Bill Text: TX HB264 | 2023-2024 | 88th Legislature | Engrossed

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Bill Title: Relating to requirements for the physical presence of a borrower for signing certain documents related to a home equity loan.

Spectrum: Moderate Partisan Bill (Republican 5-1)

Status: (Engrossed - Dead) 2023-05-03 - Received from the House [HB264 Detail]

Download: Texas-2023-HB264-Engrossed.html

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88R400 JES-D
By: Toth, Cortez, Wilson, Schaefer, et al. H.B. No. 264

A BILL TO BE ENTITLED
AN ACT
relating to requirements for the physical presence of a borrower
for signing certain documents related to a home equity loan.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 343.002(b), Finance Code, is amended to
read as follows:
(b) Except as provided by Subchapter D, this [This] chapter
does not apply to:
(1) a reverse mortgage; or
(2) an open-end account, as defined by Section
301.002.
SECTION 2. Chapter 343, Finance Code, is amended by adding
Subchapter D to read as follows:
SUBCHAPTER D. HOME EQUITY LOANS
Sec. 343.301. DEFINITION. In this subchapter, "home equity
loan" means an extension of credit described by Section 50(a)(6),
Article XVI, Texas Constitution.
Sec. 343.302. PHYSICAL PRESENCE OF CERTAIN BORROWERS AT
CLOSING NOT REQUIRED. (a) This section applies to the closing of a
home equity loan by a borrower who:
(1) is located outside of this state at the time of the
closing and is:
(A) a member of the armed forces of the United
States who is on active duty;
(B) an officer of the Commissioned Corps of the
United States Public Health Service who is on active duty;
(C) a member of reserve components of the armed
forces of the United States not described by Paragraph (A) who is on
active duty;
(D) the spouse or surviving spouse of a person
described by Paragraph (A), (B), or (C); or
(E) a civilian employee of the federal government
employed by, serving with, or accompanying the armed forces of the
United States, if assigned to a foreign country or a vessel or unit
of the armed forces of the United States;
(2) has a disability that prohibits travel or is
quarantined to protect the borrower's health or the health of
others, as verified by a written letter from a physician; or
(3) is unable to travel to the closing because the
borrower is incarcerated or under house arrest.
(b) In lieu of closing a home equity loan in person at the
office of the lender, an attorney, or a title company, a borrower
described by Subsection (a) may close the loan:
(1) from a remote location using remote online
notarization; or
(2) through an agent who:
(A) is acting under a durable power of attorney
that expressly grants the agent the authority to engage in a home
equity loan transaction on behalf of the borrower, regardless of
where the borrower signed the power of attorney; and
(B) appears in person for the closing at the
office of the lender, attorney, or title company on behalf of the
borrower.
SECTION 3. Section 751.203(b), Estates Code, is amended to
read as follows:
(b) A certification described by Subsection (a) may be in
the following form:
CERTIFICATION OF DURABLE POWER OF ATTORNEY BY AGENT
I, ___________ (agent), certify under penalty of perjury
that:
1. I am the agent named in the power of attorney validly
executed by ___________ (principal) ("principal") on ____________
(date), and the power of attorney is now in full force and effect.
2. The principal is not deceased and is presently domiciled
in ___________ (city and state/territory or foreign country).
3. To the best of my knowledge after diligent search and
inquiry:
a. The power of attorney has not been revoked by the
principal or suspended or terminated by the occurrence of any
event, whether or not referenced in the power of attorney;
b. At the time the power of attorney was executed, the
principal was mentally competent to transact legal matters and was
not acting under the undue influence of any other person;
c. A permanent guardian of the estate of the principal
has not qualified to serve in that capacity;
d. My powers under the power of attorney have not been
suspended by a court in a temporary guardianship or other
proceeding;
e. If I am (or was) the principal's spouse, my marriage
to the principal has not been dissolved by court decree of divorce
or annulment or declared void by a court, or the power of attorney
provides specifically that my appointment as the agent for the
principal does not terminate if my marriage to the principal has
been dissolved by court decree of divorce or annulment or declared
void by a court;
f. No proceeding has been commenced for a temporary or
permanent guardianship of the person or estate, or both, of the
principal; and
g. The exercise of my authority is not prohibited by
another agreement or instrument.
4. If under its terms the power of attorney becomes
effective on the disability or incapacity of the principal or at a
future time or on the occurrence of a contingency, the principal now
has a disability or is incapacitated or the specified future time or
contingency has occurred.
5. I am acting within the scope of my authority under the
power of attorney, and my authority has not been altered or
terminated.
6. If applicable, I am the successor to ___________
(predecessor agent), who has resigned, died, or become
incapacitated, is not qualified to serve or has declined to serve as
agent, or is otherwise unable to act. There are no unsatisfied
conditions remaining under the power of attorney that preclude my
acting as successor agent.
7. I agree not to:
a. Exercise any powers granted by the power of
attorney if I attain knowledge that the power of attorney has been
revoked, suspended, or terminated; or
b. Exercise any specific powers that have been
revoked, suspended, or terminated.
8. A true and correct copy of the power of attorney is
attached to this document.
9. If applicable and if used in connection with an extension
of credit under Section 50(a)(6), Article XVI, Texas Constitution,
the power of attorney was executed in the office of the lender, the
office of a title company, or the law office of
____________________.
Date: __________, 20__.
__________________________________ (signature of agent)
SECTION 4. Section 752.051, Estates Code, is amended to
read as follows:
Sec. 752.051. FORM. The following form is known as a
"statutory durable power of attorney":
STATUTORY DURABLE POWER OF ATTORNEY
NOTICE: THE POWERS GRANTED BY THIS DOCUMENT ARE BROAD AND SWEEPING.
THEY ARE EXPLAINED IN THE DURABLE POWER OF ATTORNEY ACT, SUBTITLE P,
TITLE 2, ESTATES CODE. IF YOU HAVE ANY QUESTIONS ABOUT THESE POWERS,
OBTAIN COMPETENT LEGAL ADVICE. THIS DOCUMENT DOES NOT AUTHORIZE
ANYONE TO MAKE MEDICAL AND OTHER HEALTH-CARE DECISIONS FOR YOU. YOU
MAY REVOKE THIS POWER OF ATTORNEY IF YOU LATER WISH TO DO SO. IF YOU
WANT YOUR AGENT TO HAVE THE AUTHORITY TO SIGN HOME EQUITY LOAN
DOCUMENTS ON YOUR BEHALF, THIS POWER OF ATTORNEY MUST BE SIGNED BY
YOU AT THE OFFICE OF THE LENDER, AN ATTORNEY AT LAW, OR A TITLE
COMPANY, UNLESS YOU QUALIFY FOR AN EXCEPTION UNDER SECTION 343.302,
FINANCE CODE.
You should select someone you trust to serve as your agent.
Unless you specify otherwise, generally the agent's authority will
continue until:
(1) you die or revoke the power of attorney;
(2) your agent resigns, is removed by court order, or
is unable to act for you; or
(3) a guardian is appointed for your estate.
I, __________ (insert your name and address), appoint
__________ (insert the name and address of the person appointed) as
my agent to act for me in any lawful way with respect to all of the
following powers that I have initialed below. (YOU MAY APPOINT
CO-AGENTS. UNLESS YOU PROVIDE OTHERWISE, CO-AGENTS MAY ACT
INDEPENDENTLY.)
TO GRANT ALL OF THE FOLLOWING POWERS, INITIAL THE LINE IN
FRONT OF (O) AND IGNORE THE LINES IN FRONT OF THE OTHER POWERS
LISTED IN (A) THROUGH (N).
TO GRANT A POWER, YOU MUST INITIAL THE LINE IN FRONT OF THE
POWER YOU ARE GRANTING.
TO WITHHOLD A POWER, DO NOT INITIAL THE LINE IN FRONT OF THE
POWER. YOU MAY, BUT DO NOT NEED TO, CROSS OUT EACH POWER WITHHELD.
____ (A) Real property transactions, including home equity
loan transactions;
____ (B) Tangible personal property transactions;
____ (C) Stock and bond transactions;
____ (D) Commodity and option transactions;
____ (E) Banking and other financial institution
transactions;
____ (F) Business operating transactions;
____ (G) Insurance and annuity transactions;
____ (H) Estate, trust, and other beneficiary transactions;
____ (I) Claims and litigation;
____ (J) Personal and family maintenance;
____ (K) Benefits from social security, Medicare, Medicaid,
or other governmental programs or civil or military service;
____ (L) Retirement plan transactions;
____ (M) Tax matters;
____ (N) Digital assets and the content of an electronic
communication;
____ (O) ALL OF THE POWERS LISTED IN (A) THROUGH (N). YOU DO
NOT HAVE TO INITIAL THE LINE IN FRONT OF ANY OTHER POWER IF YOU
INITIAL LINE (O).
SPECIAL INSTRUCTIONS:
Special instructions applicable to agent compensation
(initial in front of one of the following sentences to have it
apply; if no selection is made, each agent will be entitled to
compensation that is reasonable under the circumstances):
____ My agent is entitled to reimbursement of reasonable
expenses incurred on my behalf and to compensation that is
reasonable under the circumstances.
____ My agent is entitled to reimbursement of reasonable
expenses incurred on my behalf but shall receive no compensation
for serving as my agent.
Special instructions applicable to co-agents (if you have
appointed co-agents to act, initial in front of one of the following
sentences to have it apply; if no selection is made, each agent will
be entitled to act independently):
____ Each of my co-agents may act independently for me.
____ My co-agents may act for me only if the co-agents act
jointly.
____ My co-agents may act for me only if a majority of the
co-agents act jointly.
Special instructions applicable to gifts (initial in front of
the following sentence to have it apply):
____ I grant my agent the power to apply my property to make gifts
outright to or for the benefit of a person, including by the
exercise of a presently exercisable general power of appointment
held by me, except that the amount of a gift to an individual may not
exceed the amount of annual exclusions allowed from the federal
gift tax for the calendar year of the gift.
ON THE FOLLOWING LINES YOU MAY GIVE SPECIAL INSTRUCTIONS
LIMITING OR EXTENDING THE POWERS GRANTED TO YOUR AGENT.
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
UNLESS YOU DIRECT OTHERWISE BELOW, THIS POWER OF ATTORNEY IS
EFFECTIVE IMMEDIATELY AND WILL CONTINUE UNTIL IT TERMINATES.
CHOOSE ONE OF THE FOLLOWING ALTERNATIVES BY CROSSING OUT THE
ALTERNATIVE NOT CHOSEN:
(A) This power of attorney is not affected by my subsequent
disability or incapacity.
(B) This power of attorney becomes effective upon my
disability or incapacity.
YOU SHOULD CHOOSE ALTERNATIVE (A) IF THIS POWER OF ATTORNEY
IS TO BECOME EFFECTIVE ON THE DATE IT IS EXECUTED.
IF NEITHER (A) NOR (B) IS CROSSED OUT, IT WILL BE ASSUMED THAT
YOU CHOSE ALTERNATIVE (A).
If Alternative (B) is chosen and a definition of my
disability or incapacity is not contained in this power of
attorney, I shall be considered disabled or incapacitated for
purposes of this power of attorney if a physician certifies in
writing at a date later than the date this power of attorney is
executed that, based on the physician's medical examination of me,
I am mentally incapable of managing my financial affairs. I
authorize the physician who examines me for this purpose to
disclose my physical or mental condition to another person for
purposes of this power of attorney. A third party who accepts this
power of attorney is fully protected from any action taken under
this power of attorney that is based on the determination made by a
physician of my disability or incapacity.
I agree that any third party who receives a copy of this
document may act under it. Termination of this durable power of
attorney is not effective as to a third party until the third party
has actual knowledge of the termination. I agree to indemnify the
third party for any claims that arise against the third party
because of reliance on this power of attorney. The meaning and
effect of this durable power of attorney is determined by Texas law.
If any agent named by me dies, becomes incapacitated,
resigns, refuses to act, or is removed by court order, or if my
marriage to an agent named by me is dissolved by a court decree of
divorce or annulment or is declared void by a court (unless I
provided in this document that the dissolution or declaration does
not terminate the agent's authority to act under this power of
attorney), I name the following (each to act alone and
successively, in the order named) as successor(s) to that agent:
__________.
Signed this ______ day of __________, _____________
___________________________
(your signature)
State of _______________________
County of ______________________
This document was acknowledged before me on ____________(date) by
________________________
(name of principal)
____________________________
(signature of notarial officer)
(Seal, if any, of notary) ______________________________________
(printed name)
My commission expires: __________
IMPORTANT INFORMATION FOR AGENT
Agent's Duties
When you accept the authority granted under this power of
attorney, you establish a "fiduciary" relationship with the
principal. This is a special legal relationship that imposes on you
legal duties that continue until you resign or the power of attorney
is terminated, suspended, or revoked by the principal or by
operation of law. A fiduciary duty generally includes the duty to:
(1) act in good faith;
(2) do nothing beyond the authority granted in this
power of attorney;
(3) act loyally for the principal's benefit;
(4) avoid conflicts that would impair your ability to
act in the principal's best interest; and
(5) disclose your identity as an agent when you act for
the principal by writing or printing the name of the principal and
signing your own name as "agent" in the following manner:
(Principal's Name) by (Your Signature) as Agent
In addition, the Durable Power of Attorney Act (Subtitle P,
Title 2, Estates Code) requires you to:
(1) maintain records of each action taken or decision
made on behalf of the principal;
(2) maintain all records until delivered to the
principal, released by the principal, or discharged by a court; and
(3) if requested by the principal, provide an
accounting to the principal that, unless otherwise directed by the
principal or otherwise provided in the Special Instructions, must
include:
(A) the property belonging to the principal that
has come to your knowledge or into your possession;
(B) each action taken or decision made by you as
agent;
(C) a complete account of receipts,
disbursements, and other actions of you as agent that includes the
source and nature of each receipt, disbursement, or action, with
receipts of principal and income shown separately;
(D) a listing of all property over which you have
exercised control that includes an adequate description of each
asset and the asset's current value, if known to you;
(E) the cash balance on hand and the name and
location of the depository at which the cash balance is kept;
(F) each known liability;
(G) any other information and facts known to you
as necessary for a full and definite understanding of the exact
condition of the property belonging to the principal; and
(H) all documentation regarding the principal's
property.
Termination of Agent's Authority
You must stop acting on behalf of the principal if you learn
of any event that terminates or suspends this power of attorney or
your authority under this power of attorney. An event that
terminates this power of attorney or your authority to act under
this power of attorney includes:
(1) the principal's death;
(2) the principal's revocation of this power of
attorney or your authority;
(3) the occurrence of a termination event stated in
this power of attorney;
(4) if you are married to the principal, the
dissolution of your marriage by a court decree of divorce or
annulment or declaration that your marriage is void, unless
otherwise provided in this power of attorney;
(5) the appointment and qualification of a permanent
guardian of the principal's estate unless a court order provides
otherwise; or
(6) if ordered by a court, your removal as agent
(attorney in fact) under this power of attorney. An event that
suspends this power of attorney or your authority to act under this
power of attorney is the appointment and qualification of a
temporary guardian unless a court order provides otherwise.
Liability of Agent
The authority granted to you under this power of attorney is
specified in the Durable Power of Attorney Act (Subtitle P, Title 2,
Estates Code). If you violate the Durable Power of Attorney Act or
act beyond the authority granted, you may be liable for any damages
caused by the violation or subject to prosecution for
misapplication of property by a fiduciary under Chapter 32 of the
Texas Penal Code.
THE AGENT, BY ACCEPTING OR ACTING UNDER THE APPOINTMENT,
ASSUMES THE FIDUCIARY AND OTHER LEGAL RESPONSIBILITIES OF AN AGENT.
SECTION 5. The changes in law made by this Act apply only to
a durable power of attorney executed on or after the effective date
of this Act. A durable power of attorney executed before the
effective date of this Act is governed by the law in effect on the
date the power of attorney was executed, and that law continues in
effect for that purpose.
SECTION 6. This Act takes effect January 1, 2024, but only
if the constitutional amendment proposed by the 88th Legislature,
Regular Session, 2023, authorizing the legislature to provide for
exceptions to the requirement that a home equity loan be closed only
at the office of the lender, an attorney at law, or a title company
is approved by the voters. If that proposed constitutional
amendment is not approved by the voters, this Act has no effect.