(a) Purpose. The purpose of this section is to clarify
and establish requirements related to a wrap borrower's right to make
deductions from the amounts the wrap borrower owes to the wrap lender
under the terms of a wrap mortgage loan, as provided by Finance Code §159.202.
(b) Notice of Deduction. To the extent the wrap borrower
seeks to exercise its right to deduct amounts owed to the wrap lender
pursuant to Finance Code §159.202, the wrap borrower must, at
the time the wrap borrower makes the deduction, provide the wrap lender
or its third-party servicer notice of the amounts deducted including:
(1) an itemized list of the deductions made, describing
in detail the amounts paid by the wrap borrower on behalf of the wrap
lender;
(2) the dates on which such payments were made; and
(3) supporting documentation evidencing paragraphs
(1) and (2) of this subsection.
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