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Financial Services Law Insights and Observations

Texas Governor Signs Residential Mortgage Loan Servicer Registration Act Into Law

State Issues

On June 17, Texas Governor Rick Perry signed into law S.B. 17, the Residential Mortgage Loan Servicer Registration Act, which requires all residential mortgage loan servicers in Texas to register with the Commissioner of the Texas Department of Savings and Mortgage Lending (Commissioner). The registration requirement applies to both companies acting purely in a servicing capacity, as well as mortgage bankers acting as residential mortgage loan servicers. In addition to setting forth registration requirements, the law allows the Commissioner to investigate consumer complaints against registrants, impose an investigation fee to cover costs incurred in any such investigation, and order a non-compliant registrant to cease and desist and/or pay a consumer for damages. Additionally, no later than 30 days after commencing the servicing of a loan, registrants are required to provide borrowers with a specific notice that sets forth the Texas Department of Savings and Mortgage Lending’s contact information for reference in registering complaints. S.B. 17 takes effect on September 1, 2011.