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Summary: SB 247 would seek to regulate the property tax lending industry in an effort to protect consumers and remove loopholes in the process. Currently, a homeowner can sign a certification with a property tax lender that would allow the lender to pay the homeowner's property taxes in exchange for charging the homeowner interest and fees. On behalf of the homeowner, the lender pays the property taxes to the taxing entity, a government entity, and the taxing entity transfers the lien to the lender. As a result, the lender's lien becomes a priority lien with rights to payment first before the mortgage banker.
SB 247 would make seven primary changes to the property tax lender's process as follows:
Analysis: The bill would expand the scope of government by granting more authority to the Finance Commission of Texas and the Consumer Credit Commissioner, allowing the Commission to provide more oversight and charge penalties. However, this legislation does provide some sensible consumer protection by requiring the relevant lenders to clearly state interest rates, prevent them from charging fees that are not agreed to by the consumer, prevent certain fees that are prohibited in the tax code, and require full disclosure about the payment period, number of payments, finance charges, etc. We are neutral on SB 247.