SRC-LBB H.J.R. 23 78(R)   BILL ANALYSIS


Senate Research Center   H.J.R. 23
78R2455 DWS-FBy: Hochberg (Carona)
Business & Commerce
5/2/2003
Engrossed


DIGEST AND PURPOSE 

Home equity loans made in Texas can be refinanced but must remain home
equity loans.  In other words, they cannot be converted to "first
mortgages" by the process of refinancing.  This requirement assures that
the constitutional consumer protections applicable to home equity loans
are not circumvented by refinancing the loan. 

However, this has the effect of preventing a home equity loan from being
converted into a reverse mortgage.  Like home equity loans, reverse
mortgages have strong constitutional consumer protections, including a
limit on the ability of a lender to foreclose on a homestead. 

H.J.R. 23 requires the submission to the voters of an amendment to the
Texas Constitution to permit a home equity loan to be refinanced as a
reverse mortgage. 

RULEMAKING AUTHORITY

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

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 50(f), Article XVI, Texas Constitution, to
prohibit a refinance of debt secured by the homestead, any portion of
which is an extension of credit described by Subsection (a)(6) of this
section from being secured by a valid lien against the homestead unless
the refinance of the debt is an extension of credit described by
Subsection (a)(6) or (a)(7) of this section. 

SECTION 2.  Requires this proposed constitutional amendment to be
submitted to the voters at an election to be held November 4, 2003.
Requires the ballot be printed to permit voting for or against the
proposition:  "The constitutional amendment permitting refinancing of a
home equity loan with a reverse mortgage."