On June 15, 2007, the Governor signed HB 716, which amends Chapter 343 of the Finance Code, Chapter 402 and 411 and Section 555.051(a) of the Government Code and Article 12.01 of the Code of Criminal Procedure. The new law takes effect September 1, 2007.

1. The law makes it a felony to make a false statement to obtain property or credit.

Additionally, if the loan is a “home loan”, the new law requires that a written disclosure be signed by the loan applicant(s) at closing. The statutory disclosure should be included with your closing package for all home loans commencing September 1, 2007.

Chapter 343 of the Finance Code defines a “home loan” as follows:

“(2) "Home loan" means a loan that is:

(A) made to one or more individuals for personal, family, or
household purposes; and

(B) secured in whole or part by:

(i) a manufactured home, as defined by Section 347.002, used or to
be used as the borrower's principal residence; or

(ii) real property improved by a dwelling designed for occupancy by
four or fewer families and used or to be used as the borrower's
principal residence.”

A copy of the statutory disclosure is attached for your information.

MORTGAGE FRAUD NOTICE
CHAPTER 343 FINANCE CODE

Date:                               
Property Address:                                                                
Loan Number:                                     

"WARNING: Intentionally or knowingly making a materially false or misleading written statement to obtain property or credit, including a mortgage loan, is a violation of Section 32.32, Texas Penal Code, and , depending on the amount of the loan or value of the property, is punishable by imprisonment for a term]. of 2 years to 99 years and a fine not to exceed $10,000.00."

"I/we, the undersigned home loan applicant(s), represent that I/we have received, read, and understand this notice of penalties for making a materially false or misleading written statement to obtain a home loan."

"I/we represent that all statements and representations contained in my/our written home loan application, including statements or representations regarding my/our identity, employment, annual income, and intent to occupy the residential real property secured by the home loan, are true and correct as of the date of loan closing."

BORROWER: