| (a) Required elements. A disclosure statement under
Texas Tax Code, §32.06(a-4)(1) to be provided to a property owner
before the execution of a tax lien transfer must contain the following
required elements:
(1) the title "Property Tax Loan Pre-Closing Disclosure"
at the top of each page;
(2) the property owner's name and the address of the
property;
(3) the property tax lender's name, principal business
address, and OCCC license number;
(4) for a residential property loan, the name and NMLS
unique identifier of the individual residential mortgage loan originator;
(5) the closing date;
(6) a section labeled "Loan Terms" containing the following:
(A) the funds advanced under Texas Tax Code, §32.06(e),
which are limited to the taxes, penalties, interest, and collection
costs paid as shown on the tax receipt, expenses paid to record the
lien, reasonable closing costs, and any amount to pay off an existing
property tax loan in the case of a refinance, and may not include
any prepaid interest, labeled "Loan Amount (funds advanced on your
behalf)";
(B) the contract interest rate described on the promissory
note or loan agreement, labeled "Interest Rate (loan contract rate)";
(C) the term of the property tax loan in months, labeled
"Loan Term";
(D) the monthly payment amount, labeled "Monthly Payment";
(E) the number, amounts, and timing of payments scheduled
to repay the property tax loan, labeled "Payment Schedule"; and
(F) one of the following statements, labeled "Prepayment":
(i) for any residential property tax loan, or for a
commercial property tax loan that does not have a prepayment penalty,
the following statement: "You can pay off the loan at any time without
a penalty."
(ii) for a commercial property tax loan that has a
prepayment penalty, an explanation of the amount of the prepayment
penalty such as: "If you prepay the loan within two years, you will
pay a prepayment penalty as high as $________.";
(7) for a residential property tax loan, a section
labeled "Loan Calculations" containing the following:
(A) the annual percentage rate, labeled "APR (cost
of loan as a yearly rate)";
(B) the amount financed, labeled "Amount Financed (amount
of loan used for APR)";
(C) the finance charge, labeled "Finance Charge (loan
cost used for APR)"; and
(D) the total of payments, labeled "Total of Payments";
(8) a section labeled "Loan Amount Itemization" containing
the following:
(A) a subsection labeled "Amounts paid to taxing units"
listing:
(i) the total amount that the property tax lender will
pay to taxing units or governmental entities for unpaid taxes, penalties,
interest, and collection costs as shown on the tax receipt;
(ii) the name of each taxing unit or governmental entity
to which the property tax lender will disburse an amount shown on
the tax receipt; and
(iii) the amount to be disbursed to each taxing unit
or governmental entity;
(B) a subsection labeled "Closing costs" listing:
(i) the total amount of closing costs;
(ii) the total amount of closing costs paid to or retained
by the property tax lender, labeled "Costs to lender"; and
(iii) for each portion of the closing costs paid to
a third party, a description of the cost, the name of the third party,
and the amount of the cost;
(C) a subsection labeled "Recording costs" listing:
(i) the total amount of expenses to record the lien
or liens;
(ii) the name of each governmental unit to which the
property tax lender will pay an expense to record a lien; and
(iii) the amount to be paid to each governmental unit
for recording expenses;
(D) in the case of a refinance of an existing property
tax loan, a subsection labeled "Refinance of current property tax
loan" listing:
(i) the total of amounts to pay off any existing property
tax loan or loans;
(ii) the name of each property tax lender to which
an amount will be paid to pay off an existing property tax loan; and
(iii) the amount to be paid to each property tax lender
to pay off an existing property tax loan;
(9) for any property tax loan in which the lender will
charge prepaid interest, including per diem interest or discount points,
a section labeled "Prepaid Interest" containing the following:
(A) the total amount of prepaid interest that the property
tax lender will charge, expressed as a dollar amount, labeled "Total
prepaid interest (not included in loan amount)";
(B) if the property tax lender will charge per diem
interest, the total amount of per diem interest expressed as a dollar
amount, with a statement of the per diem interest rate and number
of days, labeled "Per diem interest (___% per day, ____ days)";
(C) if the property tax lender will charge discount
points, the total amount of discount points expressed as a dollar
amount, labeled "Discount points";
(10) the following notice in boldface type, labeled
"Tax Office Notice": "Your tax office may offer delinquent tax installment
plans that may be less costly to you. You can request information
about the availability of these plans from the tax office."
(11) a statement that the property owner currently
has a lien against the owner's property for unpaid property taxes;
(12) a statement that the property owner can pay the
taxing unit(s) directly;
(13) a statement that the property owner may authorize
that the lien of the taxing unit(s) be transferred to the property
tax lender;
(14) a statement that unless the property owner agrees
in writing, the property tax lender may not make the property tax
loan;
(15) a statement that the property tax loan may include
unpaid property taxes, penalties, interest, and collection costs paid
as shown on the tax receipt;
(16) a statement that the property tax lender may also
assess closing costs and interest not to exceed 18% per year;
(17) a statement that the property tax loan is superior
to any other preexisting lien on the property;
(18) a statement that if the property is a homestead,
disabled persons are entitled to tax deferral under Texas Tax Code,
§33.06;
(19) a statement that there may be alternatives available
to the property owner instead of the property tax loan, (e.g., entering
into a payment installment agreement with the taxing unit(s), financing
options through an existing mortgage lender or other private lenders,
borrowing from savings or family members);
(20) a statement that if the property owner does not
pay, the property owner may lose the property;
(21) a statement that the tax lien may be considered
a default by any mortgage holder with a lien on the same property,
and the only way to correct the default is to pay off the taxes and
have the lien released;
(22) a statement that any secured loan may be foreclosed
if the loan is in default, and the cost of a foreclosure, either tax
lien or mortgage, may be added to the amount owed by the property
owner;
(23) the following statement: "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). If this does
not resolve your question or complaint, you can contact the OCCC:"
and the OCCC's address, consumer helpline, website, and consumer complaint
email address as follows: 2601 N. Lamar Blvd., Austin, TX 78705, (800)
538-1579, occc.texas.gov, consumer.complaints@occc.texas.gov;
(24) a statement that the property owner may seek the
advice of an attorney or another third party before signing a property
tax loan; and
(25) a statement that the property owner should ask
about the terms of any loan and should read any document before signing
it.
(b) Page requirement. The disclosure statement must
fit on one standard-size sheet of paper (8 1/2 by 11 inches) printed
on both sides, or on two standard sheets of paper printed only on
the front sides of each page. A property tax lender may attach additional
pages if necessary to disclose additional taxing units, additional
third parties receiving closing costs, additional governmental units
receiving recording expenses, or additional information regarding
amounts to pay off one or more existing property tax loans. The disclosure
statement must be delivered in a manner that does not minimize its
significance.
(c) Accuracy. All information and amounts on the disclosure
statement must be accurate and must correctly reflect the terms of
the property tax loan at closing.
(1) Annual percentage rate. For a residential property
tax loan, the annual percentage rate will be considered accurate if
it is not more than 1/8 of 1 percentage point above or below the annual
percentage rate determined in accordance with §89.502(2) of this
title (relating to Definitions).
(2) Dollar amounts. For purposes of this subsection,
a dollar amount on the disclosure will be considered accurate if it
is not more than $10 above or below the actual amount charged under
the terms of the property tax loan.
(3) Amended disclosure statement. At any time after
delivering the disclosure statement, if the property tax lender learns
that any information on the disclosure statement was inaccurate or
did not correctly reflect the terms of the loan at closing, then the
property tax lender must notify the property owner of the inaccuracy,
and must send an amended, accurate disclosure statement to the property
owner in a manner described by subsection (d) of this section. The
amended disclosure statement must list the date on which it was revised.
(A) General timing requirement. The property tax lender
must provide any amended disclosure statement to the property owner
before the property owner executes any promissory note, loan agreement,
deed of trust, contract, security deed, or other security instrument.
(B) Prompt disclosure for certain increased amounts.
In addition to complying with subparagraph (A) of this paragraph,
the property tax lender must provide the amended disclosure to the
property owner promptly after discovering the inaccuracy if the inaccuracy
results in:
(i) an increase of more than $10 to the total of payments,
the closing costs, or the amount of any periodic payment, compared
to the amount originally disclosed to the property owner; or
(ii) an increase of more than 1/8 of 1 percentage point
to the annual percentage rate, compared to the amount originally disclosed
to the property owner for a residential property tax loan.
(d) Delivery.
(1) Face-to-face interview before closing. In the case
of a face-to-face interview, a property tax lender must provide a
disclosure statement containing all of the elements outlined by subsection
(a) of this section to the property owner at the time of the interview.
A property owner present at the interview may sign an acknowledgment
verifying receipt of the disclosure statement at that time.
(2) No face-to-face interview. If there is no face-to-face
interview, a licensee must deliver a disclosure statement containing
all of the elements outlined by subsection (a) of this section to
the owner of the property.
(A) Method of delivery. The disclosure statement may
be delivered by U.S. mail, with prepaid first-class postage, or via
facsimile or email if the property owner consents. Alternatively,
licensees may deliver the disclosure statement by certified mail with
return receipt requested, by using a commercial delivery service with
tracking abilities, or by using a courier service.
(B) Timing of delivery. The disclosure statement must
be delivered within three business days from receipt of the property
owner's application for a property tax loan, or within three business
days from the date that the property tax lender first has knowledge
of the property owner's agreement to enter into a property tax loan
with the property tax lender.
(C) Co-applicants. If property owners who are co-applicants
provide the same mailing address, one copy delivered to that address
is sufficient. If different addresses are shown by co-applicants,
a copy must be delivered to each of the co-applicants.
(e) Verification of delivery.
(1) At time of face-to-face interview before closing.
At the time of a face-to-face interview, verification that a disclosure
was provided under this section is not required, but may be established
by a signed and dated acknowledgment of the property owner obtained
at the time of the interview.
(2) No face-to-face interview. If there is no face-to-face
interview, the property tax lender must deliver the disclosure statement
to the property owner as prescribed in subsection (d)(2) of this section.
(A) Verification of delivery by mail. The property
tax lender must allow a reasonable period of time for delivery by
mail. A period of three calendar days, not including Sundays and federal
legal public holidays, constitutes a rebuttable presumption for sufficient
mailing and delivery.
Cont'd... |
