Senator Zaffirini announces two bills effective Jan. 1

AUSTIN — Two bills passed during the 87th Legislative Session by Senator Judith Zaffirini, D-Laredo, consolidating civil court filing fees and prohibiting predatory wrap mortgages lending practices, became effective Jan. 1. This legislation is meant to simplify court costs and to protect homebuyers.

The Texas civil court system is difficult enough to navigate without the added burden of a complicated fee system, according Zaffirini. Under the previous law, the Office of Court Administration (OCA) reported 223 different civil court filing fees and identified potential constitutional issues regarding filing fees not collected for legitimate justice purposes. Senate Bill (SB) 41 addresses these concerns by simplifying the court cost structure and redirecting money to fund the administration of our courts.

“In 2019 my SB 346 completely overhauled the criminal court costs system, and in 2021 my SB 41 did the same for the civil courts,” Zaffirini said. “I’m delighted our collaboration with OCA resulted in this meaningful legislation that will improve the judicial system for so many.” She undertook the task at the request of Senator Joan Huffman, R-Houston, then-Chair of the Senate State Affairs Committee on which Zaffirini has served since 2015.

The bill simplifies the administration system for local officials without increasing costs for local or state governments. By making the process more efficient and less complicated, state personnel will have an easier time auditing court fees, and Texans will have an easier time understanding what filing fees they must pay.

Beginning Jan. 1, not only will civil court filing fees be consolidated, but also predatory wrap mortgages will be illegal, extending protections to homebuyers against fraudulent lending practices.

In 2016 a wrap mortgage financing scheme affecting Senate District 21 constituents revealed a complex web of illegal mortgage activity that was difficult to prevent, detect or prosecute at the time.

“My staff and I were concerned by this insidious form of predatory lending and its detrimental financial impact on constituents,” Zaffirini said. “Soon we realized, however, that the problem was statewide and that homebuyers needed protection against threats to their families’ security and wellbeing.”

Wrap financing is a type of mortgage in which a seller finances the sale of a residential property that already is subject to an outstanding lien, often without notifying the buyer of the previous lien, or the existing lienholder of the sale. If the seller fails to pay the senior mortgagee, the mortgagee can foreclose on the property, and the buyer, who often lives on the property, is ousted without ever having missed a payment to the wrap seller.

After many residents had fallen victim to this fraud, Zaffirini in 2017 and 2019 filed bills prohibiting the practice. They were passed easily by the Senate, but died in the House of Representatives both years. In 2021 the Legislature finally passed SB 43, which eliminates legal ambiguities and loopholes that allowed predatory wrap mortgage lenders to operate illegally without repercussion.

“Our success began with a problem identified originally in southeast Austin and culminated with the collaboration of Texans impacted statewide,” Zaffirini said. “Thanks to the many constituents, stakeholders and advocates who helped ensure homebuyers in Texas no longer will be harmed by wrap mortgages.”

Zaffirini and her staff already are developing bills for the next legislative session that convenes on January 10, 2023. 

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