This will be my last post about a suite of legislation regulating wrap mortgages in Texas—unless any of them become law. Of the four bills in this suite, SB 1995 may be the most level-headed of the four laws. Senator Zaffirini’s press release describes it thus:
SB 1995 (Watson) strengthens the disclosure requirements that apply to wrap loans. A current provision in the Property Code already requires lenders to disclose preexisting liens, but this provision lacks a meaningful enforcement provision and contains confusing insurance information. SB 1995 would fix these problems by improving the insurance warning and adding enforcement provisions in the form of a tolling provision and a Class A misdemeanor. SB 1995 would also require the disclosure to be provided in a language other than English if the wrap loan was primarily negotiated in another language.
What will I do if all four of the proposed mortgage wrap laws are passed? Move my money more into multi-family properties, because it will be harder to provide quality affordable housing in the single-family market, and it’s less work.
You can find the text of the introduced legislation here.
So what’s the Big Surprise?
I fully support this bill. It will go a long way to eliminating the abuses that sparked all four bills without damaging my ability to help people.
I encourage you to read the bill and contact your representatives to support or oppose the bill as you see fit.
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