SRC-JXG S.J.R. 18 76(R)   BILL ANALYSIS


Senate Research Center   S.J.R. 18
76R208 DWS-DBy: Ellis
Technology & Bus. Growth
2/22/1999
As Filed


DIGEST 

In 1997, the 75th Legislature approved a constitutional amendment that
ended Texas' historic prohibition on home equity lending. However, one word
"and" buried in the law should be an "or" to allow lenders to offer a
reverse mortgage. The word "and" prohibits homeowners from using the equity
in their homes, unless they sell their homes. S.J.R. 18 would allow
homeowners to use their homes as equity without having to sell their homes. 

PURPOSE

As proposed, S.J.R. 18 requires the submission to the voters of a
constitutional amendment to correct language to allow reverse home equity
mortgages for homeowners. 

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 50(k), Article XVI, Texas Constitution, to
redefine "reverse mortgage" to mean an extension of credit that requires no
payment of principal or interest until all borrowers cease occupying the
homestead property as a principal residence for more than 180 consecutive
days; or, rather than and, the location of the homestead property owner is
unknown to the lender. Makes a conforming change. 

SECTION 2. Requires this proposed constitutional amendment to be submitted
to the voters at an election to be held on November 2, 1999. Sets forth the
required language for the ballot.