Frequently Asked Questions: Mortgage Lenders and Brokers
Do I need a regulated loan license from the OCCC?
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Mortgage Brokers: Yes, if you broker junior lien transactions with effective rates greater than 10%. (The Texas Department of Savings and Mortgage Lending licenses brokers of first lien transactions)
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Mortgage Lenders: Yes, if you make home equity loans (unless made with unsupervised HUD-approved lenders) or engage in junior lien transactions.
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Mortgage Servicers: Yes, if you are servicing secondary mortgages or first lien home equity loans.
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Second Mortgage Lenders: Yes.
Does Chapter 342 licensure exempt mortgage bankers from the requirement to register with Texas Savings and Loan?
The Mortgage Banker Registration Act (MBRA), passed by the 78th Legislature as SB252, requires all mortgage bankers, unless specifically exempt, to register with the Texas Department of Savings and Mortgage Lending. An initial review of the legislation indicates that, unless the Finance Commission of Texas adopts a rule under subsection 157.004(4)(C), there would not be an exemption for holders of OCCC Chapter 342 licenses. For more information, please contact the Texas Department of Savings and Mortgage Lending at 877.276.5550 or 512.475.1350.
What documents might I find helpful?
- Required Disclosures: Texas statute requires that lenders provide certain written disclosures to borrowers of home equity and high cost loans.
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Home Equity Commentary: In 1997, the Texas legislature passed a constitutional amendment allowing for home equity loans. In response to this new type of loan, a group of Texas state agencies got together and developed the Home Equity Commentary. This document expresses the enforcement positions adopted by the Office of Consumer Credit Commissioner, Department of Banking, Savings and Loan Department, and the Credit Union Department.
Updated: In response to the constitutional amendment allowing home equity lines of credit (voted in by Texans on September 13, 2003), the OCCC worked with the other Finance Commission agencies (Department of Banking and Savings & Loan Department) and with the Credit Union Commission to develop additional administrative interpretations.
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Article 16, Section 50: This 1997 amendment to the Texas Constitution established home equity regulations. Section 50 was further amended in September 2003 to allow for home equity-based lines of credit.
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Chapter 342.G of Texas Finance Code: This chapter sets forth the regulations concerning interest and other charges on secondary mortgages and home improvement loans.
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Home Equity Modification Interpretation Letter: This letter was issued jointly by the Finance Commission of Texas agencies in response to a request for interpretation.
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Development of Home Equity Lending: The OCCC's governing board, the Finance Commission of Texas, provides this account of regulatory issues that arose within the first two years of home equity lending.
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House Joint Resolution 31 proposes a constitutional amendment permitting an encumbrance against homestead property for certain extensions of equity credit. On this site is the text of HJR 31; you can also link to the Full History and Versions on Texas Legislature Online.
Does the OCCC provide consumer-oriented mortgage loan resources?
In keeping with the OCCC's consumer focus, we have compiled a list of home equity loan and reverse mortgage resources especially for consumers. See the Services for Consumers section of this site.
