has been deleted.

 

 

The above provisions do not apply to certified real estate appraisers who perform a broker price opinion or comparative market analysis as long as the appraiser is licensed as a real estate broker by the North Carolina Real Estate Commission and does not refer to himself or herself as an appraiser in the broker price opinion or comparative market analysis.

 

 

No appraiser may be disciplined for completing an appraisal that includes a reduced scope of work or reporting level as long as it is appropriate for the intended use and is performed in accordance with the Uniform Standards of Professional Appraisal Practice.