Texas 2015 - 84th Regular

Texas House Bill HJR128 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	By: Raymond H.J.R. No. 128
2	2
3	3
4	4	A JOINT RESOLUTION
5	5	proposing a constitutional amendment relating to the limitation of
6	6	fees that may be charged for a home equity loan.
7	7	BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF TEXAS:
8	8	SECTION 1. Sections 50(a)(6)(E) and (g), Article XVI, Texas
9	9	Constitution, are amended to read as follows:
10	10	(E) does not require the owner or the owner's spouse to pay, in
11	11	addition to any interest, fees to any person the lender or
12	12	originator that are necessary to originate, evaluate, maintain,
13	13	record, insure, or service the extension of credit that exceed, in
14	14	the aggregate, three percent of the original principal amount of
15	15	the extension of credit;
16	16	(g) An extension of credit described by Subsection (a)(6) of
17	17	this section may be secured by a valid lien against homestead
18	18	property if the extension of credit is not closed before the 12th
19	19	day after the lender provides the owner with the following written
20	20	notice on a separate instrument:
21	21	"NOTICE CONCERNING EXTENSIONS OF CREDIT DEFINED BY SECTION
22	22	50(a)(6), ARTICLE XVI, TEXAS CONSTITUTION:
23	23	"SECTION 50(a)(6), ARTICLE XVI, OF THE TEXAS CONSTITUTION
24	24	ALLOWS CERTAIN LOANS TO BE SECURED AGAINST THE EQUITY IN YOUR HOME.
25	25	SUCH LOANS ARE COMMONLY KNOWN AS EQUITY LOANS. IF YOU DO NOT REPAY
26	26	THE LOAN OR IF YOU FAIL TO MEET THE TERMS OF THE LOAN, THE LENDER MAY
27	27	FORECLOSE AND SELL YOUR HOME. THE CONSTITUTION PROVIDES THAT:
28	28	"(A) THE LOAN MUST BE VOLUNTARILY CREATED WITH THE CONSENT
29	29	OF EACH OWNER OF YOUR HOME AND EACH OWNER'S SPOUSE;
30	30	"(B) THE PRINCIPAL LOAN AMOUNT AT THE TIME THE LOAN IS MADE
31	31	MUST NOT EXCEED AN AMOUNT THAT, WHEN ADDED TO THE PRINCIPAL BALANCES
32	32	OF ALL OTHER LIENS AGAINST YOUR HOME, IS MORE THAN 80 PERCENT OF THE
33	33	FAIR MARKET VALUE OF YOUR HOME"(C) THE LOAN MUST BE WITHOUT RECOURSE
34	34	FOR PERSONAL LIABILITY AGAINST YOU AND YOUR SPOUSE UNLESS YOU OR
35	35	YOUR SPOUSE OBTAINED THIS EXTENSION OF CREDIT BY ACTUAL FRAUD;
36	36	"(D) THE LIEN SECURING THE LOAN MAY BE FORECLOSED UPON ONLY
37	37	WITH A COURT ORDER;
38	38	"(E) FEES AND CHARGES PAID TO THE LENDER OR ORIGINATOR TO
39	39	MAKE THE LOAN MAY NOT EXCEED 3 PERCENT OF THE LOAN AMOUNT;
40	40	"(F) THE LOAN MAY NOT BE AN OPEN-END ACCOUNT THAT MAY BE
41	41	DEBITED FROM TIME TO TIME OR UNDER WHICH CREDIT MAY BE EXTENDED FROM
42	42	TIME TO TIME UNLESS IT IS A HOME EQUITY LINE OF CREDIT;
43	43	"(G) YOU MAY PREPAY THE LOAN WITHOUT PENALTY OR CHARGE;
44	44	"(H) NO ADDITIONAL COLLATERAL MAY BE SECURITY FOR THE LOAN;
45	45	"(I) THE LOAN MAY NOT BE SECURED BY HOMESTEAD PROPERTY THAT
46	46	IS DESIGNATED FOR AGRICULTURAL USE AS OF THE DATE OF CLOSING, UNLESS
47	47	THE AGRICULTURAL HOMESTEAD PROPERTY IS USED PRIMARILY FOR THE
48	48	PRODUCTION OF MILK;
49	49	"(J) YOU ARE NOT REQUIRED TO REPAY THE LOAN EARLIER THAN
50	50	AGREED SOLELY BECAUSE THE FAIR MARKET VALUE OF YOUR HOME DECREASES
51	51	OR BECAUSE YOU DEFAULT ON ANOTHER LOAN THAT IS NOT SECURED BY YOUR
52	52	HOME;
53	53	"(K) ONLY ONE LOAN DESCRIBED BY SECTION 50(a)(6), ARTICLE
54	54	XVI, OF THE TEXAS CONSTITUTION MAY BE SECURED WITH YOUR HOME AT ANY
55	55	GIVEN TIME;
56	56	"(L) THE LOAN MUST BE SCHEDULED TO BE REPAID IN PAYMENTS
57	57	THAT EQUAL OR EXCEED THE AMOUNT OF ACCRUED INTEREST FOR EACH PAYMENT
58	58	PERIOD;
59	59	"(M) THE LOAN MAY NOT CLOSE BEFORE 12 DAYS AFTER YOU SUBMIT A
60	60	LOAN APPLICATION TO THE LENDER OR BEFORE 12 DAYS AFTER YOU RECEIVE
61	61	THIS NOTICE, WHICHEVER DATE IS LATER; AND MAY NOT WITHOUT YOUR
62	62	CONSENT CLOSE BEFORE ONE BUSINESS DAY AFTER THE DATE ON WHICH YOU
63	63	RECEIVE A COPY OF YOUR LOAN APPLICATION IF NOT PREVIOUSLY PROVIDED
64	64	AND A FINAL ITEMIZED DISCLOSURE OF THE ACTUAL FEES, POINTS,
65	65	INTEREST, COSTS, AND CHARGES THAT WILL BE CHARGED AT CLOSING; AND IF
66	66	YOUR HOME WAS SECURITY FOR THE SAME TYPE OF LOAN WITHIN THE PAST
67	67	YEAR, A NEW LOAN SECURED BY THE SAME PROPERTY MAY NOT CLOSE BEFORE
68	68	ONE YEAR HAS PASSED FROM THE CLOSING DATE OF THE OTHER LOAN, UNLESS
69	69	ON OATH YOU REQUEST AN EARLIER CLOSING DUE TO A DECLARED STATE OF
70	70	EMERGENCY;
71	71	"(N) THE LOAN MAY CLOSE ONLY AT THE OFFICE OF THE LENDER,
72	72	TITLE COMPANY, OR AN ATTORNEY AT LAW;
73	73	"(O) THE LENDER MAY CHARGE ANY FIXED OR VARIABLE RATE OF
74	74	INTEREST AUTHORIZED BY STATUTE;
75	75	"(P) ONLY A LAWFULLY AUTHORIZED LENDER MAY MAKE LOANS
76	76	DESCRIBED BY SECTION 50(a)(6), ARTICLE XVI, OF THE TEXAS
77	77	CONSTITUTION;
78	78	"(Q) LOANS DESCRIBED BY SECTION 50(a)(6), ARTICLE XVI, OF
79	79	THE TEXAS CONSTITUTION MUST:
80	80	"(1) NOT REQUIRE YOU TO APPLY THE PROCEEDS TO ANOTHER DEBT
81	81	EXCEPT A DEBT THAT IS SECURED BY YOUR HOME OR OWED TO ANOTHER
82	82	LENDER;
83	83	"(2) NOT REQUIRE THAT YOU ASSIGN WAGES AS SECURITY;
84	84	"(3) NOT REQUIRE THAT YOU EXECUTE INSTRUMENTS WHICH HAVE
85	85	BLANKS FOR SUBSTANTIVE TERMS OF AGREEMENT LEFT TO BE FILLED IN;
86	86	"(4) NOT REQUIRE THAT YOU SIGN A CONFESSION OF JUDGMENT OR
87	87	POWER OF ATTORNEY TO ANOTHER PERSON TO CONFESS JUDGMENT OR APPEAR IN
88	88	A LEGAL PROCEEDING ON YOUR BEHALF;
89	89	"(5) PROVIDE THAT YOU RECEIVE A COPY OF YOUR FINAL LOAN
90	90	APPLICATION AND ALL EXECUTED DOCUMENTS YOU SIGN AT CLOSING;
91	91	"(6) PROVIDE THAT THE SECURITY INSTRUMENTS CONTAIN A
92	92	DISCLOSURE THAT THIS LOAN IS A LOAN DEFINED BY SECTION 50(a)(6),
93	93	ARTICLE XVI, OF THE TEXAS CONSTITUTION;
94	94	"(7) PROVIDE THAT WHEN THE LOAN IS PAID IN FULL, THE LENDER
95	95	WILL SIGN AND GIVE YOU A RELEASE OF LIEN OR AN ASSIGNMENT OF THE
96	96	LIEN, WHICHEVER IS APPROPRIATE;
97	97	"(8) PROVIDE THAT YOU MAY, WITHIN 3 DAYS AFTER CLOSING,
98	98	RESCIND THE LOAN WITHOUT PENALTY OR CHARGE;
99	99	"(9) PROVIDE THAT YOU AND THE LENDER ACKNOWLEDGE THE FAIR
100	100	MARKET VALUE OF YOUR HOME ON THE DATE THE LOAN CLOSES; AND
101	101	"(10) PROVIDE THAT THE LENDER WILL FORFEIT ALL PRINCIPAL AND
102	102	INTEREST IF THE LENDER FAILS TO COMPLY WITH THE LENDER'S
103	103	OBLIGATIONS UNLESS THE LENDER CURES THE FAILURE TO COMPLY AS
104	104	PROVIDED BY SECTION 50(a)(6)(Q)(x), ARTICLE XVI, OF THE TEXAS
105	105	CONSTITUTION; AND
106	106	"(R) IF THE LOAN IS A HOME EQUITY LINE OF CREDIT:
107	107	"(1) YOU MAY REQUEST ADVANCES, REPAY MONEY, AND REBORROW
108	108	MONEY UNDER THE LINE OF CREDIT;
109	109	"(2) EACH ADVANCE UNDER THE LINE OF CREDIT MUST BE IN AN
110	110	AMOUNT OF AT LEAST $4,000;
111	111	"(3) YOU MAY NOT USE A CREDIT CARD, DEBIT CARD, OR SIMILAR
112	112	DEVICE, OR PREPRINTED CHECK THAT YOU DID NOT SOLICIT, TO OBTAIN
113	113	ADVANCES UNDER THE LINE OF CREDIT;
114	114	"(4) ANY FEES THE LENDER CHARGES MAY BE CHARGED AND
115	115	COLLECTED ONLY AT THE TIME THE LINE OF CREDIT IS ESTABLISHED AND THE
116	116	LENDER MAY NOT CHARGE A FEE IN CONNECTION WITH ANY ADVANCE;
117	117	"(5) THE MAXIMUM PRINCIPAL AMOUNT THAT MAY BE EXTENDED, WHEN
118	118	ADDED TO ALL OTHER DEBTS SECURED BY YOUR HOME, MAY NOT EXCEED 80
119	119	PERCENT OF THE FAIR MARKET VALUE OF YOUR HOME ON THE DATE THE LINE OF
120	120	CREDIT IS ESTABLISHED;
121	121	"(6) IF THE PRINCIPAL BALANCE UNDER THE LINE OF CREDIT AT
122	122	ANY TIME EXCEEDS 50 PERCENT OF THE FAIR MARKET VALUE OF YOUR HOME,
123	123	AS DETERMINED ON THE DATE THE LINE OF CREDIT IS ESTABLISHED, YOU MAY
124	124	NOT CONTINUE TO REQUEST ADVANCES UNDER THE LINE OF CREDIT UNTIL THE
125	125	BALANCE IS LESS THAN 50 PERCENT OF THE FAIR MARKET VALUE; AND
126	126	"(7) THE LENDER MAY NOT UNILATERALLY AMEND THE TERMS OF THE
127	127	LINE OF CREDIT.
128	128	"THIS NOTICE IS ONLY A SUMMARY OF YOUR RIGHTS UNDER THE TEXAS
129	129	CONSTITUTION. YOUR RIGHTS ARE GOVERNED BY SECTION 50, ARTICLE XVI,
130	130	OF THE TEXAS CONSTITUTION, AND NOT BY THIS NOTICE.
131	131	the lender shall, before closing, provide an additional copy
132	132	of the notice translated into the written language in which the
133	133	discussions were conducted.
134	134	SECTION 2. This proposed constitutional amendment shall be
135	135	submitted to the voters at an election to be held November 5, 2013.
136	136	The ballot shall be printed to provide for voting for or against the
137	137	proposition: "The constitutional amendment to facilitate the
138	138	making of smaller dollar home equity loans by amending the
139	139	limitation of fees that may be charged in making a home equity
140	140	loan."