Texas House Bill HJR124

Texas 2023 - 88th Regular

• Filed: 2/24/23

Caption

Proposing a constitutional amendment to remove the requirement that a home equity loan be closed only at the office of the lender, an attorney at law, or a title company.

Impact

The passing of HJR124 would have significant implications for state laws governing home equity loans. The amendment could simplify the process for obtaining these loans, potentially leading to increased access for Texas homeowners who find existing closing requirements cumbersome. Removing the stringent location closure requirements may also encourage more lenders to offer competitive rates and terms, benefitting consumers. However, the potential risks associated with less oversight and legal protections at non-traditional closing sites could be a concern for borrowers regarding their rights and financial security.

Summary

HJR124 is a joint resolution proposing a constitutional amendment to remove the requirement that home equity loans be closed only at designated locations, specifically at the office of the lender, an attorney at law, or a title company. This legislative change aims to enhance flexibility for homeowners seeking equity loans, allowing them to potentially close these loans in more accessible locations. The resolution seeks to modify Sections 50(a) and (g), Article XVI of the Texas Constitution, which currently impose these restrictions. If passed, this amendment would be submitted to the voters for approval during the election scheduled for November 7, 2023.

Sentiment

The sentiment surrounding HJR124 appears to be mixed among lawmakers and advocates. Proponents argue that the amendment will bring more convenience to homeowners, aligning the state’s practices with other regions that allow more flexible closing options. This sentiment is echoed by some financial institutions that advocate for reforms to facilitate easier access to home equity financing. Conversely, opponents have expressed concerns regarding the safeguards currently provided by the existing laws, fearing that loosening these regulations may expose borrowers to greater risks of fraud or mismanagement.

Contention

Notably, the contention arises from the concerns that removing the requirement for specific closing locations may diminish consumer protections that are crucial in real estate transactions. Critics worry that the changes could lead to an increase in predatory lending practices, with less oversight in unsecured environments. Legislative discussions around HJR124 have highlighted the balancing act between improving access to credit and maintaining stringent requirements designed to protect consumers from potential exploitation.