By Hochberg                                          H.J.R. No. 114
                                  A JOINT RESOLUTION
    1-1  proposing a constitutional amendment authorizing an encumbrance on
    1-2  homestead property for the purpose of a reverse mortgage.
    1-3        BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-4        SECTION 1.  Section 50, Article XVI, Texas Constitution, is
    1-5  amended to read as follows:
    1-6        Sec. 50.  (a)  The homestead of a family, or of a single
    1-7  adult person, shall be, and is hereby protected from forced sale,
    1-8  for the payment of all debts except for:
    1-9              (1)  the purchase money thereof, or a part of such
   1-10  purchase money;
   1-11              (2)  <,> the taxes due thereon;
   1-12              (3)  <, or for> work and material used in constructing
   1-13  improvements thereon, if <and in this last case only when> the work
   1-14  and material are contracted for in writing, with the consent of
   1-15  both spouses, in the case of a family homestead, given in the same
   1-16  manner as is required in making a sale and conveyance of the
   1-17  homestead; or
   1-18              (4)  a reverse mortgage.
   1-19        (b)  The <nor may the> owner or claimant of the property
   1-20  claimed as homestead, if married, may not sell or abandon the
   1-21  homestead without the consent of the other spouse, given in such
   1-22  manner as may be prescribed by law.
   1-23        (c)  No mortgage, trust deed, or other lien on the homestead
   1-24  shall ever be valid unless it secures a debt described by this
    2-1  section, <except for the purchase money therefor, or improvements
    2-2  made thereon, as herinbefore provided,> whether such mortgage, or
    2-3  trust deed, or other lien, shall have been created by the owner
    2-4  alone, or together with his or her spouse, in case the owner is
    2-5  married.  All pretended sales of the homestead involving any
    2-6  condition of defeasance shall be void.
    2-7        (d)  A reverse mortgage may be made only by a bank, savings
    2-8  and loan association, savings bank, or credit union doing business
    2-9  under the laws of this state or the United States.
   2-10        (e)  The legislature shall enact legislation:
   2-11              (1)  giving a reverse mortgage priority over subsequent
   2-12  liens;
   2-13              (2)  providing penalties for failure of a lender to
   2-14  make required advances under a reverse mortgage;
   2-15              (3)  regulating conditions under which a reverse
   2-16  mortgage becomes due and payable;
   2-17              (4)  providing for consumer information and counseling
   2-18  relating to reverse mortgages; and
   2-19              (5)  otherwise regulating reverse mortgages as the
   2-20  legislature determines necessary.
   2-21        (f)  A lender may not make a reverse mortgage unless the
   2-22  legislation required to be enacted under Subsection (e) is in
   2-23  effect.
   2-24        (g)  In this section "reverse mortgage" means a nonrecourse
   2-25  loan secured by real property:
   2-26              (1)  under which cash advances are provided to a
   2-27  borrower based on the equity in a borrower's owner-occupied
    3-1  principal residence homestead property; and
    3-2              (2)  that requires no payment of principal or interest
    3-3  until the entire loan becomes due and payable. <This amendment
    3-4  shall become effective upon its adoption.>
    3-5        SECTION 2.  This proposed constitutional amendment shall be
    3-6  submitted to the voters at an election to be held November 7, 1995.
    3-7  The ballot shall be printed to permit voting for or against the
    3-8  proposition:  "The constitutional amendment allowing reverse
    3-9  mortgages."