Builders tieing 'incentives' to the transaction, of using their mortgage company

While this is a shady business tactic.... it isn't illegal YET!!!

I received an email saying this was being voted on May 2007. You need to be heard so please contact Texas Legislature. The bill states it takes effect Sept 2007.....so hurry. 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 by email: http://www.capitol.state.tx.us/resources/FAQ.aspx#2

The background on this is that builders have gone from offering a small incentive to go to their mortgage company to now withholding up to $25,000 in upgrades if a buyer doesn't go to their mortgage company. As a result, an unsuspecting buyer signs a contract with that incentive/penalty, after being assured that the builder's mortgage company will offer a market rate and costs, only to find out prior to closing that the rate is considerably higher than the market but they can't get out of the contract at that point - - and are stuck choosing between losing thousands of dollars on the mortgage or losing thousands of dollars of their own purchase money that was supposed to go toward the house. This bill can stop that practice if you and your friends will write your legislators.

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. (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 2. This Act applies only to the sale of a single-family residence closed on or after the effective date of this Act. SECTION 3. This Act takes effect September 1, 2007.

http://www.legis.state.tx.us/tlodocs/80R/billtext/pdf/HB03798I.pdf <== copy of the text of this bill.

http://www.dallasloanguy.com/wordpress/

Tom Burris
DallasLoanGuy.com

Texas Home Loans