Tex.
Fin. Code Section 156.501
Recovery Fund
(a)
The commissioner shall establish, administer, and maintain a recovery fund as provided by Section 13.016 (Recovery Fund) and this subchapter. The amounts received by the commissioner for deposit in the fund shall be held by the commissioner in trust for carrying out the purposes of the fund.(b)
Subject to this subsection and Section 156.502 (Funding)(b), the recovery fund shall be used to reimburse residential mortgage loan applicants for actual damages incurred because of acts committed by a residential mortgage loan originator who was licensed under Chapter 157 (Mortgage Bankers and Residential Mortgage Loan Originators) when the act was committed. The use of the fund is limited to reimbursement for out-of-pocket losses caused by an act by a residential mortgage loan originator licensed under Chapter 157 (Mortgage Bankers and Residential Mortgage Loan Originators) that constitutes a violation of Section 157.024 (Disciplinary Action; Cease and Desist Order)(a)(2), (3), (5), (7), (8), (9), (10), (13), (16), (17), or (18) or 156.304 (Fee Assessment and Disclosure)(b).(b-1)
Payments from the recovery fund may not be made to a lender who makes a residential mortgage loan originated by the residential mortgage loan originator or who acquires a residential mortgage loan originated by the residential mortgage loan originator.(c)
Amounts in the recovery fund may be invested and reinvested in accordance with Chapter 2256 (Public Funds Investment), Government Code, and under the prudent person standard described in Section 11b, Article VII, Texas Constitution, and the interest from these investments shall be deposited to the credit of the fund. An investment may not be made under this subsection if the investment will impair the necessary liquidity required to satisfy claims awarded under this subchapter.(c)
Amounts in the recovery fund may be invested and reinvested in accordance with Chapter 2256 (Public Funds Investment), Government Code, and under the prudent person standard described by Section 11b, Article VII, Texas Constitution, and the interest from these investments shall be deposited to the credit of the fund. An investment may not be made under this subsection if the investment will impair the necessary liquidity required to satisfy judgment payments awarded under this subchapter.(d)
Repealed by Acts 2021, 87th Leg., R.S., Ch. 929 (H.B. 3617), Sec. 9, and Acts 2021, 87th Leg., R.S., Ch. 963 (S.B. 1900), Sec. 7(2), eff. September 1, 2021.(e)
Payments from the recovery fund shall be reduced by the amount of any recovery from the residential mortgage loan originator or from any surety, insurer, or other person or entity making restitution to the applicant on behalf of the residential mortgage loan originator.(f)
Repealed by Acts 2021, 87th Leg., R.S., Ch. 929 (H.B. 3617), Sec. 9, and Acts 2021, 87th Leg., R.S., Ch. 963 (S.B. 1900), Sec. 7(2), eff. September 1, 2021.
Source:
Section 156.501 — Recovery Fund, https://statutes.capitol.texas.gov/Docs/FI/htm/FI.156.htm#156.501 (accessed Apr. 20, 2024).
