| (21) Savings clause. The savings model clause stating
that if any part of the contract is invalid, the rest remains valid
reads: "If any part of this loan agreement is declared invalid, the
rest of the loan agreement remains valid. If any part of this loan
agreement conflicts with any law, that law will control. The part
of the loan agreement that conflicts with any law will be modified
to comply with the law. The rest of the loan agreement remains valid."
(22) Prior agreements. For loan agreements exceeding
$50,000, this notice must be boldfaced, capitalized, underlined, or
otherwise set out from the surrounding written material to be conspicuous.
The model clause stating that there are no prior agreements between
the parties regarding the loan agreement reads: "This written loan
agreement is the final agreement between you and me. It may not be
changed by prior, current, or future oral agreements between you and
me. There are no oral agreements between you and me relating to this
loan agreement. Any change to this loan agreement must be in writing.
Both you and I have to sign written agreements."
(23) Application of law. The model clause specifying
that federal law and Texas law apply to the contract reads: "Federal
law and Texas law apply to this loan agreement."
(24) OCCC notice. Under §90.105 of this title
(relating to OCCC Notice), the following required notice must be given
by licensees to let consumers know how to file complaints: "For questions
or complaints about this loan, contact (insert name of lender) at
(insert lender's phone number and, at lender's option, one or more
of the following: mailing address, fax number, website, e-mail address).
The lender is licensed and examined under Texas law by the Office
of Consumer Credit Commissioner (OCCC), a state agency. If a complaint
or question cannot be resolved by contacting the lender, consumers
can contact the OCCC to file a complaint or ask a general credit-related
question. OCCC address: 2601 N. Lamar Blvd., Austin, Texas 78705.
Phone: (800) 538-1579. Fax: (512) 936-7610. Website: occc.texas.gov.
E-mail: consumer.complaints@occc.texas.gov."
(25) Collateral. The model clause regarding the collateral
reads: "The Property is subject to the Contract lien. I am responsible
for all obligations in this Note."
(26) Preservation of claims and defenses. In accordance
with the Federal Trade Commission's Holder in Due Course Rule, 16
C.F.R. §433.2, it is an unfair or deceptive act or practice to
take or receive a consumer credit contract in connection with the
sale or lease of goods or services to consumers that does not include
the following notice. The notice regarding the preservation of claims
and defenses reads: "NOTICE. ANY HOLDER OF THIS CONSUMER CREDIT CONTRACT
IS SUBJECT TO ALL CLAIMS AND DEFENSES WHICH THE DEBTOR COULD ASSERT
AGAINST THE SELLER OF GOODS OR SERVICES OBTAINED PURSUANT HERETO OR
WITH THE PROCEEDS HEREOF. RECOVERY HEREUNDER BY THE DEBTOR SHALL NOT
EXCEED AMOUNTS PAID BY THE DEBTOR HEREUNDER."
(27) Signature blocks. Documents for a home improvement
loan on a homestead must be signed at the office of the lender, an
attorney at law, or a title company. If this provision applies, the
model clause, "This document must be signed at the office of the Lender,
an attorney at law, or a title company" should appear above the signature
of the borrower. The licensee may also provide additional signature
lines for witness signatures. The model signature block reads:
Attached Graphic
(d) Model clauses for a Chapter 342, Subchapter G second
lien home improvement loan contract for use in a transaction that
allows for withdrawals or multiple advances.
(1) Identification. The model identification clause
listing the date and the account or contract number reads:
Attached Graphic
(2) Definitions. The model definitions section reads:
(A) "Owner" means (name of Owner), whose address is
(address of Owner, including county). If Owner and Maker are not the
same person, the word "Owner" includes Maker. "I" or "me" means the
Owner.
(B) "Contractor" means (name of Contractor), whose
address is (address of Contractor, including county) and includes
those to whom the Contractor has assigned or transferred Contractor's
rights and remedies. "You" or "your" means the Contractor.
(C) "Lender" means (name of Lender), whose address
is (address of Lender, including county) and includes those to whom
the Lender has assigned or transferred Lender's rights and remedies.
The Lender's NMLS ID is (NMLS ID of Lender). The loan originator's
name is (name of loan originator with primary responsibility for the
origination). The loan originator's NMLS ID is (NMLS ID of originator).
(D) "Trustee" means (name of Trustee), whose address
is (address of Trustee, including county).
(E) "Property" means the Property at (list address
of the Property), whose legal description is (list legal description
of the Property).
(F) "Work" means the construction project as agreed
to in writing between the Owner and Contractor.
(G) "Completion Date" means (date on which the Work
will be completed).
(H) "Contract" means this Texas Home Improvement Mechanic's
Lien Contract for Improvement, Power of Sale, and Deed of Trust.
(I) "Note" means the Texas Home Improvement Mechanic's
Lien Note signed by me and dated _________________________________
and includes all amounts secured by this Contract. The Note states
that the amount I owe you is _____________________________ dollars
(U.S. $___________________) plus interest.
(J) "Loan Agreement" means the Note, Contract, and
any other related document under which Lender has made a loan to me.
(K) "Applicable Law" means all controlling applicable
federal, state, and local law.
(L) "Tenant at Sufferance" means a person who continues
to possess the Property with no current right to possess it.
(M) "Forcible Detainer" means a lawsuit to remove a
person from the Property.
(N) "Periodic Payment" means the regularly scheduled
amount due for principal and interest under the Note plus any amount
under this Contract.
(O) "Successor in Interest" means any party that has
taken title to the Property.
(P) "Lien" means the Mechanic's and Materialman's Lien
on the Property that results from the Contract and the Work performed.
The Lien includes all existing and future improvements, easements,
and rights in the Property.
(3) Construction of improvements. The model clause
regarding construction of improvements reads: "You agree to furnish
and pay for all labor and material needed to complete the Work within
_____ days from the date of this Contract. The Work will be performed
on the Property in a good and workmanlike manner."
(4) Contract price. The model clause establishing the
contract price reads: "I agree to pay, or cause to be paid, to you,
or to your order, the sum of _______________ dollars (U.S. $_______________)
when the Work is completed."
(5) Note payable to lender. The model clause specifying
that the note is payable to the lender reads: "In exchange for money
from the Lender to you, I have signed a Note to the Lender in the
amount of __________________ dollars (U.S. $__________________)."
(6) Lien to secure note. The model clause regarding
security for the note reads: "To secure the amounts Lender provides
to you, and the interest payable to Lender, I give you, and you transfer
to Lender, the Lien. The Note is secured by a deed of trust, which
I will sign. The deed of trust will renew and extend the Lien created
by this Contract."
(7) Transfer of lien. The model clause regarding the
transfer of the lien reads: "You transfer to Lender all of your rights
and interests in this Contract."
(8) Exceptions to conveyance and warranty. Any exceptions
to conveyance and warranty should be specified in the contract. The
model clause regarding the exceptions to conveyance and warranty reads:
"The exceptions to conveyance and warranty are: (List any exceptions
to conveyance and warranty.)"
(9) Completion by contractor, but not lender. The model
clause specifying that the lender is not responsible for completing
the construction reads: "You will complete the Work by the Completion
Date. Lender is not responsible for completing the Work. Lender is
not a guarantor of your performance. You will indemnify and hold Lender
harmless against all claims related to the Work."
(10) Partial lien. The model clause regarding a partial
lien reads: "If you do not complete the Work by the Completion Date
in a good and workmanlike manner, then Lender will have a valid lien
for the contract price, less the amount reasonably necessary to complete
the Work. As an alternative, Lender may choose to complete the Work
and the lien will be valid for the contract price."
Cont'd... |
