92nd General Assembly
Summary of HB2227
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Short description: 
CIV PRO-MORTGAGE-JOB LOSS                                                  

Synopsis of Bill as introduced:
        Amends the Mortgage Foreclosure Article  of  the  Code  of  Civil      
   Procedure.  Provides that, if a mortgagor of a single family residence      
   experiences a temporary or permanent loss of employment because  of  a      
   layoff,  lockout,  or  strike  and the employment had been the primary      
   source of income of  the  mortgagor's  household,  the  mortgagor  may      
   notify  the  mortgagee  of  those facts, the mortgagee may require the      
   mortgagor to supply verification, and the mortgagor shall then  supply      
   verification.  Provides  that  the  mortgagee  not  then  initiate  or      
   proceed with an action to foreclose  on  the  mortgage  or  declare  a      
   default.  Provides  that the mortgagor shall make monthly interest and      
   escrow payments, and when the mortgagor again becomes employed or  one      
   year  has  elapsed  since  the  mortgagor  or  mortgagors began making      
   monthly interest and  escrow  payments,  the  mortgagor  shall  resume      
   regular  monthly  payments  of  principal and interest and shall remit      
   additional monthly sums in equal monthly  amounts  that  will  pay  in      
   full,  over a 6 month period, all principal that was unpaid during the      
   loss of employment.  Contains provisions concerning failure to comply,      
   court stays, and applicability.                                             
          FISCAL NOTE (Office of Banks and Real Estate)                        
          HB 2227 has no fiscal impact on the Office of Banks and Real         
          Estate. Financial entities (mortgagees) would lose compound          
          interest from delayed principal payments for up to an 18-month       
          period. The Office of Banks and Real Estate is unable to cal-        
          culate the fiscal impact on financial entities, because of un-       
          known variables.                                                     
          HOUSING AFFORDABIILITY NOTE                                          
          The proposed bill does not identify at what point in time the        
          borrower may/shall notify the lender of his/her loss of emplyo-      
          ment. As such, the financial impact on the lender cannot be          
          determined.  Both lenders and insurance companies will assume a      
          higher degree of risk in making mortgage loans under this            
          bill's provisions. To compensate for potentially higher losses,      
          lenders may likely charge higher interest rates and insurance        
          companies may establish higher premiums for mortgage insurance.      
          In both cases, these can only be assumed but cannot be predict-      
          ed or calculated with any degree of accuracy.                        
Last action on Bill: SESSION SINE DIE

   Last action date: JAN-07-2003

           Location: House

 Amendments to Bill: AMENDMENTS ADOPTED: HOUSE -   0     SENATE -   0


 Full Text  Bill Status