Senate Bill 247 – Changes to Property Tax Lending Law

The governor of Texas signed SB247 into law on May 29, 2013. The bill has several elements that are pro consumer and several that favor Big Banks, Tax Assessor and Law firms benefit from interest and penalties imposed when taxes are delinquent. An overview of the bill is as follows:

Advertising:

The bill requires Property Tax Lenders to disclose certain additional information if they promote a rate in an advertisement. For example, if the property tax lender discloses the number of payments, amount of any payment, or amount of any finance charge, then the lender must also disclose the terms of repayment and the annual percentage rate.

Secondary market:

The bill restricts a property tax lender from assigning, transferring, or selling a property Tax Loan to an entity or person not licensed under Chapter 351 of the Texas Finance.

New prohibitions:

Unfortunately for consumers, the bill restricts property tax loans in certain situations where they were previously allowed. The Bill prohibits property tax loans in certain new circumstances where they were authorized under previous law. Property tax loans are now prohibited if:

● Borrower’s is 65 years of age or older will not be able to obtain a property tax loan on their homestead property.

● Borrower’s will not be able to obtain a property tax loan if their  taxes are not delinquent and the  property is subject to prexisting  mortgage loan.  This applies even if the borrower has a preexisting tax loans.

Other provisions:

The bill contains other provisions, including the following:

● The bill requires the property tax lender to disclose the approximate cost range for post-closing costs. This disclosure must be provided to the borrower at the same time as the disclosure statement.

●The bill provides that a property owner may not waive a requirement imposedon a property tax lender under Chapter 351 of the Finance Code (unless the

statute provides otherwise).

●The bill provides that a tax lien transfer is void if taxes are not due or delinquent at the time of the transfer, or if it lacks the property owner’s sworn authorization.

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