| (a) Precomputed secondary mortgage loans. In a precomputed
secondary mortgage loan, an authorized lender may contract for, charge,
or receive an amount of interest that does not exceed the applicable
simple interest rate authorized by Texas Finance Code, Chapter 303,
Subchapter A. Prepaid interest is not permitted unless expressly authorized
by statute (e.g., an administrative fee).
(b) Interest-bearing loans. In an interest-bearing
secondary mortgage loan, an authorized lender may contract for, charge,
or receive any rate of interest that does not exceed the applicable
amount authorized by Texas Finance Code, Chapter 303, Subchapter A,
as calculated under the true daily earnings method or the scheduled
installment earnings method. Prepaid interest in the form of points,
such as origination or discount points, may be contracted for, charged,
or received by an originating lender, so long as the total amount
of interest contracted for, charged, or received, when spread over
the full term of the loan as permitted by Texas Finance Code, §302.101
does not exceed the applicable interest limit in Texas Finance Code,
Chapter 303, Subchapter A.
(c) Method of calculation. An authorized lender making
loans under Texas Finance Code, §342.301(c) may calculate the
rate and amount of interest by any method of calculation, as long
as the amount of interest charged does not exceed the maximum rate
or amount of interest provided by Texas Finance Code, §342.301,
calculated using the specified earnings methods contained in Texas
Finance Code, §342.301.
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| Source Note: The provisions of this §83.701 adopted to be effective November 9, 2006, 31 TexReg 8994; amended to be effective November 4, 2010, 35 TexReg 9698; amended to be effective July 10, 2014, 39 TexReg 5142 |
