HB 3798 to Protect New Homebuyers
-- Posted: April 26,2007 | Brian Varvel
Another Bill, House Bill 3798 is making it's way through the Texas Legislature right now that could affect the purchase of NEW housing in Texas. It has long been a practice of homebuilders to offer small discounts on closing costs and/or final price in exchange for using the builders preferred lending source. Builders are now wanting to change that practice to the effect of not only offering the discounts, but actually penalizing you for NOT using their preferred lender.
Case in point, consider for a moment if you will that you're an unsuspecting buyer and you walk into a model home in a new development. You decide you like the home and subsequently sign a purchase contract using the builders incentives after being assured by the sales representative that the builders mortgage company will offer competitive rates and costs. Several days before closing you discover that the interest rate and/or closing costs are considerably higher than the market rate but now you cannot get out of the contract. As a buyer, you must now decide between losing thousands of dollars as a result of the higher interest rate, or losing thousands of dollars of your own purchase money that was originally planned to go towards the house.
House Bill 3798 can put a stop to this practice, but only if you as a consumer will write to your legislators. If you do not know who to write or how to contact your legislators, then follow this weblink to find out how to contact them.
House Bill #3798:
A BILL TO BE ENTITLED AN ACT
Relating to certain sellers of homes offering a benefit contingent on the use of a specific mortgage lender.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter D, Chapter 35, Business & Commerce Code, is amended by adding Section 35.65 to read as follows:
Sec. 35.65. SELLER PROHIBITED FROM MAKING BENEFIT CONTINGENT ON USE OF MORTGAGE LENDER.
SECTION 2. This Act applies only to the sale of a single-family residence closed on or after the effective date of this Act.
- (a) A person who builds and sells a single-family residence may not offer or provide a benefit to a potential purchaser of the residence as consideration for the purchaser's agreement to use a mortgage lender specified by the person for a loan to purchase the residence.
- (b) A person who violates Subsection (a) is liable to the purchaser for:
- (1) any damages arising from the violation; and
- (2) reasonable attorney's fees and costs.
- (c) A purchaser may not waive the right to sue under Subsection (b).
SECTION 3. This Act takes effect September 1, 2007.
Brian Varvel, At Home in Katy
Brian is the owner / operator of the At Home in Katy Team at Keller Williams Realty Katy @ Cinco Ranch. In addition to his real estate career, he is also a regular contributor to multiple websites on real estate and technology. Brian also takes great pride in serving on the Board for Cinco Charities, Inc. a non-profit organization serving the Katy area.
You can contact Brian at:
281.787.0930
brian@athomeinkaty.com
http://www.athomeinkaty.com
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