| (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.
Cont'd... |
