| Section 50(a)(6)(H).
(19) Subsequent Events. The two percent limitation
pertains to fees paid or contracted for by an owner or owner's spouse
at the inception or at the closing of an equity loan. On the date
the equity loan is closed an owner or an owner's spouse may agree
to perform certain promises during the term of the equity loan. Failure
to perform an obligation of an equity loan may trigger the assessment
of costs to the owner or owner's spouse. The assessment of costs is
a subsequent event triggered by the failure of the owner's or owner's
spouse to perform under the equity loan agreement and is not a fee
subject to the two percent limitation. Examples of subsequent event
costs include contractually permitted charges for force-placed homeowner's
insurance costs, returned check fees, debt collection costs, late
fees, and costs associated with foreclosure.
(20) Property Insurance Premiums. Premiums an owner
or an owner's spouse is required to pay to purchase homeowner's insurance
coverage are not fees subject to the two percent limitation. Examples
of property insurance premiums include fire and extended coverage
insurance and flood insurance. Failure to maintain this insurance
is generally a default provision of the equity loan agreement and
not a condition of the extension of credit. The lender may collect
and escrow premiums for this insurance and include the premium in
the periodic payment amount or principal amount. If the lender sells
insurance to the owner, the lender must comply with applicable law
concerning the sale of insurance in connection with a mortgage loan.
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| Source Note: The provisions of this §153.5 adopted to be effective January 8, 2004, 29 TexReg 84; amended to be effective January 1, 2015, 39 TexReg 10407; amended to be effective November 24, 2016, 41 TexReg 9106; amended to be effective March 29, 2018, 43 TexReg 1839; amended to be effective January 6, 2022, 46 TexReg 9240 |
