If required disclosures were not given before closing, the wrap borrower may rescind the loan and related purchase agreement in writing.
Sec. 159.104. FAILURE TO PROVIDE DISCLOSURE BEFORE CLOSING; RIGHT OF RESCISSION. (a) Subject to Subsection (b), if a wrap mortgage loan is closed without the wrap lender providing the disclosure statement required by Section 159.101 or any disclosure required by Section 159.102, the wrap borrower may rescind the wrap mortgage loan agreement and the related purchase agreement at any time by providing the wrap lender notice of rescission in writing. (b) If the wrap borrower receives a required disclosure statement under Section 159.101 or 159.102 after the date the wrap mortgage loan is closed but before the wrap borrower provides notice of rescission, the wrap borrower may rescind the wrap mortgage loan agreement and the related purchase agreement in writing on or before the 21st day after the date of receipt of the disclosure statement. (c) Not later than the 30th day after the date the wrap borrower provides notice of rescission under this section, the wrap lender shall return to the wrap borrower: (1) all principal and interest payments made by the wrap borrower on the wrap mortgage loan; (2) any money or property given as earnest money, a down payment, or otherwise in connection with the wrap mortgage loan or related purchase transaction; and (3) any escrow amounts for the wrap mortgage loan or related purchase transaction. (d) On the date on which all of the returned money or property described by Subsection (c) is received by the wrap borrower, the wrap borrower shall convey to the wrap lender or the wrap lender's designee the residential real estate described by Section 159.001(7)(A). The wrap borrower shall surrender possession of the residential real estate not later than the 30th day after the date of the wrap borrower's receipt of the money or property returned as described by this subsection. (e) Notwithstanding Subsection (a) or (b), the wrap lender may avoid rescission if not later than the 30th day after the date of receipt of notice of rescission under Subsection (a), the wrap lender: (1) pays the outstanding balance due on any debt described by Section 159.001(7)(A)(ii); (2) pays any due and unpaid taxes or other government assessment on the residential real estate described by Section 159.001(7)(A); (3) pays to the wrap borrower as damages for noncompliance the sum of $1,000 and any reasonable attorney's fees incurred by the wrap borrower; and (4) provides to the wrap borrower evidence of compliance with Subdivisions (1) and (2). Added by Acts 2021, 87th Leg., R.S., Ch. 76 (S.B. 43), Sec. 3, eff. January 1, 2022.