Late Fee Defaults Update, Global Standard Value Field Mapping Changes, and New Data Integrity Error: Texas Plain Language Second Liens

Texas Plain Language documents are notes and security instruments with easy-to-understand text that applies to Chapter 342 consumer loans, Chapter 348 retail installment contracts, and 50(a)(6) home equity loans, all of which have an interest rate above ten percent (10%). The model Plain Language contract provisions are found under Title 7, Part 5, Chapter 90 of the Texas Regulations. Additional information about the Texas Plain Language Initiative can be found on the Texas Office of Consumer Credit Commissioner website at: https://occc.texas.gov/industry/plain-language-initiative.

Several updates have been made in ConformX regarding Texas Plain Language loans.

Texas Closed End Second Lien Documents
There are three existing standard sets of Plain Language documents in ConformX for second lien loans based on the model Plain Language contract templates:

Texas [50(a)(6)] Home Equity Plain Language
TX [50(a)(6)] Home Equity Plain Language Closed End 2nd Note (Cx9420)
TX [50(a)(6)] Home Equity Plain Language Closed End 2nd Security Instrument (Cx9421)

Texas Purchase Money Plain Language
TX Plain Language 2nd Purchase Money Closed End Note (Cx9422)
TX Plain Language 2nd Purchase Money Closed End Security Instrument (Cx9423)

Texas Construction Plain Language
TX Plain Language 2nd Home Improvement Note (Cx19174)
TX Plain Language 2nd Home Improvement Deed of Trust (Cx19173)

There are also two standard sets of non-Plain Language, closed end, second lien documents for Texas in ConformX:

Texas [50(a)(6)] Home Equity
TX [50(a)(6)] Home Equity Second Note (Cx6183)
TX [50(a)(6)] Home Equity Second Deed of Trust (Cx6179)

Texas non-Home Equity
Fixed Rate Note Texas Second (Cx1075)
TX Deed of Trust Second (Cx510)

Document Print Condition Update
The print configuration of standard Fixed Rate Note Texas Second (Cx1075) has been updated. The document will now only print when “Use Texas Plain Language” (FI 36021) is set to “No”. This change means the note print conditions will match the existing print conditions of the corresponding security instrument TX Deed of Trust Second (Cx510).

Late Charge Defaults Update
The three Texas Plain Language notes listed above were adopted by the Finance Commission of Texas with the following text in the late charge section hardcoded:

“If I don't pay all of a payment within 10 days after it is due, you can charge me a late charge. The late charge will be 5% of the scheduled payment.”

A new ConformX Late Charge Default has been added for Texas Plain Language loans. This will allow the hardcoded “10 days” and “5%” late fee values from the Texas Plain Language notes to print on other documents including the Loan Estimate and the Closing Disclosure.

Note that the existing “Federal High-Cost Mortgage” ConformX Late Charge Default rule of 15 days and 4% late fee is still applied when “HCL – Federal” (FI 51518) is set to “True”. The three Texas Plain Language notes listed above will continue to print the following for the late charge text when “HCL – State” (FI 51517) is “True”:

“If I don't pay all of a payment within 15 days after it is due, you can charge me a late charge. The late charge will be 4% of the scheduled payment.”

Global Standard Value Field Mapping Updates
The existing "No" and "Yes" global standard value field mappings that default the value of “Use Texas Plain Language” (FI 36021) have been updated to remove the “Document Package Type” restriction. Previously, the “Use Texas Plain Language” field was only defaulted for Pre-Closing and Closing package types. Since the new late charge default for Texas Plain Language loans relies on FI 36021 being set to “Yes” when applicable, the package type limitation has been removed.

The global standard value field mappings will continue to be based on “Interest Rate” (FI 1005) when “Use Texas Plain Language” has not been set for Texas closed end, second lien loans. “Use Texas Plain Language” will continue to default to “Yes” for these loans when the “Interest Rate” is over ten percent (10%) and “No” otherwise.

New Data Integrity Hard Stop Error
The Finance Commission of Texas has not adopted a set of model Plain Language documents for regular, Texas non-Home Equity refinances. Since there is no note or security instrument provided by the state for this situation, and no standard note or security instrument will print in ConformX by default, a new Data Integrity Error has been added. The following Error message will trigger in all document package types for Texas Plain Language, second lien, cash-out refinances, and no cash-out refinances that are not set as Texas [50(a)(6)] Home Equity:

“Texas Plain Language contract templates are not provided by the TX OCCC for non-Home Equity (non-50(a)(6)) refinances. See 7 TAC § 90 "Chapter 342, Plain Language Contract Provisions". If lender is exempt from Texas Plain Language requirements per TX AG Opinion No. JC-0513, please set Use Texas Plain Language (Field 36021) to "No".”

The corresponding field values that trigger this new ConformX Data Integrity Error are:

• “Property State” (FI 1714) = TX
• “Use Texas Plain Language” (FI 36021) = Yes
• “Lien Position” (FI 1041) = Second Lien
• “Loan Purpose” (FI 5991) = CashOutOther or NoCashOutOther
• “Is this a Texas Home Equity Section 50(a)(6) loan?” (FI 29932) = No

“Use Texas Plain Language” (FI 36021) can be set to "No" when the lender has determined they are exempt from Texas Plain Language requirements. Setting “Use Texas Plain Language” to “No” will:

• Trigger the corresponding set of regular documents to print instead of the Texas Plain Language documents.
• Apply a 15-day late charge rule when ConformX Late Charge Defaults are utilized.
• Ensure the new Data Integrity Error conditions are not met, since regular documents will print for non-Texas Home Equity refinances.

Docutech strongly urges clients to test these changes before they are pushed to Production and to report any issues to Client Support as soon as possible to ensure a smooth transition.

These changes are available for testing on Stage & Stage 2 servers and will take effect on August 8, 2025. If you have any questions or concerns, please contact Client Support at 1.800.497.3584.

COM-6397
T3S-22927
DR-191219

The preceding is for informational purposes only and is not and may not be construed as legal advice. No third-party entity may rely upon anything contained herein when making legal and/or other determinations regarding its practices, and such third-party should consult with an attorney prior to embarking upon any specific course of action.