By Chisum H.J.R. No. 18
76R208 DWS-D
A JOINT RESOLUTION
1-1 proposing a constitutional amendment relating to when payment may
1-2 be required on a reverse mortgage.
1-3 BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 50(k), Article XVI, Texas Constitution,
1-5 is amended to read as follows:
1-6 (k) "Reverse mortgage" means an extension of credit:
1-7 (1) that is secured by a voluntary lien on homestead
1-8 property created by a written agreement with the consent of each
1-9 owner and each owner's spouse;
1-10 (2) that is made to a person who is or whose spouse is
1-11 55 years or older;
1-12 (3) that is made without recourse for personal
1-13 liability against each owner and the spouse of each owner;
1-14 (4) under which advances are provided to a borrower
1-15 based on the equity in a borrower's homestead;
1-16 (5) that does not permit the lender to reduce the
1-17 amount or number of advances because of an adjustment in the
1-18 interest rate if periodic advances are to be made;
1-19 (6) that requires no payment of principal or interest
1-20 until:
1-21 (A) the homestead property securing the loan is
1-22 sold or otherwise transferred; [or]
1-23 (B) all borrowers cease occupying the homestead
1-24 property as a principal residence for more than 180 consecutive
2-1 days; or
2-2 (C) [and] the location of the homestead property
2-3 owner is unknown to the lender;
2-4 (7) that provides that if the lender fails to make
2-5 loan advances as required in the loan documents and if the lender
2-6 fails to cure the default as required in the loan documents, the
2-7 lender forfeits all principal and interest of the reverse mortgage;
2-8 and
2-9 (8) that is not made unless the owner of the homestead
2-10 attests in writing that the owner received counseling regarding the
2-11 advisability and availability of reverse mortgages and other
2-12 financial alternatives.
2-13 SECTION 2. This proposed constitutional amendment shall be
2-14 submitted to the voters at an election to be held November 2, 1999.
2-15 The ballot shall be printed to permit voting for or against the
2-16 proposition: "The constitutional amendment relating to when
2-17 payment may be required on a reverse mortgage."