January 23, 2004

RESPA Update
TLTA is intensifying its efforts to oppose the RESPA rule HUD sent to the OMB last month, and in doing so has joined with other Texas real estate industry groups to express our concerns.  HUD ignored the pleas of every major real estate group, including realtors, homebuilders, mortgage bankers, mortgage brokers and the title industry, all of whom urged that the rule be re-published.  In a united effort with other industry trade groups, we are planning a trip to Washington D.C. with representatives from the Texas Association of Realtors, Independent Bankers Association of Texas and Texas Mortgage Brokers Association to meet with HUD and White House staff to express our joint opposition to this rule.  Click here for the Grassroots Legislative Alert that was sent to members on January 15 for more information about what you can do to help in this effort.

 Home Equity Law
 In September 2003 a constitutional amendment was passed that made changes to the home equity law. The Commissioner of Insurance has published for adoption amendments to forms and procedural rules intended to conform to these recent changes. The TLTA Board of Directors has reviewed and voted to support the following proposed amendments that were submitted to TDI by Stewart Title Guaranty Company. A comment period on the proposed changes will be in effect through February 16, 2004. Please note, upon the Commissioner’s official adoption these items will be effective March 15, 2004.

·         Click here to review the proposed changes

·         Click here to view the Commissioner’s Notice and details for making comments

House Speaker Releases List of Issues for Special Study Before the 79th Legislature;
Public School System a High Priority
House Speaker Tom Craddick released a list of some 180 issues that will be studied by 40 House standing and select committees during the interim prior to the start of the 79th Legislature.

Craddick said the studies will help set the agenda for the next regular legislative session. He pointed to interim studies in advance of the 78th Legislature that documented a need for insurance and tort reforms, higher education tuition deregulation, and an overhaul of the state's method of financing public education -- all key issues for current legislators.

The new interim studies include charges to 36 permanent standing committees and four select committees, three of them new, including panels to study child welfare and foster care, construction industry workers' compensation issues, and sex offender statutes.

TRCC Adopts Emergency Rules Regarding Registration of Builders
Effective January 1, 2004, all home builders in Texas are required to register new homes, material improvements to existing homes, and certain interior renovations exceeding $20,000 with the Texas Residential Construction Commission.  Registration of homes is the first phase of action taken by the commission and the second phase has begun with the adoption of emergency rules regarding registration of builders, effective March 1, 2004.  Click here for more details. 

RadianExpress.com, Inc. Closes Its’ Doors
Radian Express, the mortgage subsidiary of Radian Group, Inc. began the first phase of a shutdown that they expect to be complete by March 1, 2004.  The Internet based settlement company provided real estate information products and services to the first and second mortgage industry.  The primary purpose of the company was to serve as a distribution vehicle for Lien Protection.  However, Radian faced significant legal and regulatory challenges to Lien Protection, which it billed as a mortgage insurance-based alternative to title insurance.  The future of Lien Protection still looms in the courts, but many say they don’t foresee a future for a non-title type of product. 

Texas Land Commissioner Rules 4,600 Acres Do Not Belong To State 
This article is reprinted with permission from  The Legal Description, Tuesday, January 20, 2004

In a dispute over clear title, ancient surveys and mineral and oil rights, Texas Land Commissioner Jerry Patterson has determined that more than 4,600 acres in Upshur County belong to the people who claim to own them, not the state. According to an article in the Tyler Morning Telegraph, Upshur County rancher W. L. Dixon and former surveyor Barton McDonald filed a document last summer alleging that the 4, 662-acre William King Survey is a “vacancy” stemming from surveying problems in the 1830s. According to Texas law, a vacancy is unsurveyed or untitled public land which causes the land to revert back to the state. If land is determined to be a vacancy, landowners must repurchase the property from the state, and mineral rights can be lost without recourse. According to the article, in such cases title insurance may offer little protection to the homeowners unless landowners have paid extra to have their property surveyed. In the ruling released on Friday, Jan. 15, Texas Land Commissioner Jerry Patterson said that a 1941 appeals court case made it clear that the land had been properly surveyed and titled. The plaintiffs can appeal the case within 90 days.  Source: Tyler Morning Telegraph, Jan. 19, 2004.

P-53 Hearing
A special hearing to consider Procedural Rule P-53 regarding Rebates and Discounts was held on January 20 at The Texas Department of Insurance. The commissioner heard testimony from a number of parties pertaining to the Rebate and Discount issue, and will now consider all comments and testimony prior to issuing a ruling.

Texas Title Insurance Rule and Rate Hearings
As of this writing, the Commissioner of Insurance has not yet officially adopted any changes pertaining to the 2002 Texas Title Insurance Rule and Rate Hearing Items. No changes are in effect as of yet, and we will notify you as soon as the Commissioner issues a final order, including effective dates of any changes. For additional information, please contact Leslie Midgley at the TLTA office. To review agenda items under consideration, as well as TLTA's positions, please click here.

OCC issues Final Rules on Preemption and Visitorial Powers
The Office of the Comptroller of Currency has published two final rules. The first rule amends regulations to clarify the applicability of state law to national banks’ operations.  The published preemption rule builds on current regulation by providing that state laws that “obstruct, impair or condition” a national banks’ powers in the areas of lending, deposit taking and other national bank operations are not applicable. The rule also includes a strong anti-predatory lending standard. Laws not applying to national banks include those that regulate loan terms, require state licenses, or impose conditions on deposit or credit relationships. The second rule clarifies the scope of  OCC’s visitorial authority. Both rules apply to operating subsidiaries of national banks, but not financial subsidiaries.  Neither of the rules authorize any new powers or activities, such as real estate brokerage.  For more information or to view the rules as published in the Federal Register, click on the links below: