1. (a) Applicability. The fee limitations contained in this section are applicable to property tax loans secured by property designated as "Category A (Real Property: Single-Family Residential)," and homesteads designated as "Category E (Real Property: Farm and Ranch Improvements)" by the Property Classification Guide published by the Texas Comptroller of Public Accounts.

2. (b) Closing costs for which fees may be charged, contracted for, or received.

   1. (1) Scope of closing costs. For purposes of this section, the term "closing costs" includes costs incurred by a property tax lender from the time of application through the time of closing.

   2. (2) Examples of closing costs. The following is a non-comprehensive list of examples of closing costs for which a property tax lender may charge, contract for, or receive fees in connection with a property tax loan. Other law may limit the ability to charge these and other fees. Examples of some allowable fees for closing costs include the following:

      1. (A) an application fee;
      2. (B) an appraisal or inspection fee;
      3. (C) a title examination fee;
      4. (D) a property survey fee;
      5. (E) a fee for flood and plat determinations;
      6. (F) a document preparation fee;
      7. (G) a closing or escrow fee;
      8. (H) a fee for a tax certificate or tax payoff determination;
      9. (I) a loan processing fee;
      10. (J) an underwriting fee;
      11. (K) a fee for obtaining credit reports;
      12. (L) a fee for courier and delivery services.

3. (c) Total maximum fees for closing costs. For purposes of this section, the "total amount of money paid by a property tax lender to the taxing unit(s) to obtain transfer of the tax lien" will be referred to as the "total tax lien payment amount."

   1. (1) Maximum fees include funds received by third parties or retained by property tax lender. The maximum fees provided for by this section encompass fees related to closing costs, whether the charge is paid by a property owner directly to a third party, paid to a third party through a property tax lender, or paid by a property owner directly to and retained by a property tax lender. A property tax lender may absorb any closing costs and may pay third parties out of the total compensation paid to it by a property owner.

   2. (2) Maximum fee limits for closing costs. A property owner may not be charged, directly or indirectly, by a property tax lender an amount related to closing costs in excess of the amounts authorized by this section. A property tax lender may not directly or indirectly charge, contract for, or receive any amount related to closing costs from a property owner in excess of the amounts authorized by this section. The following subparagraphs contained in this paragraph outline the total maximum fees for closing costs that may be charged, contracted for, or received by a property tax lender in connection with a property tax loan, based on the total tax lien payment amount.

      1. (A) For a total tax lien payment amount that is less than $2,500, the maximum fee for closing costs is $1,000.
      2. (B) For a total tax lien payment amount that is equal to or greater than $2,500 but less than $5,000, the maximum fee for closing costs is $1,250.
      3. (C) For a total tax lien payment amount that is equal to or greater than $5,000 but less than $7,500, the maximum fee for closing costs is $1,500.
      4. (D) For a total tax lien payment amount that is equal to or greater than $7,500 but less than $10,000, the maximum fee for closing costs is $1,750.
      5. (E) For a total tax lien payment amount that is equal to or greater than $10,000, the maximum fee for closing costs is $2,000, or 10% of the total tax lien payment amount, whichever is greater.
   3. (3) Reasonable closing costs. The maximum fees contained in paragraph (2) of this subsection constitute "reasonable closing costs" under Texas Tax Code, §32.06.

Source Note:The provisions of this §89.601 adopted to be effective January 3, 2008, 32 TexReg 9949.