The required language is in the bill and because it is being implemented by adding it to section 343 of the Finance Code it applies to Individual borrowers - loan for personal, household purpose - secured by Primary Residence that is a 1-4

See prior post for discussion
http://www.bankersonline.com/forum/ubbth...ge=1#Post756665

Thanks K

Required Disclosure –9/1/07
NOTICE OF PENALTIES FOR MAKING FALSE OR MISLEADING STATEMENT
Effective September 1, 2007 and pursuant to Section 1. Subchapter B, Chapter 343, Section 343.105 of the Texas Finance Code, each mortgage lender, mortgage banker or licensed mortgagebroker/loan officer shall provide to each applicant for a home loan this written notice at closing for full verification and execution by each loan applicant.
��WARNING:
��Intentionally or knowingly making a materially false or misleading statement to obtain property or credit, including a mortgage loan, is a violation of Section 32.32, of the Texas Penal Code, and, depending on the amount of the loan or value of the property, is punishable by imprisonment for a term of 2 years to 99 years and a fine not to exceed $10,000.00.
��If you are aware of or suspect any false or incorrect information used in connection with this loan, and do not report it immediately to the following agency, you could be held responsible and/or accountable by law:
��Texas Department of Savings and Mortgage Lending
��2601 North Lamar Blvd., Ste. 201
��Austin, Texas 78705
��Toll Free Consumer Hotline: (877) 276-5550
��Main Number: (512) 475-1350
��Email: sml.state.tx.usWebsite: http://www.sml.state.tx.us)
��I/we, the undersigned home loan applicant(s), represent that I/we have received, read, and understand this notice of penalties for making a materially false or misleading written statement toobtain a home loan.
��I/we represent that all statements and representations containedin my/our written home loan application, including statements or representations regarding my/our identity, employment, annual income, and intent to occupy the residential real property secured by the home loan, are true and correct as of the date ofloan closing.
��__________________________________________________________________
��ApplicantDate
��__________________________________________________________________

Very interesting. Now only if there were a line for the REALTORs to sign I can't count how many I've come across that will :ahem: suggest what the applicant should put on their application because it's "no big deal and we want this to close"

Will you obtain the signed notice from borrowers that do not fill out or sign written applications? Not all of our home equity loan applicants will have signed a written application. The statute relates to false or misleading "written" statements. Any thoughts? Should we not get this signed if there is no written application, or should we modify the notice to include verbal representations in the representations???

I would not modify the notice. I would also implement a requirement for a signed written application. If there has been a false statement that brings law enforcement into the picture, you want to be able to pin it on the customer and not the loan officer.

Does this apply to all banks or just state savings banks?

Yes applies to all banks, just as all parts of the Finance Code apply (ie home equity / home improvement / mech & materilman / etc)

thanks for the quick response. Two other ??'s. Does this apply to lines of credit? and can anyone provide a link to 343.105? by googling i can get 343.104, but not 105. thanks again.

Dean

IMHO - -
You are right, when I look at the Finance Code online I can't find a subsection 105. I think there is just a delay in getting the revisions from the legislative session online.

The entire Chapter 343 does not apply to Reverse Mortgages or Lines of Credit, so the newly revised 343.105 would not apply to lines of credit.
http://tlo2.tlc.state.tx.us/statutes/docs/FI/content/htm/fi.004.00.000343.00.htm#343.002.00
see 343.02 on appliciability.

http://www.ibat.org/ch_2007_legislative_wrapup.asp
This is the white paper from IBAT about all items passed in the last legislative session.

Section 343.105 is not in the Finance Code yet. Also, is the above the final version as I'm seeing two variations in the language. One has the Tx Dept of Savings & Mortgage Lending information in it and the other does not. A law firm sent us their interpretation of the requirement for this section and included a suggested disclosure that does not have the Tx Dept.... language in it. Does anyone know?

From what I understand the Tx Dept of Banking has not given any specific direction / guidance, so I am using the wording that is in the statute (in the IBAT White Paper link)

But the Tx Dept of Saving & Mortg Lending has specified the notice with the additional language that is in the post above.