By Ellis                                              S.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."