Texas Administrative Code › Title 7 - BANKING AND SECURITIES › Part 5 - OFFICE OF CONSUMER CREDIT COMMISSIONER › Chapter 89 - PROPERTY TAX LENDERS › Subchapter E - DISCLOSURES › Section 89.504 - Requirements for Disclosure Statement to Property Owner

Current through Reg. 49, No. 28; July 12, 2024
(a) Required elements. A disclosure statement
				  under Texas Tax Code, §
										RSA
				  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, §
												RSA
				  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, §
											RSA
				  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.