HBA-ALS H.J.R. 18 76(R) BILL ANALYSIS Office of House Bill AnalysisH.J.R. 18 By: Chisum Financial Institutions 4/5/1999 Introduced BACKGROUND AND PURPOSE Under current law, a borrower can lease or abandon a homestead subject to a reverse mortgage, leaving a lender with no legal recourse. There is a concern that lenders are unwilling to enter into reverse mortgages. H.J.R. 18 allows a bank to foreclose on reverse mortgage property if the homestead property securing the loan is sold or transferred, if all borrowers have ceased to occupy the homestead property as a principal residence for more than 180 consecutive days, or if the homestead property owner's whereabouts are unknown. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 50(k), Article XVI, Texas Constitution, to include within the definition of a "reverse mortgage" an extension of credit that requires no payment of principal or interest until the homestead property securing the loan is sold or transferred, all borrowers cease to occupy the homestead property as a principal residence for more than 180 consecutive days, or the homestead property owner's location is unknown to the lender. Makes nonsubstantive changes. SECTION 2. Requires this proposed constitutional amendment to be submitted to the voters at an election to be held November 2, 1999. Sets forth the required language for the ballot.