A lender that funded a 2026 Texas loan and later bought it back claims $30,000 from the recovery fund. May a lender that made or acquired the loan recover its loss from this fund?
Correct Answer
D) Barred: no payment goes to a lender who made or acquired the loan
Payments from the recovery fund may not be made to a lender who makes a residential mortgage loan originated by the originator or who acquires such a loan, because the fund exists for loan applicants. Other choices: a real loss does not make a lender an eligible claimant; the $25,000 cap governs how much an eligible claimant may receive; and the lender knowledge is not the test. Source: Tex. Fin. Code sec. 156.501(b-1)
Why This Is the Correct Answer
Payments from the recovery fund may not be made to a lender who makes a residential mortgage loan originated by the originator or who acquires such a loan, because the fund exists for loan applicants. Other choices: a real loss does not make a lender an eligible claimant; the $25,000 cap governs how much an eligible claimant may receive; and the lender knowledge is not the test. Source: Tex. Fin. Code sec. 156.501(b-1)
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