LEGISLATIVE BUDGET BOARD
                          Austin, Texas

                           FISCAL NOTE
                       74th Regular Session

                          March 12, 1995



 TO:     Honorable Ken Armbrister, Chair        IN RE:  Senate Bill No. 301
         Committee on State Affairs                     By:Patterson, Jerry
         Senate
         Austin, Texas






FROM: John Keel, Director

In response to your request for a Fiscal Note on Senate Bill No.
301 (Relating to a voluntary, consensual encumbrance on homestead
property for the purpose of an equity loan.) this office has
determined the following:

The bill would allow homeowner's to receive an equity loan or
reversible mortgage loan from financial institutions against
their homestead property.  The principal amount of the loan plus
all other encumbrances could not exceed 90% of the fair market
value of the property used as collateral; only the homestead
property securing an equity loan could be used as collateral.

Acceleration of an equity loan is prohibited due to a decrease in
market value, unless the decrease is caused by damage or
destruction to the property, environmental hazards, condemnation
or use of the secured property that constitutes a waste or
nuisance.

Lenders would be required to provide homeowners with a notice, as
specified in the bill, once they request application for an
equity loan.


No significant fiscal implication to the State or units of local
government is anticipated.


Source:   Comptroller of Public Accounts, Savings and Loan
Department,
                         Department of Banking, Office of the    




Consumer Credit Commissioner
          LBB Staff: JK, BR, DF