By Hochberg H.J.R. No. 60
75R4302 BEM-D
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) [,] an owelty of partition imposed against the
1-13 entirety of the property by a court order or by a written agreement
1-14 of the parties to the partition, including a debt of one spouse in
1-15 favor of the other spouse resulting from a division or an award of
1-16 a family homestead in a divorce proceeding;
1-17 (4) [,] the refinance of a lien against a homestead,
1-18 including a federal tax lien resulting from the tax debt of both
1-19 spouses, if the homestead is a family homestead, or from the tax
1-20 debt of the owner;
1-21 (5) [, or for] work and material used in constructing
1-22 improvements thereon, if [and in this last case only when] the work
1-23 and material are contracted for in writing, with the consent of
1-24 both spouses, in the case of a family homestead, given in the same
2-1 manner as is required in making a sale and conveyance of the
2-2 homestead; or
2-3 (6) a reverse mortgage.
2-4 (b) The [nor may the] owner or claimant of the property
2-5 claimed as homestead, if married, may not sell or abandon the
2-6 homestead without the consent of the other spouse, given in such
2-7 manner as may be prescribed by law.
2-8 (c) No mortgage, trust deed, or other lien on the homestead
2-9 shall ever be valid unless it secures a debt described by this
2-10 section, [except for a debt described by this section,] whether
2-11 such mortgage, or trust deed, or other lien, shall have been
2-12 created by the owner alone, or together with his or her spouse, in
2-13 case the owner is married. All pretended sales of the homestead
2-14 involving any condition of defeasance shall be void. A purchaser
2-15 or lender for value without actual knowledge may conclusively rely
2-16 on an affidavit that designates other property as the homestead of
2-17 the affiant and that states that the property to be conveyed or
2-18 encumbered is not the homestead of the affiant.
2-19 (d) A reverse mortgage may be made only by a bank, savings
2-20 and loan association, savings bank, or credit union doing business
2-21 under the laws of this state or the United States.
2-22 (e) The legislature shall enact legislation:
2-23 (1) giving a reverse mortgage priority over subsequent
2-24 liens;
2-25 (2) providing penalties for failure of a lender to
2-26 make required advances under a reverse mortgage;
2-27 (3) regulating conditions under which a reverse
3-1 mortgage becomes due and payable;
3-2 (4) providing for consumer information and counseling
3-3 relating to reverse mortgages; and
3-4 (5) otherwise regulating reverse mortgages as the
3-5 legislature determines necessary.
3-6 (f) A lender may not make a reverse mortgage unless the
3-7 legislation required to be enacted under Subsection (e) is in
3-8 effect.
3-9 (g) In this section "reverse mortgage" means a nonrecourse
3-10 loan secured by real property:
3-11 (1) under which cash advances are provided to a
3-12 borrower based on the equity in a borrower's owner-occupied
3-13 principal residence homestead property; and
3-14 (2) that requires no payment of principal or interest
3-15 until the entire loan becomes due and payable.
3-16 SECTION 2. This proposed constitutional amendment shall be
3-17 submitted to the voters at an election to be held November 4, 1997.
3-18 The ballot shall be printed to permit voting for or against the
3-19 proposition: "The constitutional amendment allowing reverse
3-20 mortgages secured by a lien on homestead property."