Texas 2017 - 85th Regular

Texas House Bill HJR99 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New	Differences
1	1	85R18489 EES-F
2	2	By: Parker, Raymond, Lambert, Longoria, H.J.R. No. 99
3	3	et al.
4	4	Substitute the following for H.J.R. No. 99:
5	5	By: Stephenson C.S.H.J.R. No. 99
6	6
7	7
8	8	A JOINT RESOLUTION
9	9	proposing a constitutional amendment establishing a lower amount
10	10	for expenses that can be charged to a borrower and removing certain
11	11	financing expense limitations for a home equity loan, establishing
12	12	certain authorized lenders to make a home equity loan, changing
13	13	certain options for the refinancing of home equity loans, changing
14	14	the threshold for an advance of a home equity line of credit, and
15	15	allowing home equity loans on agricultural homesteads.
16	16	BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF TEXAS:
17	17	SECTION 1. Section 50, Article XVI, Texas Constitution, is
18	18	amended by amending Subsections (a), (f), (g), and (t) and adding
19	19	Subsection (f-1) to read as follows:
20	20	(a) The homestead of a family, or of a single adult person,
21	21	shall be, and is hereby protected from forced sale, for the payment
22	22	of all debts except for:
23	23	(1) the purchase money thereof, or a part of such
24	24	purchase money;
25	25	(2) the taxes due thereon;
26	26	(3) an owelty of partition imposed against the
27	27	entirety of the property by a court order or by a written agreement
28	28	of the parties to the partition, including a debt of one spouse in
29	29	favor of the other spouse resulting from a division or an award of a
30	30	family homestead in a divorce proceeding;
31	31	(4) the refinance of a lien against a homestead,
32	32	including a federal tax lien resulting from the tax debt of both
33	33	spouses, if the homestead is a family homestead, or from the tax
34	34	debt of the owner;
35	35	(5) work and material used in constructing new
36	36	improvements thereon, if contracted for in writing, or work and
37	37	material used to repair or renovate existing improvements thereon
38	38	if:
39	39	(A) the work and material are contracted for in
40	40	writing, with the consent of both spouses, in the case of a family
41	41	homestead, given in the same manner as is required in making a sale
42	42	and conveyance of the homestead;
43	43	(B) the contract for the work and material is not
44	44	executed by the owner or the owner's spouse before the fifth day
45	45	after the owner makes written application for any extension of
46	46	credit for the work and material, unless the work and material are
47	47	necessary to complete immediate repairs to conditions on the
48	48	homestead property that materially affect the health or safety of
49	49	the owner or person residing in the homestead and the owner of the
50	50	homestead acknowledges such in writing;
51	51	(C) the contract for the work and material
52	52	expressly provides that the owner may rescind the contract without
53	53	penalty or charge within three days after the execution of the
54	54	contract by all parties, unless the work and material are necessary
55	55	to complete immediate repairs to conditions on the homestead
56	56	property that materially affect the health or safety of the owner or
57	57	person residing in the homestead and the owner of the homestead
58	58	acknowledges such in writing; and
59	59	(D) the contract for the work and material is
60	60	executed by the owner and the owner's spouse only at the office of a
61	61	third-party lender making an extension of credit for the work and
62	62	material, an attorney at law, or a title company;
63	63	(6) an extension of credit that:
64	64	(A) is secured by a voluntary lien on the
65	65	homestead created under a written agreement with the consent of
66	66	each owner and each owner's spouse;
67	67	(B) is of a principal amount that when added to
68	68	the aggregate total of the outstanding principal balances of all
69	69	other indebtedness secured by valid encumbrances of record against
70	70	the homestead does not exceed 80 percent of the fair market value of
71	71	the homestead on the date the extension of credit is made;
72	72	(C) is without recourse for personal liability
73	73	against each owner and the spouse of each owner, unless the owner or
74	74	spouse obtained the extension of credit by actual fraud;
75	75	(D) is secured by a lien that may be foreclosed
76	76	upon only by a court order;
77	77	(E) does not require the owner or the owner's
78	78	spouse to pay, in addition to any interest or any bona fide discount
79	79	points used to buy down the interest rate, any fees to any person
80	80	that are necessary to originate, evaluate, maintain, record,
81	81	insure, or service the extension of credit that exceed, in the
82	82	aggregate, two [three] percent of the original principal amount of
83	83	the extension of credit, excluding fees for:
84	84	(i) an appraisal performed by a third party
85	85	appraiser;
86	86	(ii) a property survey performed by a state
87	87	registered or licensed surveyor;
88	88	(iii) a state base premium for a mortgagee
89	89	policy of title insurance with endorsements established in
90	90	accordance with state law; or
91	91	(iv) a title examination report if its cost
92	92	is less than the state base premium for a mortgagee policy of title
93	93	insurance without endorsements established in accordance with
94	94	state law;
95	95	(F) is not a form of open-end account that may be
96	96	debited from time to time or under which credit may be extended from
97	97	time to time unless the open-end account is a home equity line of
98	98	credit;
99	99	(G) is payable in advance without penalty or
100	100	other charge;
101	101	(H) is not secured by any additional real or
102	102	personal property other than the homestead;
103	103	(I) (repealed) [is not secured by homestead
104	104	property that on the date of closing is designated for agricultural
105	105	use as provided by statutes governing property tax, unless such
106	106	homestead property is used primarily for the production of milk];
107	107	(J) may not be accelerated because of a decrease
108	108	in the market value of the homestead or because of the owner's
109	109	default under other indebtedness not secured by a prior valid
110	110	encumbrance against the homestead;
111	111	(K) is the only debt secured by the homestead at
112	112	the time the extension of credit is made unless the other debt was
113	113	made for a purpose described by Subsections (a)(1)-(a)(5) or
114	114	Subsection (a)(8) of this section;
115	115	(L) is scheduled to be repaid:
116	116	(i) in substantially equal successive
117	117	periodic installments, not more often than every 14 days and not
118	118	less often than monthly, beginning no later than two months from the
119	119	date the extension of credit is made, each of which equals or
120	120	exceeds the amount of accrued interest as of the date of the
121	121	scheduled installment; or
122	122	(ii) if the extension of credit is a home
123	123	equity line of credit, in periodic payments described under
124	124	Subsection (t)(8) of this section;
125	125	(M) is closed not before:
126	126	(i) the 12th day after the later of the date
127	127	that the owner of the homestead submits a loan application to the
128	128	lender for the extension of credit or the date that the lender
129	129	provides the owner a copy of the notice prescribed by Subsection (g)
130	130	of this section;
131	131	(ii) one business day after the date that
132	132	the owner of the homestead receives a copy of the loan application
133	133	if not previously provided and a final itemized disclosure of the
134	134	actual fees, points, interest, costs, and charges that will be
135	135	charged at closing. If a bona fide emergency or another good cause
136	136	exists and the lender obtains the written consent of the owner, the
137	137	lender may provide the documentation to the owner or the lender may
138	138	modify previously provided documentation on the date of closing;
139	139	and
140	140	(iii) the first anniversary of the closing
141	141	date of any other extension of credit described by Subsection
142	142	(a)(6) of this section secured by the same homestead property,
143	143	except a refinance described by Paragraph (Q)(x)(f) of this
144	144	subdivision, unless the owner on oath requests an earlier closing
145	145	due to a state of emergency that:
146	146	(a) has been declared by the president
147	147	of the United States or the governor as provided by law; and
148	148	(b) applies to the area where the
149	149	homestead is located;
150	150	(N) is closed only at the office of the lender, an
151	151	attorney at law, or a title company;
152	152	(O) permits a lender to contract for and receive
153	153	any fixed or variable rate of interest authorized under statute;
154	154	(P) is made by one of the following that has not
155	155	been found by a federal regulatory agency to have engaged in the
156	156	practice of refusing to make loans because the applicants for the
157	157	loans reside or the property proposed to secure the loans is located
158	158	in a certain area:
159	159	(i) a bank, savings and loan association,
160	160	savings bank, or credit union doing business under the laws of this
161	161	state or the United States, including a subsidiary of a bank,
162	162	savings and loan association, savings bank, or credit union
163	163	described by this subparagraph;
164	164	(ii) a federally chartered lending
165	165	instrumentality or a person approved as a mortgagee by the United
166	166	States government to make federally insured loans;
167	167	(iii) a person licensed to make regulated
168	168	loans, as provided by statute of this state;
169	169	(iv) a person who sold the homestead
170	170	property to the current owner and who provided all or part of the
171	171	financing for the purchase;
172	172	(v) a person who is related to the homestead
173	173	property owner within the second degree of affinity or
174	174	consanguinity; or
175	175	(vi) a person regulated by this state as a
176	176	mortgage banker or mortgage company [broker]; and
177	177	(Q) is made on the condition that:
178	178	(i) the owner of the homestead is not
179	179	required to apply the proceeds of the extension of credit to repay
180	180	another debt except debt secured by the homestead or debt to another
181	181	lender;
182	182	(ii) the owner of the homestead not assign
183	183	wages as security for the extension of credit;
184	184	(iii) the owner of the homestead not sign
185	185	any instrument in which blanks relating to substantive terms of
186	186	agreement are left to be filled in;
187	187	(iv) the owner of the homestead not sign a
188	188	confession of judgment or power of attorney to the lender or to a
189	189	third person to confess judgment or to appear for the owner in a
190	190	judicial proceeding;
191	191	(v) at the time the extension of credit is
192	192	made, the owner of the homestead shall receive a copy of the final
193	193	loan application and all executed documents signed by the owner at
194	194	closing related to the extension of credit;
195	195	(vi) the security instruments securing the
196	196	extension of credit contain a disclosure that the extension of
197	197	credit is the type of credit defined by Subsection (a)(6) of this
198	198	section [Section 50(a)(6), Article XVI, Texas Constitution];
199	199	(vii) within a reasonable time after
200	200	termination and full payment of the extension of credit, the lender
201	201	cancel and return the promissory note to the owner of the homestead
202	202	and give the owner, in recordable form, a release of the lien
203	203	securing the extension of credit or a copy of an endorsement and
204	204	assignment of the lien to a lender that is refinancing the extension
205	205	of credit;
206	206	(viii) the owner of the homestead and any
207	207	spouse of the owner may, within three days after the extension of
208	208	credit is made, rescind the extension of credit without penalty or
209	209	charge;
210	210	(ix) the owner of the homestead and the
211	211	lender sign a written acknowledgment as to the fair market value of
212	212	the homestead property on the date the extension of credit is made;
213	213	(x) except as provided by Subparagraph (xi)
214	214	of this paragraph, the lender or any holder of the note for the
215	215	extension of credit shall forfeit all principal and interest of the
216	216	extension of credit if the lender or holder fails to comply with the
217	217	lender's or holder's obligations under the extension of credit and
218	218	fails to correct the failure to comply not later than the 60th day
219	219	after the date the lender or holder is notified by the borrower of
220	220	the lender's failure to comply by:
221	221	(a) paying to the owner an amount
222	222	equal to any overcharge paid by the owner under or related to the
223	223	extension of credit if the owner has paid an amount that exceeds an
224	224	amount stated in the applicable Paragraph (E), (G), or (O) of this
225	225	subdivision;
226	226	(b) sending the owner a written
227	227	acknowledgement that the lien is valid only in the amount that the
228	228	extension of credit does not exceed the percentage described by
229	229	Paragraph (B) of this subdivision, if applicable, or is not secured
230	230	by property described under Paragraph (H) [or (I)] of this
231	231	subdivision, if applicable;
232	232	(c) sending the owner a written notice
233	233	modifying any other amount, percentage, term, or other provision
234	234	prohibited by this section to a permitted amount, percentage, term,
235	235	or other provision and adjusting the account of the borrower to
236	236	ensure that the borrower is not required to pay more than an amount
237	237	permitted by this section and is not subject to any other term or
238	238	provision prohibited by this section;
239	239	(d) delivering the required documents
240	240	to the borrower if the lender fails to comply with Subparagraph (v)
241	241	of this paragraph or obtaining the appropriate signatures if the
242	242	lender fails to comply with Subparagraph (ix) of this paragraph;
243	243	(e) sending the owner a written
244	244	acknowledgement, if the failure to comply is prohibited by
245	245	Paragraph (K) of this subdivision, that the accrual of interest and
246	246	all of the owner's obligations under the extension of credit are
247	247	abated while any prior lien prohibited under Paragraph (K) remains
248	248	secured by the homestead; or
249	249	(f) if the failure to comply cannot be
250	250	cured under Subparagraphs (x)(a)-(e) of this paragraph, curing the
251	251	failure to comply by a refund or credit to the owner of $1,000 and
252	252	offering the owner the right to refinance the extension of credit
253	253	with the lender or holder for the remaining term of the loan at no
254	254	cost to the owner on the same terms, including interest, as the
255	255	original extension of credit with any modifications necessary to
256	256	comply with this section or on terms on which the owner and the
257	257	lender or holder otherwise agree that comply with this section; and
258	258	(xi) the lender or any holder of the note
259	259	for the extension of credit shall forfeit all principal and
260	260	interest of the extension of credit if the extension of credit is
261	261	made by a person other than a person described under Paragraph (P)
262	262	of this subdivision or if the lien was not created under a written
263	263	agreement with the consent of each owner and each owner's spouse,
264	264	unless each owner and each owner's spouse who did not initially
265	265	consent subsequently consents;
266	266	(7) a reverse mortgage; or
267	267	(8) the conversion and refinance of a personal
268	268	property lien secured by a manufactured home to a lien on real
269	269	property, including the refinance of the purchase price of the
270	270	manufactured home, the cost of installing the manufactured home on
271	271	the real property, and the refinance of the purchase price of the
272	272	real property.
273	273	(f) A refinance of debt secured by the homestead, any
274	274	portion of which is an extension of credit described by Subsection
275	275	(a)(6) of this section, may not be secured by a valid lien against
276	276	the homestead unless either:
277	277	(1) the refinance of the debt is an extension of credit
278	278	described by Subsection (a)(6) or (a)(7) of this section; or
279	279	(2) all of the following conditions are met:
280	280	(A) the refinance is not closed before the first
281	281	anniversary of the date the extension of credit was closed;
282	282	(B) the refinanced extension of credit does not
283	283	include the advance of any additional funds other than:
284	284	(i) funds advanced to refinance a debt
285	285	described by Subsections (a)(1) through (a)(7) of this section; or
286	286	(ii) actual costs and reserves required by
287	287	the lender to refinance the debt;
288	288	(C) the refinance of the extension of credit is
289	289	of a principal amount that when added to the aggregate total of the
290	290	outstanding principal balances of all other indebtedness secured by
291	291	valid encumbrances of record against the homestead does not exceed
292	292	80 percent of the fair market value of the homestead on the date the
293	293	refinance of the extension of credit is made; and
294	294	(D) the lender provides the owner the following
295	295	written notice on a separate document not later than the third
296	296	business day after the date the owner submits the loan application
297	297	to the lender and at least 12 days before the date the refinance of
298	298	the extension of credit is closed:
299	299	"YOUR EXISTING LOAN THAT YOU DESIRE TO REFINANCE IS A HOME
300	300	EQUITY LOAN. YOU MAY HAVE THE OPTION TO REFINANCE YOUR HOME EQUITY
301	301	LOAN AS EITHER A HOME EQUITY LOAN OR AS A NON-HOME EQUITY LOAN, IF
302	302	OFFERED BY YOUR LENDER.
303	303	"HOME EQUITY LOANS HAVE IMPORTANT CONSUMER PROTECTIONS. A
304	304	LENDER MAY ONLY FORECLOSE A HOME EQUITY LOAN BASED ON A COURT ORDER.
305	305	A HOME EQUITY LOAN MUST BE WITHOUT RECOURSE FOR PERSONAL LIABILITY
306	306	AGAINST YOU AND YOUR SPOUSE.
307	307	"IF YOU HAVE APPLIED TO REFINANCE YOUR EXISTING HOME EQUITY
308	308	LOAN AS A NON-HOME EQUITY LOAN, YOU WILL LOSE CERTAIN CONSUMER
309	309	PROTECTIONS. A NON-HOME EQUITY REFINANCED LOAN:
310	310	"(1) WILL PERMIT THE LENDER TO FORECLOSE WITHOUT A
311	311	COURT ORDER;
312	312	"(2) WILL BE WITH RECOURSE FOR PERSONAL LIABILITY
313	313	AGAINST YOU AND YOUR SPOUSE; AND
314	314	"(3) MAY ALSO CONTAIN OTHER TERMS OR CONDITIONS THAT
315	315	MAY NOT BE PERMITTED IN A TRADITIONAL HOME EQUITY LOAN.
316	316	"BEFORE YOU REFINANCE YOUR EXISTING HOME EQUITY LOAN TO MAKE
317	317	IT A NON-HOME EQUITY LOAN, YOU SHOULD MAKE SURE YOU UNDERSTAND THAT
318	318	YOU ARE WAIVING IMPORTANT PROTECTIONS THAT HOME EQUITY LOANS
319	319	PROVIDE UNDER THE LAW AND SHOULD CONSIDER CONSULTING WITH AN
320	320	ATTORNEY OF YOUR CHOOSING REGARDING THESE PROTECTIONS.
321	321	"YOU MAY WISH TO ASK YOUR LENDER TO REFINANCE YOUR LOAN AS A
322	322	HOME EQUITY LOAN. HOWEVER, A HOME EQUITY LOAN MAY HAVE A HIGHER
323	323	INTEREST RATE AND CLOSING COSTS THAN A NON-HOME EQUITY LOAN."
324	324	(f-1) A lien securing a refinance of debt under Subsection
325	325	(f)(2) of this section is deemed to be a lien described by
326	326	Subsection (a)(4) of this section. An affidavit executed by the
327	327	owner or the owner's spouse acknowledging that the requirements of
328	328	Subsection (f)(2) of this section have been met conclusively
329	329	establishes that the requirements of Subsection (a)(4) of this
330	330	section have been met.
331	331	(g) An extension of credit described by Subsection (a)(6) of
332	332	this section may be secured by a valid lien against homestead
333	333	property if the extension of credit is not closed before the 12th
334	334	day after the lender provides the owner with the following written
335	335	notice on a separate instrument:
336	336	"NOTICE CONCERNING EXTENSIONS OF CREDIT DEFINED BY SECTION
337	337	50(a)(6), ARTICLE XVI, TEXAS CONSTITUTION:
338	338	"SECTION 50(a)(6), ARTICLE XVI, OF THE TEXAS CONSTITUTION
339	339	ALLOWS CERTAIN LOANS TO BE SECURED AGAINST THE EQUITY IN YOUR HOME.
340	340	SUCH LOANS ARE COMMONLY KNOWN AS EQUITY LOANS. IF YOU DO NOT REPAY
341	341	THE LOAN OR IF YOU FAIL TO MEET THE TERMS OF THE LOAN, THE LENDER MAY
342	342	FORECLOSE AND SELL YOUR HOME. THE CONSTITUTION PROVIDES THAT:
343	343	"(A) THE LOAN MUST BE VOLUNTARILY CREATED WITH THE CONSENT OF
344	344	EACH OWNER OF YOUR HOME AND EACH OWNER'S SPOUSE;
345	345	"(B) THE PRINCIPAL LOAN AMOUNT AT THE TIME THE LOAN IS MADE
346	346	MUST NOT EXCEED AN AMOUNT THAT, WHEN ADDED TO THE PRINCIPAL BALANCES
347	347	OF ALL OTHER LIENS AGAINST YOUR HOME, IS MORE THAN 80 PERCENT OF THE
348	348	FAIR MARKET VALUE OF YOUR HOME;
349	349	"(C) THE LOAN MUST BE WITHOUT RECOURSE FOR PERSONAL LIABILITY
350	350	AGAINST YOU AND YOUR SPOUSE UNLESS YOU OR YOUR SPOUSE OBTAINED THIS
351	351	EXTENSION OF CREDIT BY ACTUAL FRAUD;
352	352	"(D) THE LIEN SECURING THE LOAN MAY BE FORECLOSED UPON ONLY
353	353	WITH A COURT ORDER;
354	354	"(E) FEES AND CHARGES TO MAKE THE LOAN MAY NOT EXCEED 2 [3]
355	355	PERCENT OF THE LOAN AMOUNT, EXCEPT FOR A FEE OR CHARGE FOR AN
356	356	APPRAISAL PERFORMED BY A THIRD PARTY APPRAISER, A PROPERTY SURVEY
357	357	PERFORMED BY A STATE REGISTERED OR LICENSED SURVEYOR, A STATE BASE
358	358	PREMIUM FOR A MORTGAGEE POLICY OF TITLE INSURANCE WITH
359	359	ENDORSEMENTS, OR A TITLE EXAMINATION REPORT;
360	360	"(F) THE LOAN MAY NOT BE AN OPEN-END ACCOUNT THAT MAY BE
361	361	DEBITED FROM TIME TO TIME OR UNDER WHICH CREDIT MAY BE EXTENDED FROM
362	362	TIME TO TIME UNLESS IT IS A HOME EQUITY LINE OF CREDIT;
363	363	"(G) YOU MAY PREPAY THE LOAN WITHOUT PENALTY OR CHARGE;
364	364	"(H) NO ADDITIONAL COLLATERAL MAY BE SECURITY FOR THE LOAN;
365	365	"(I) (repealed) [THE LOAN MAY NOT BE SECURED BY HOMESTEAD
366	366	PROPERTY THAT IS DESIGNATED FOR AGRICULTURAL USE AS OF THE DATE OF
367	367	CLOSING, UNLESS THE AGRICULTURAL HOMESTEAD PROPERTY IS USED
368	368	PRIMARILY FOR THE PRODUCTION OF MILK];
369	369	"(J) YOU ARE NOT REQUIRED TO REPAY THE LOAN EARLIER THAN
370	370	AGREED SOLELY BECAUSE THE FAIR MARKET VALUE OF YOUR HOME DECREASES
371	371	OR BECAUSE YOU DEFAULT ON ANOTHER LOAN THAT IS NOT SECURED BY YOUR
372	372	HOME;
373	373	"(K) ONLY ONE LOAN DESCRIBED BY SECTION 50(a)(6), ARTICLE
374	374	XVI, OF THE TEXAS CONSTITUTION MAY BE SECURED WITH YOUR HOME AT ANY
375	375	GIVEN TIME;
376	376	"(L) THE LOAN MUST BE SCHEDULED TO BE REPAID IN PAYMENTS THAT
377	377	EQUAL OR EXCEED THE AMOUNT OF ACCRUED INTEREST FOR EACH PAYMENT
378	378	PERIOD;
379	379	"(M) THE LOAN MAY NOT CLOSE BEFORE 12 DAYS AFTER YOU SUBMIT A
380	380	LOAN APPLICATION TO THE LENDER OR BEFORE 12 DAYS AFTER YOU RECEIVE
381	381	THIS NOTICE, WHICHEVER DATE IS LATER; AND MAY NOT WITHOUT YOUR
382	382	CONSENT CLOSE BEFORE ONE BUSINESS DAY AFTER THE DATE ON WHICH YOU
383	383	RECEIVE A COPY OF YOUR LOAN APPLICATION IF NOT PREVIOUSLY PROVIDED
384	384	AND A FINAL ITEMIZED DISCLOSURE OF THE ACTUAL FEES, POINTS,
385	385	INTEREST, COSTS, AND CHARGES THAT WILL BE CHARGED AT CLOSING; AND IF
386	386	YOUR HOME WAS SECURITY FOR THE SAME TYPE OF LOAN WITHIN THE PAST
387	387	YEAR, A NEW LOAN SECURED BY THE SAME PROPERTY MAY NOT CLOSE BEFORE
388	388	ONE YEAR HAS PASSED FROM THE CLOSING DATE OF THE OTHER LOAN, UNLESS
389	389	ON OATH YOU REQUEST AN EARLIER CLOSING DUE TO A DECLARED STATE OF
390	390	EMERGENCY;
391	391	"(N) THE LOAN MAY CLOSE ONLY AT THE OFFICE OF THE LENDER,
392	392	TITLE COMPANY, OR AN ATTORNEY AT LAW;
393	393	"(O) THE LENDER MAY CHARGE ANY FIXED OR VARIABLE RATE OF
394	394	INTEREST AUTHORIZED BY STATUTE;
395	395	"(P) ONLY A LAWFULLY AUTHORIZED LENDER MAY MAKE LOANS
396	396	DESCRIBED BY SECTION 50(a)(6), ARTICLE XVI, OF THE TEXAS
397	397	CONSTITUTION;
398	398	"(Q) LOANS DESCRIBED BY SECTION 50(a)(6), ARTICLE XVI, OF THE
399	399	TEXAS CONSTITUTION MUST:
400	400	"(1) NOT REQUIRE YOU TO APPLY THE PROCEEDS TO ANOTHER DEBT
401	401	EXCEPT A DEBT THAT IS SECURED BY YOUR HOME OR OWED TO ANOTHER
402	402	LENDER;
403	403	"(2) NOT REQUIRE THAT YOU ASSIGN WAGES AS SECURITY;
404	404	"(3) NOT REQUIRE THAT YOU EXECUTE INSTRUMENTS WHICH HAVE
405	405	BLANKS FOR SUBSTANTIVE TERMS OF AGREEMENT LEFT TO BE FILLED IN;
406	406	"(4) NOT REQUIRE THAT YOU SIGN A CONFESSION OF JUDGMENT OR
407	407	POWER OF ATTORNEY TO ANOTHER PERSON TO CONFESS JUDGMENT OR APPEAR IN
408	408	A LEGAL PROCEEDING ON YOUR BEHALF;
409	409	"(5) PROVIDE THAT YOU RECEIVE A COPY OF YOUR FINAL LOAN
410	410	APPLICATION AND ALL EXECUTED DOCUMENTS YOU SIGN AT CLOSING;
411	411	"(6) PROVIDE THAT THE SECURITY INSTRUMENTS CONTAIN A
412	412	DISCLOSURE THAT THIS LOAN IS A LOAN DEFINED BY SECTION 50(a)(6),
413	413	ARTICLE XVI, OF THE TEXAS CONSTITUTION;
414	414	"(7) PROVIDE THAT WHEN THE LOAN IS PAID IN FULL, THE LENDER
415	415	WILL SIGN AND GIVE YOU A RELEASE OF LIEN OR AN ASSIGNMENT OF THE
416	416	LIEN, WHICHEVER IS APPROPRIATE;
417	417	"(8) PROVIDE THAT YOU MAY, WITHIN 3 DAYS AFTER CLOSING,
418	418	RESCIND THE LOAN WITHOUT PENALTY OR CHARGE;
419	419	"(9) PROVIDE THAT YOU AND THE LENDER ACKNOWLEDGE THE FAIR
420	420	MARKET VALUE OF YOUR HOME ON THE DATE THE LOAN CLOSES; AND
421	421	"(10) PROVIDE THAT THE LENDER WILL FORFEIT ALL PRINCIPAL AND
422	422	INTEREST IF THE LENDER FAILS TO COMPLY WITH THE LENDER'S
423	423	OBLIGATIONS UNLESS THE LENDER CURES THE FAILURE TO COMPLY AS
424	424	PROVIDED BY SECTION 50(a)(6)(Q)(x), ARTICLE XVI, OF THE TEXAS
425	425	CONSTITUTION; AND
426	426	"(R) IF THE LOAN IS A HOME EQUITY LINE OF CREDIT:
427	427	"(1) YOU MAY REQUEST ADVANCES, REPAY MONEY, AND REBORROW
428	428	MONEY UNDER THE LINE OF CREDIT;
429	429	"(2) EACH ADVANCE UNDER THE LINE OF CREDIT MUST BE IN AN
430	430	AMOUNT OF AT LEAST $4,000;
431	431	"(3) YOU MAY NOT USE A CREDIT CARD, DEBIT CARD, OR SIMILAR
432	432	DEVICE, OR PREPRINTED CHECK THAT YOU DID NOT SOLICIT, TO OBTAIN
433	433	ADVANCES UNDER THE LINE OF CREDIT;
434	434	"(4) ANY FEES THE LENDER CHARGES MAY BE CHARGED AND COLLECTED
435	435	ONLY AT THE TIME THE LINE OF CREDIT IS ESTABLISHED AND THE LENDER
436	436	MAY NOT CHARGE A FEE IN CONNECTION WITH ANY ADVANCE;
437	437	"(5) THE MAXIMUM PRINCIPAL AMOUNT THAT MAY BE EXTENDED, WHEN
438	438	ADDED TO ALL OTHER DEBTS SECURED BY YOUR HOME, MAY NOT EXCEED 80
439	439	PERCENT OF THE FAIR MARKET VALUE OF YOUR HOME ON THE DATE THE LINE OF
440	440	CREDIT IS ESTABLISHED;
441	441	"(6) IF THE PRINCIPAL BALANCE UNDER THE LINE OF CREDIT AT ANY
442	442	TIME EXCEEDS 80 [50] PERCENT OF THE FAIR MARKET VALUE OF YOUR HOME,
443	443	AS DETERMINED ON THE DATE THE LINE OF CREDIT IS ESTABLISHED, YOU MAY
444	444	NOT CONTINUE TO REQUEST ADVANCES UNDER THE LINE OF CREDIT UNTIL THE
445	445	BALANCE IS LESS THAN 80 [50] PERCENT OF THE FAIR MARKET VALUE; AND
446	446	"(7) THE LENDER MAY NOT UNILATERALLY AMEND THE TERMS OF THE
447	447	LINE OF CREDIT.
448	448	"THIS NOTICE IS ONLY A SUMMARY OF YOUR RIGHTS UNDER THE TEXAS
449	449	CONSTITUTION. YOUR RIGHTS ARE GOVERNED BY SECTION 50, ARTICLE XVI,
450	450	OF THE TEXAS CONSTITUTION, AND NOT BY THIS NOTICE."
451	451	If the discussions with the borrower are conducted primarily
452	452	in a language other than English, the lender shall, before closing,
453	453	provide an additional copy of the notice translated into the
454	454	written language in which the discussions were conducted.
455	455	(t) A home equity line of credit is a form of an open-end
456	456	account that may be debited from time to time, under which credit
457	457	may be extended from time to time and under which:
458	458	(1) the owner requests advances, repays money, and
459	459	reborrows money;
460	460	(2) any single debit or advance is not less than
461	461	$4,000;
462	462	(3) the owner does not use a credit card, debit card,
463	463	or similar device, or preprinted check unsolicited by the borrower,
464	464	to obtain an advance;
465	465	(4) any fees described by Subsection (a)(6)(E) of this
466	466	section are charged and collected only at the time the extension of
467	467	credit is established and no fee is charged or collected in
468	468	connection with any debit or advance;
469	469	(5) the maximum principal amount that may be extended
470	470	under the account, when added to the aggregate total of the
471	471	outstanding principal balances of all indebtedness secured by the
472	472	homestead on the date the extension of credit is established, does
473	473	not exceed an amount described under Subsection (a)(6)(B) of this
474	474	section;
475	475	(6) (repealed) [no additional debits or advances are
476	476	made if the total principal amount outstanding exceeds an amount
477	477	equal to 50 percent of the fair market value of the homestead as
478	478	determined on the date the account is established];
479	479	(7) the lender or holder may not unilaterally amend
480	480	the extension of credit; and
481	481	(8) repayment is to be made in regular periodic
482	482	installments, not more often than every 14 days and not less often
483	483	than monthly, beginning not later than two months from the date the
484	484	extension of credit is established, and:
485	485	(A) during the period during which the owner may
486	486	request advances, each installment equals or exceeds the amount of
487	487	accrued interest; and
488	488	(B) after the period during which the owner may
489	489	request advances, installments are substantially equal.
490	490	SECTION 2. The following temporary provision is added to
491	491	the Texas Constitution:
492	492	TEMPORARY PROVISION. (a) This temporary provision applies
493	493	to the constitutional amendment proposed by the 85th Legislature,
494	494	Regular Session, 2017, to establish a lower amount for expenses
495	495	that can be charged to a borrower and removing certain financing
496	496	expense limitations for a home equity loan, establishing certain
497	497	authorized lenders to make a home equity loan, changing certain
498	498	options for the refinancing of home equity loans, changing the
499	499	threshold for an advance of a home equity line of credit, and
500	500	allowing home equity loans on agricultural homesteads.
501	501	(b) The constitutional amendment takes effect January 1,
502	502	2018.
503	503	(c) The changes in law made by the constitutional amendment
504	504	apply only to a home equity loan made on or after the effective date
505	505	of the constitutional amendment and to an existing home equity loan
506	506	that is refinanced on or after the effective date of the
507	507	constitutional amendment.
508	508	(d) This temporary provision takes effect on the adoption of
509	509	the constitutional amendment by the voters and expires January 1,
510	510	2019.
511	511	SECTION 3. This proposed constitutional amendment shall be
512	512	submitted to the voters at an election to be held November 7, 2017.
513	513	The ballot shall be printed to provide for voting for or against the
514	514	proposition: "The constitutional amendment to establish a lower
515	515	amount for expenses that can be charged to a borrower and removing
516	516	certain financing expense limitations for a home equity loan,
517	517	establishing certain authorized lenders to make a home equity loan,
518	518	changing certain options for the refinancing of home equity loans,
519	519	changing the threshold for an advance of a home equity line of
520	520	credit, and allowing home equity loans on agricultural homesteads."