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The Texas Finance Commission, on behalf of the Department of Savings and Mortgage Lending, recently passed loan status form provisions that include its conditional prequalification and conditional approval letters. The provisions come into force on May 1, 2020.
The new provisions aim to clarify the use of conditional prequalification and conditional loan approval forms when these forms are provided by mortgage companies, mortgage bankers and residential mortgage originators to mortgage applicants. or potential mortgage applicants. The new requirements: (i) standardize the content of conditional prequalification forms or letters used by mortgage companies, mortgage bankers and residential mortgage originators; (ii) help emphasize to mortgage applicants that the prequalification form is not a loan approval or a commitment to lend; (iii) standardize the content of conditional loan approval forms or letters used by mortgage companies, mortgage bankers and residential mortgage originators; and (iv) clarify the contents of the conditional loan approval form to emphasize that the applicant is in fact approved for a mortgage loan, provided certain conditions are met before the loan is closed.
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