Texas 2019 - 86th Regular

Texas House Bill HJR111 Compare Versions

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1	1	86R10809 SMH-F
2	2	By: Wilson H.J.R. No. 111
3	3
4	4
5	5	A JOINT RESOLUTION
6	6	proposing a constitutional amendment providing that a residence
7	7	homestead is not subject to seizure or sale for delinquent ad
8	8	valorem taxes.
9	9	BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Sections 13(a), (c), and (d), Article VIII,
11	11	Texas Constitution, are amended to read as follows:
12	12	(a) Except as provided by Section 15(b) of this article,
13	13	provision [Provision] shall be made by the Legislature for the sale
14	14	of a sufficient portion of all lands and other property for the
15	15	taxes due thereon that have not been paid.
16	16	(c) The former owner of [a residence homestead,] land
17	17	designated for agricultural use[,] or a mineral interest sold for
18	18	unpaid taxes shall within two years from date of the filing for
19	19	record of the Purchaser's Deed have the right to redeem the property
20	20	on the following basis:
21	21	(1) Within the first year of the redemption period,
22	22	upon the payment of the amount of money paid for the property,
23	23	including the Tax Deed Recording Fee and all taxes, penalties,
24	24	interest, and costs paid plus an amount not exceeding 25 percent of
25	25	the aggregate total; and
26	26	(2) Within the last year of the redemption period,
27	27	upon the payment of the amount of money paid for the property,
28	28	including the Tax Deed Recording Fee and all taxes, penalties,
29	29	interest, and costs paid plus an amount not exceeding 50 percent of
30	30	the aggregate total.
31	31	(d) If the [residence homestead or] land designated for
32	32	agricultural use is sold pursuant to a suit to enforce the
33	33	collection of the unpaid taxes, the Legislature may limit the
34	34	application of Subsection (c) of this section to [property used as a
35	35	residence homestead when the suit was filed and to] land designated
36	36	for agricultural use when the suit was filed.
37	37	SECTION 2. Section 15, Article VIII, Texas Constitution, is
38	38	amended to read as follows:
39	39	Sec. 15. (a) Except as provided by Subsection (b) of this
40	40	section, the [The] annual assessment made upon landed property
41	41	shall be a special lien thereon; and all property, both real and
42	42	personal, belonging to any delinquent taxpayer shall be liable to
43	43	seizure and sale for the payment of all the taxes and penalties due
44	44	by such delinquent; and such property may be sold for the payment of
45	45	the taxes and penalties due by such delinquent, under such
46	46	regulations as the Legislature may provide.
47	47	(b) A residence homestead is not subject to seizure or sale
48	48	for the payment of delinquent taxes or penalties. The Legislature
49	49	by general law may define residence homestead for purposes of this
50	50	subsection.
51	51	SECTION 3. Sections 50(a), (e), (f), (f-1), (g), (h), (i),
52	52	(j), (k), (q), (r), (t), and (u), Article XVI, Texas Constitution,
53	53	are amended to read as follows:
54	54	(a) The homestead of a family, or of a single adult person,
55	55	shall be, and is hereby protected from forced sale, for the payment
56	56	of all debts except for:
57	57	(1) the purchase money thereof, or a part of such
58	58	purchase money;
59	59	(2) [the taxes due thereon;
60	60	[(3)] an owelty of partition imposed against the
61	61	entirety of the property by a court order or by a written agreement
62	62	of the parties to the partition, including a debt of one spouse in
63	63	favor of the other spouse resulting from a division or an award of a
64	64	family homestead in a divorce proceeding;
65	65	(3) [(4)] the refinance of a lien against a homestead,
66	66	including a federal tax lien resulting from the tax debt of both
67	67	spouses, if the homestead is a family homestead, or from the tax
68	68	debt of the owner;
69	69	(4) [(5)] work and material used in constructing new
70	70	improvements thereon, if contracted for in writing, or work and
71	71	material used to repair or renovate existing improvements thereon
72	72	if:
73	73	(A) the work and material are contracted for in
74	74	writing, with the consent of both spouses, in the case of a family
75	75	homestead, given in the same manner as is required in making a sale
76	76	and conveyance of the homestead;
77	77	(B) the contract for the work and material is not
78	78	executed by the owner or the owner's spouse before the fifth day
79	79	after the owner makes written application for any extension of
80	80	credit for the work and material, unless the work and material are
81	81	necessary to complete immediate repairs to conditions on the
82	82	homestead property that materially affect the health or safety of
83	83	the owner or person residing in the homestead and the owner of the
84	84	homestead acknowledges such in writing;
85	85	(C) the contract for the work and material
86	86	expressly provides that the owner may rescind the contract without
87	87	penalty or charge within three days after the execution of the
88	88	contract by all parties, unless the work and material are necessary
89	89	to complete immediate repairs to conditions on the homestead
90	90	property that materially affect the health or safety of the owner or
91	91	person residing in the homestead and the owner of the homestead
92	92	acknowledges such in writing; and
93	93	(D) the contract for the work and material is
94	94	executed by the owner and the owner's spouse only at the office of a
95	95	third-party lender making an extension of credit for the work and
96	96	material, an attorney at law, or a title company;
97	97	(5) [(6)] an extension of credit that:
98	98	(A) is secured by a voluntary lien on the
99	99	homestead created under a written agreement with the consent of
100	100	each owner and each owner's spouse;
101	101	(B) is of a principal amount that when added to
102	102	the aggregate total of the outstanding principal balances of all
103	103	other indebtedness secured by valid encumbrances of record against
104	104	the homestead does not exceed 80 percent of the fair market value of
105	105	the homestead on the date the extension of credit is made;
106	106	(C) is without recourse for personal liability
107	107	against each owner and the spouse of each owner, unless the owner or
108	108	spouse obtained the extension of credit by actual fraud;
109	109	(D) is secured by a lien that may be foreclosed
110	110	upon only by a court order;
111	111	(E) does not require the owner or the owner's
112	112	spouse to pay, in addition to any interest or any bona fide discount
113	113	points used to buy down the interest rate, any fees to any person
114	114	that are necessary to originate, evaluate, maintain, record,
115	115	insure, or service the extension of credit that exceed, in the
116	116	aggregate, two percent of the original principal amount of the
117	117	extension of credit, excluding fees for:
118	118	(i) an appraisal performed by a third party
119	119	appraiser;
120	120	(ii) a property survey performed by a state
121	121	registered or licensed surveyor;
122	122	(iii) a state base premium for a mortgagee
123	123	policy of title insurance with endorsements established in
124	124	accordance with state law; or
125	125	(iv) a title examination report if its cost
126	126	is less than the state base premium for a mortgagee policy of title
127	127	insurance without endorsements established in accordance with
128	128	state law;
129	129	(F) is not a form of open-end account that may be
130	130	debited from time to time or under which credit may be extended from
131	131	time to time unless the open-end account is a home equity line of
132	132	credit;
133	133	(G) is payable in advance without penalty or
134	134	other charge;
135	135	(H) is not secured by any additional real or
136	136	personal property other than the homestead;
137	137	(I) (repealed);
138	138	(J) may not be accelerated because of a decrease
139	139	in the market value of the homestead or because of the owner's
140	140	default under other indebtedness not secured by a prior valid
141	141	encumbrance against the homestead;
142	142	(K) is the only debt secured by the homestead at
143	143	the time the extension of credit is made unless the other debt was
144	144	made for a purpose described by Subsections (a)(1)-(a)(4)
145	145	[(a)(1)-(a)(5)] or Subsection (a)(7) [(a)(8)] of this section;
146	146	(L) is scheduled to be repaid:
147	147	(i) in substantially equal successive
148	148	periodic installments, not more often than every 14 days and not
149	149	less often than monthly, beginning no later than two months from the
150	150	date the extension of credit is made, each of which equals or
151	151	exceeds the amount of accrued interest as of the date of the
152	152	scheduled installment; or
153	153	(ii) if the extension of credit is a home
154	154	equity line of credit, in periodic payments described under
155	155	Subsection (t)(8) of this section;
156	156	(M) is closed not before:
157	157	(i) the 12th day after the later of the date
158	158	that the owner of the homestead submits a loan application to the
159	159	lender for the extension of credit or the date that the lender
160	160	provides the owner a copy of the notice prescribed by Subsection (g)
161	161	of this section;
162	162	(ii) one business day after the date that
163	163	the owner of the homestead receives a copy of the loan application
164	164	if not previously provided and a final itemized disclosure of the
165	165	actual fees, points, interest, costs, and charges that will be
166	166	charged at closing. If a bona fide emergency or another good cause
167	167	exists and the lender obtains the written consent of the owner, the
168	168	lender may provide the documentation to the owner or the lender may
169	169	modify previously provided documentation on the date of closing;
170	170	and
171	171	(iii) the first anniversary of the closing
172	172	date of any other extension of credit described by Subsection
173	173	(a)(5) [(a)(6)] of this section secured by the same homestead
174	174	property, except a refinance described by Paragraph (Q)(x)(f) of
175	175	this subdivision, unless the owner on oath requests an earlier
176	176	closing due to a state of emergency that:
177	177	(a) has been declared by the president
178	178	of the United States or the governor as provided by law; and
179	179	(b) applies to the area where the
180	180	homestead is located;
181	181	(N) is closed only at the office of the lender, an
182	182	attorney at law, or a title company;
183	183	(O) permits a lender to contract for and receive
184	184	any fixed or variable rate of interest authorized under statute;
185	185	(P) is made by one of the following that has not
186	186	been found by a federal regulatory agency to have engaged in the
187	187	practice of refusing to make loans because the applicants for the
188	188	loans reside or the property proposed to secure the loans is located
189	189	in a certain area:
190	190	(i) a bank, savings and loan association,
191	191	savings bank, or credit union doing business under the laws of this
192	192	state or the United States, including a subsidiary of a bank,
193	193	savings and loan association, savings bank, or credit union
194	194	described by this subparagraph;
195	195	(ii) a federally chartered lending
196	196	instrumentality or a person approved as a mortgagee by the United
197	197	States government to make federally insured loans;
198	198	(iii) a person licensed to make regulated
199	199	loans, as provided by statute of this state;
200	200	(iv) a person who sold the homestead
201	201	property to the current owner and who provided all or part of the
202	202	financing for the purchase;
203	203	(v) a person who is related to the homestead
204	204	property owner within the second degree of affinity or
205	205	consanguinity; or
206	206	(vi) a person regulated by this state as a
207	207	mortgage banker or mortgage company; and
208	208	(Q) is made on the condition that:
209	209	(i) the owner of the homestead is not
210	210	required to apply the proceeds of the extension of credit to repay
211	211	another debt except debt secured by the homestead or debt to another
212	212	lender;
213	213	(ii) the owner of the homestead not assign
214	214	wages as security for the extension of credit;
215	215	(iii) the owner of the homestead not sign
216	216	any instrument in which blanks relating to substantive terms of
217	217	agreement are left to be filled in;
218	218	(iv) the owner of the homestead not sign a
219	219	confession of judgment or power of attorney to the lender or to a
220	220	third person to confess judgment or to appear for the owner in a
221	221	judicial proceeding;
222	222	(v) at the time the extension of credit is
223	223	made, the owner of the homestead shall receive a copy of the final
224	224	loan application and all executed documents signed by the owner at
225	225	closing related to the extension of credit;
226	226	(vi) the security instruments securing the
227	227	extension of credit contain a disclosure that the extension of
228	228	credit is the type of credit defined by Subsection (a)(5) [(a)(6)]
229	229	of this section;
230	230	(vii) within a reasonable time after
231	231	termination and full payment of the extension of credit, the lender
232	232	cancel and return the promissory note to the owner of the homestead
233	233	and give the owner, in recordable form, a release of the lien
234	234	securing the extension of credit or a copy of an endorsement and
235	235	assignment of the lien to a lender that is refinancing the extension
236	236	of credit;
237	237	(viii) the owner of the homestead and any
238	238	spouse of the owner may, within three days after the extension of
239	239	credit is made, rescind the extension of credit without penalty or
240	240	charge;
241	241	(ix) the owner of the homestead and the
242	242	lender sign a written acknowledgment as to the fair market value of
243	243	the homestead property on the date the extension of credit is made;
244	244	(x) except as provided by Subparagraph (xi)
245	245	of this paragraph, the lender or any holder of the note for the
246	246	extension of credit shall forfeit all principal and interest of the
247	247	extension of credit if the lender or holder fails to comply with the
248	248	lender's or holder's obligations under the extension of credit and
249	249	fails to correct the failure to comply not later than the 60th day
250	250	after the date the lender or holder is notified by the borrower of
251	251	the lender's failure to comply by:
252	252	(a) paying to the owner an amount
253	253	equal to any overcharge paid by the owner under or related to the
254	254	extension of credit if the owner has paid an amount that exceeds an
255	255	amount stated in the applicable Paragraph (E), (G), or (O) of this
256	256	subdivision;
257	257	(b) sending the owner a written
258	258	acknowledgement that the lien is valid only in the amount that the
259	259	extension of credit does not exceed the percentage described by
260	260	Paragraph (B) of this subdivision, if applicable, or is not secured
261	261	by property described under Paragraph (H) of this subdivision, if
262	262	applicable;
263	263	(c) sending the owner a written notice
264	264	modifying any other amount, percentage, term, or other provision
265	265	prohibited by this section to a permitted amount, percentage, term,
266	266	or other provision and adjusting the account of the borrower to
267	267	ensure that the borrower is not required to pay more than an amount
268	268	permitted by this section and is not subject to any other term or
269	269	provision prohibited by this section;
270	270	(d) delivering the required documents
271	271	to the borrower if the lender fails to comply with Subparagraph (v)
272	272	of this paragraph or obtaining the appropriate signatures if the
273	273	lender fails to comply with Subparagraph (ix) of this paragraph;
274	274	(e) sending the owner a written
275	275	acknowledgement, if the failure to comply is prohibited by
276	276	Paragraph (K) of this subdivision, that the accrual of interest and
277	277	all of the owner's obligations under the extension of credit are
278	278	abated while any prior lien prohibited under Paragraph (K) remains
279	279	secured by the homestead; or
280	280	(f) if the failure to comply cannot be
281	281	cured under Subparagraphs (x)(a)-(e) of this paragraph, curing the
282	282	failure to comply by a refund or credit to the owner of $1,000 and
283	283	offering the owner the right to refinance the extension of credit
284	284	with the lender or holder for the remaining term of the loan at no
285	285	cost to the owner on the same terms, including interest, as the
286	286	original extension of credit with any modifications necessary to
287	287	comply with this section or on terms on which the owner and the
288	288	lender or holder otherwise agree that comply with this section; and
289	289	(xi) the lender or any holder of the note
290	290	for the extension of credit shall forfeit all principal and
291	291	interest of the extension of credit if the extension of credit is
292	292	made by a person other than a person described under Paragraph (P)
293	293	of this subdivision or if the lien was not created under a written
294	294	agreement with the consent of each owner and each owner's spouse,
295	295	unless each owner and each owner's spouse who did not initially
296	296	consent subsequently consents;
297	297	(6) [(7)] a reverse mortgage; or
298	298	(7) [(8)] the conversion and refinance of a personal
299	299	property lien secured by a manufactured home to a lien on real
300	300	property, including the refinance of the purchase price of the
301	301	manufactured home, the cost of installing the manufactured home on
302	302	the real property, and the refinance of the purchase price of the
303	303	real property.
304	304	(e) A refinance of debt secured by a homestead and described
305	305	by any subsection under Subsections (a)(1)-(a)(4) of this section
306	306	[(a)(1)-(a)(5)] that includes the advance of additional funds may
307	307	not be secured by a valid lien against the homestead unless:
308	308	(1) the refinance of the debt is an extension of credit
309	309	described by Subsection (a)(5) [(a)(6)] of this section; or
310	310	(2) the advance of all the additional funds is for
311	311	reasonable costs necessary to refinance such debt or for a purpose
312	312	described by Subsection (a)(2) or (a)(4) [, (a)(3), or (a)(5)] of
313	313	this section.
314	314	(f) A refinance of debt secured by the homestead, any
315	315	portion of which is an extension of credit described by Subsection
316	316	(a)(5) [(a)(6)] of this section, may not be secured by a valid lien
317	317	against the homestead unless either:
318	318	(1) the refinance of the debt is an extension of credit
319	319	described by Subsection (a)(5) or (a)(6) [or (a)(7)] of this
320	320	section; or
321	321	(2) all of the following conditions are met:
322	322	(A) the refinance is not closed before the first
323	323	anniversary of the date the extension of credit was closed;
324	324	(B) the refinanced extension of credit does not
325	325	include the advance of any additional funds other than:
326	326	(i) funds advanced to refinance a debt
327	327	described by Subsections (a)(1) through (a)(6) [(a)(7)] of this
328	328	section; or
329	329	(ii) actual costs and reserves required by
330	330	the lender to refinance the debt;
331	331	(C) the refinance of the extension of credit is
332	332	of a principal amount that when added to the aggregate total of the
333	333	outstanding principal balances of all other indebtedness secured by
334	334	valid encumbrances of record against the homestead does not exceed
335	335	80 percent of the fair market value of the homestead on the date the
336	336	refinance of the extension of credit is made; and
337	337	(D) the lender provides the owner the following
338	338	written notice on a separate document not later than the third
339	339	business day after the date the owner submits the loan application
340	340	to the lender and at least 12 days before the date the refinance of
341	341	the extension of credit is closed:
342	342	"YOUR EXISTING LOAN THAT YOU DESIRE TO REFINANCE IS A HOME
343	343	EQUITY LOAN. YOU MAY HAVE THE OPTION TO REFINANCE YOUR HOME EQUITY
344	344	LOAN AS EITHER A HOME EQUITY LOAN OR AS A NON-HOME EQUITY LOAN, IF
345	345	OFFERED BY YOUR LENDER.
346	346	"HOME EQUITY LOANS HAVE IMPORTANT CONSUMER PROTECTIONS. A
347	347	LENDER MAY ONLY FORECLOSE A HOME EQUITY LOAN BASED ON A COURT ORDER.
348	348	A HOME EQUITY LOAN MUST BE WITHOUT RECOURSE FOR PERSONAL LIABILITY
349	349	AGAINST YOU AND YOUR SPOUSE.
350	350	"IF YOU HAVE APPLIED TO REFINANCE YOUR EXISTING HOME EQUITY
351	351	LOAN AS A NON-HOME EQUITY LOAN, YOU WILL LOSE CERTAIN CONSUMER
352	352	PROTECTIONS. A NON-HOME EQUITY REFINANCED LOAN:
353	353	"(1) WILL PERMIT THE LENDER TO FORECLOSE WITHOUT A
354	354	COURT ORDER;
355	355	"(2) WILL BE WITH RECOURSE FOR PERSONAL LIABILITY
356	356	AGAINST YOU AND YOUR SPOUSE; AND
357	357	"(3) MAY ALSO CONTAIN OTHER TERMS OR CONDITIONS THAT
358	358	MAY NOT BE PERMITTED IN A TRADITIONAL HOME EQUITY LOAN.
359	359	"BEFORE YOU REFINANCE YOUR EXISTING HOME EQUITY LOAN TO MAKE
360	360	IT A NON-HOME EQUITY LOAN, YOU SHOULD MAKE SURE YOU UNDERSTAND THAT
361	361	YOU ARE WAIVING IMPORTANT PROTECTIONS THAT HOME EQUITY LOANS
362	362	PROVIDE UNDER THE LAW AND SHOULD CONSIDER CONSULTING WITH AN
363	363	ATTORNEY OF YOUR CHOOSING REGARDING THESE PROTECTIONS.
364	364	"YOU MAY WISH TO ASK YOUR LENDER TO REFINANCE YOUR LOAN AS A
365	365	HOME EQUITY LOAN. HOWEVER, A HOME EQUITY LOAN MAY HAVE A HIGHER
366	366	INTEREST RATE AND CLOSING COSTS THAN A NON-HOME EQUITY LOAN."
367	367	(f-1) A lien securing a refinance of debt under Subsection
368	368	(f)(2) of this section is deemed to be a lien described by
369	369	Subsection (a)(3) [(a)(4)] of this section. An affidavit executed
370	370	by the owner or the owner's spouse acknowledging that the
371	371	requirements of Subsection (f)(2) of this section have been met
372	372	conclusively establishes that the requirements of Subsection
373	373	(a)(3) [(a)(4)] of this section have been met.
374	374	(g) An extension of credit described by Subsection (a)(5)
375	375	[(a)(6)] of this section may be secured by a valid lien against
376	376	homestead property if the extension of credit is not closed before
377	377	the 12th day after the lender provides the owner with the following
378	378	written notice on a separate instrument:
379	379	"NOTICE CONCERNING EXTENSIONS OF CREDIT DEFINED BY SECTION
380	380	50(a)(5) [50(a)(6)], ARTICLE XVI, TEXAS CONSTITUTION:
381	381	"SECTION 50(a)(5) [50(a)(6)], ARTICLE XVI, OF THE TEXAS
382	382	CONSTITUTION ALLOWS CERTAIN LOANS TO BE SECURED AGAINST THE EQUITY
383	383	IN YOUR HOME. SUCH LOANS ARE COMMONLY KNOWN AS EQUITY LOANS. IF YOU
384	384	DO NOT REPAY THE LOAN OR IF YOU FAIL TO MEET THE TERMS OF THE LOAN,
385	385	THE LENDER MAY FORECLOSE AND SELL YOUR HOME. THE CONSTITUTION
386	386	PROVIDES THAT:
387	387	"(A) THE LOAN MUST BE VOLUNTARILY CREATED WITH THE CONSENT OF
388	388	EACH OWNER OF YOUR HOME AND EACH OWNER'S SPOUSE;
389	389	"(B) THE PRINCIPAL LOAN AMOUNT AT THE TIME THE LOAN IS MADE
390	390	MUST NOT EXCEED AN AMOUNT THAT, WHEN ADDED TO THE PRINCIPAL BALANCES
391	391	OF ALL OTHER LIENS AGAINST YOUR HOME, IS MORE THAN 80 PERCENT OF THE
392	392	FAIR MARKET VALUE OF YOUR HOME;
393	393	"(C) THE LOAN MUST BE WITHOUT RECOURSE FOR PERSONAL LIABILITY
394	394	AGAINST YOU AND YOUR SPOUSE UNLESS YOU OR YOUR SPOUSE OBTAINED THIS
395	395	EXTENSION OF CREDIT BY ACTUAL FRAUD;
396	396	"(D) THE LIEN SECURING THE LOAN MAY BE FORECLOSED UPON ONLY
397	397	WITH A COURT ORDER;
398	398	"(E) FEES AND CHARGES TO MAKE THE LOAN MAY NOT EXCEED 2
399	399	PERCENT OF THE LOAN AMOUNT, EXCEPT FOR A FEE OR CHARGE FOR AN
400	400	APPRAISAL PERFORMED BY A THIRD PARTY APPRAISER, A PROPERTY SURVEY
401	401	PERFORMED BY A STATE REGISTERED OR LICENSED SURVEYOR, A STATE BASE
402	402	PREMIUM FOR A MORTGAGEE POLICY OF TITLE INSURANCE WITH
403	403	ENDORSEMENTS, OR A TITLE EXAMINATION REPORT;
404	404	"(F) THE LOAN MAY NOT BE AN OPEN-END ACCOUNT THAT MAY BE
405	405	DEBITED FROM TIME TO TIME OR UNDER WHICH CREDIT MAY BE EXTENDED FROM
406	406	TIME TO TIME UNLESS IT IS A HOME EQUITY LINE OF CREDIT;
407	407	"(G) YOU MAY PREPAY THE LOAN WITHOUT PENALTY OR CHARGE;
408	408	"(H) NO ADDITIONAL COLLATERAL MAY BE SECURITY FOR THE LOAN;
409	409	"(I) (repealed);
410	410	"(J) YOU ARE NOT REQUIRED TO REPAY THE LOAN EARLIER THAN
411	411	AGREED SOLELY BECAUSE THE FAIR MARKET VALUE OF YOUR HOME DECREASES
412	412	OR BECAUSE YOU DEFAULT ON ANOTHER LOAN THAT IS NOT SECURED BY YOUR
413	413	HOME;
414	414	"(K) ONLY ONE LOAN DESCRIBED BY SECTION 50(a)(5) [50(a)(6)],
415	415	ARTICLE XVI, OF THE TEXAS CONSTITUTION MAY BE SECURED WITH YOUR HOME
416	416	AT ANY GIVEN TIME;
417	417	"(L) THE LOAN MUST BE SCHEDULED TO BE REPAID IN PAYMENTS THAT
418	418	EQUAL OR EXCEED THE AMOUNT OF ACCRUED INTEREST FOR EACH PAYMENT
419	419	PERIOD;
420	420	"(M) THE LOAN MAY NOT CLOSE BEFORE 12 DAYS AFTER YOU SUBMIT A
421	421	LOAN APPLICATION TO THE LENDER OR BEFORE 12 DAYS AFTER YOU RECEIVE
422	422	THIS NOTICE, WHICHEVER DATE IS LATER; AND MAY NOT WITHOUT YOUR
423	423	CONSENT CLOSE BEFORE ONE BUSINESS DAY AFTER THE DATE ON WHICH YOU
424	424	RECEIVE A COPY OF YOUR LOAN APPLICATION IF NOT PREVIOUSLY PROVIDED
425	425	AND A FINAL ITEMIZED DISCLOSURE OF THE ACTUAL FEES, POINTS,
426	426	INTEREST, COSTS, AND CHARGES THAT WILL BE CHARGED AT CLOSING; AND IF
427	427	YOUR HOME WAS SECURITY FOR THE SAME TYPE OF LOAN WITHIN THE PAST
428	428	YEAR, A NEW LOAN SECURED BY THE SAME PROPERTY MAY NOT CLOSE BEFORE
429	429	ONE YEAR HAS PASSED FROM THE CLOSING DATE OF THE OTHER LOAN, UNLESS
430	430	ON OATH YOU REQUEST AN EARLIER CLOSING DUE TO A DECLARED STATE OF
431	431	EMERGENCY;
432	432	"(N) THE LOAN MAY CLOSE ONLY AT THE OFFICE OF THE LENDER,
433	433	TITLE COMPANY, OR AN ATTORNEY AT LAW;
434	434	"(O) THE LENDER MAY CHARGE ANY FIXED OR VARIABLE RATE OF
435	435	INTEREST AUTHORIZED BY STATUTE;
436	436	"(P) ONLY A LAWFULLY AUTHORIZED LENDER MAY MAKE LOANS
437	437	DESCRIBED BY SECTION 50(a)(5) [50(a)(6)], ARTICLE XVI, OF THE TEXAS
438	438	CONSTITUTION;
439	439	"(Q) LOANS DESCRIBED BY SECTION 50(a)(5) [50(a)(6)], ARTICLE
440	440	XVI, OF THE TEXAS CONSTITUTION MUST:
441	441	"(1) NOT REQUIRE YOU TO APPLY THE PROCEEDS TO ANOTHER DEBT
442	442	EXCEPT A DEBT THAT IS SECURED BY YOUR HOME OR OWED TO ANOTHER
443	443	LENDER;
444	444	"(2) NOT REQUIRE THAT YOU ASSIGN WAGES AS SECURITY;
445	445	"(3) NOT REQUIRE THAT YOU EXECUTE INSTRUMENTS WHICH HAVE
446	446	BLANKS FOR SUBSTANTIVE TERMS OF AGREEMENT LEFT TO BE FILLED IN;
447	447	"(4) NOT REQUIRE THAT YOU SIGN A CONFESSION OF JUDGMENT OR
448	448	POWER OF ATTORNEY TO ANOTHER PERSON TO CONFESS JUDGMENT OR APPEAR IN
449	449	A LEGAL PROCEEDING ON YOUR BEHALF;
450	450	"(5) PROVIDE THAT YOU RECEIVE A COPY OF YOUR FINAL LOAN
451	451	APPLICATION AND ALL EXECUTED DOCUMENTS YOU SIGN AT CLOSING;
452	452	"(6) PROVIDE THAT THE SECURITY INSTRUMENTS CONTAIN A
453	453	DISCLOSURE THAT THIS LOAN IS A LOAN DEFINED BY SECTION 50(a)(5)
454	454	[50(a)(6)], ARTICLE XVI, OF THE TEXAS CONSTITUTION;
455	455	"(7) PROVIDE THAT WHEN THE LOAN IS PAID IN FULL, THE LENDER
456	456	WILL SIGN AND GIVE YOU A RELEASE OF LIEN OR AN ASSIGNMENT OF THE
457	457	LIEN, WHICHEVER IS APPROPRIATE;
458	458	"(8) PROVIDE THAT YOU MAY, WITHIN 3 DAYS AFTER CLOSING,
459	459	RESCIND THE LOAN WITHOUT PENALTY OR CHARGE;
460	460	"(9) PROVIDE THAT YOU AND THE LENDER ACKNOWLEDGE THE FAIR
461	461	MARKET VALUE OF YOUR HOME ON THE DATE THE LOAN CLOSES; AND
462	462	"(10) PROVIDE THAT THE LENDER WILL FORFEIT ALL PRINCIPAL AND
463	463	INTEREST IF THE LENDER FAILS TO COMPLY WITH THE LENDER'S
464	464	OBLIGATIONS UNLESS THE LENDER CURES THE FAILURE TO COMPLY AS
465	465	PROVIDED BY SECTION 50(a)(5)(Q)(x) [50(a)(6)(Q)(x)], ARTICLE XVI,
466	466	OF THE TEXAS CONSTITUTION; AND
467	467	"(R) IF THE LOAN IS A HOME EQUITY LINE OF CREDIT:
468	468	"(1) YOU MAY REQUEST ADVANCES, REPAY MONEY, AND REBORROW
469	469	MONEY UNDER THE LINE OF CREDIT;
470	470	"(2) EACH ADVANCE UNDER THE LINE OF CREDIT MUST BE IN AN
471	471	AMOUNT OF AT LEAST $4,000;
472	472	"(3) YOU MAY NOT USE A CREDIT CARD, DEBIT CARD, OR SIMILAR
473	473	DEVICE, OR PREPRINTED CHECK THAT YOU DID NOT SOLICIT, TO OBTAIN
474	474	ADVANCES UNDER THE LINE OF CREDIT;
475	475	"(4) ANY FEES THE LENDER CHARGES MAY BE CHARGED AND COLLECTED
476	476	ONLY AT THE TIME THE LINE OF CREDIT IS ESTABLISHED AND THE LENDER
477	477	MAY NOT CHARGE A FEE IN CONNECTION WITH ANY ADVANCE;
478	478	"(5) THE MAXIMUM PRINCIPAL AMOUNT THAT MAY BE EXTENDED, WHEN
479	479	ADDED TO ALL OTHER DEBTS SECURED BY YOUR HOME, MAY NOT EXCEED 80
480	480	PERCENT OF THE FAIR MARKET VALUE OF YOUR HOME ON THE DATE THE LINE OF
481	481	CREDIT IS ESTABLISHED;
482	482	"(6) IF THE PRINCIPAL BALANCE UNDER THE LINE OF CREDIT AT ANY
483	483	TIME EXCEEDS 80 PERCENT OF THE FAIR MARKET VALUE OF YOUR HOME, AS
484	484	DETERMINED ON THE DATE THE LINE OF CREDIT IS ESTABLISHED, YOU MAY
485	485	NOT CONTINUE TO REQUEST ADVANCES UNDER THE LINE OF CREDIT UNTIL THE
486	486	BALANCE IS LESS THAN 80 PERCENT OF THE FAIR MARKET VALUE; AND
487	487	"(7) THE LENDER MAY NOT UNILATERALLY AMEND THE TERMS OF THE
488	488	LINE OF CREDIT.
489	489	"THIS NOTICE IS ONLY A SUMMARY OF YOUR RIGHTS UNDER THE TEXAS
490	490	CONSTITUTION. YOUR RIGHTS ARE GOVERNED BY SECTION 50, ARTICLE XVI,
491	491	OF THE TEXAS CONSTITUTION, AND NOT BY THIS NOTICE."
492	492	If the discussions with the borrower are conducted primarily
493	493	in a language other than English, the lender shall, before closing,
494	494	provide an additional copy of the notice translated into the
495	495	written language in which the discussions were conducted.
496	496	(h) A lender or assignee for value may conclusively rely on
497	497	the written acknowledgment as to the fair market value of the
498	498	homestead property made in accordance with Subsection
499	499	(a)(5)(Q)(ix) [(a)(6)(Q)(ix)] of this section if:
500	500	(1) the value acknowledged to is the value estimate in
501	501	an appraisal or evaluation prepared in accordance with a state or
502	502	federal requirement applicable to an extension of credit under
503	503	Subsection (a)(5) of this section [(a)(6)]; and
504	504	(2) the lender or assignee does not have actual
505	505	knowledge at the time of the payment of value or advance of funds by
506	506	the lender or assignee that the fair market value stated in the
507	507	written acknowledgment was incorrect.
508	508	(i) This subsection shall not affect or impair any right of
509	509	the borrower to recover damages from the lender or assignee under
510	510	applicable law for wrongful foreclosure. A purchaser for value
511	511	without actual knowledge may conclusively presume that a lien
512	512	securing an extension of credit described by Subsection (a)(5)
513	513	[(a)(6)] of this section was a valid lien securing the extension of
514	514	credit with homestead property if:
515	515	(1) the security instruments securing the extension of
516	516	credit contain a disclosure that the extension of credit secured by
517	517	the lien was the type of credit defined by Subsection (a)(5) of this
518	518	section [Section 50(a)(6), Article XVI, Texas Constitution];
519	519	(2) the purchaser acquires the title to the property
520	520	pursuant to or after the foreclosure of the voluntary lien; and
521	521	(3) the purchaser is not the lender or assignee under
522	522	the extension of credit.
523	523	(j) Subsection (a)(5) [(a)(6)] and Subsections (e)-(i) of
524	524	this section are not severable, and none of those provisions would
525	525	have been enacted without the others. If any of those provisions
526	526	are held to be preempted by the laws of the United States, all of
527	527	those provisions are invalid. This subsection shall not apply to
528	528	any lien or extension of credit made after January 1, 1998, and
529	529	before the date any provision under Subsection (a)(5) [(a)(6)] or
530	530	Subsections (e)-(i) of this section is held to be preempted.
531	531	(k) "Reverse mortgage" means an extension of credit:
532	532	(1) that is secured by a voluntary lien on homestead
533	533	property created by a written agreement with the consent of each
534	534	owner and each owner's spouse;
535	535	(2) that is made to a person who is or whose spouse is
536	536	62 years or older;
537	537	(3) that is made without recourse for personal
538	538	liability against each owner and the spouse of each owner;
539	539	(4) under which advances are provided to a borrower:
540	540	(A) based on the equity in a borrower's
541	541	homestead; or
542	542	(B) for the purchase of homestead property that
543	543	the borrower will occupy as a principal residence;
544	544	(5) that does not permit the lender to reduce the
545	545	amount or number of advances because of an adjustment in the
546	546	interest rate if periodic advances are to be made;
547	547	(6) that requires no payment of principal or interest
548	548	until:
549	549	(A) all borrowers have died;
550	550	(B) the homestead property securing the loan is
551	551	sold or otherwise transferred;
552	552	(C) all borrowers cease occupying the homestead
553	553	property for a period of longer than 12 consecutive months without
554	554	prior written approval from the lender;
555	555	(C-1) if the extension of credit is used for the
556	556	purchase of homestead property, the borrower fails to timely occupy
557	557	the homestead property as the borrower's principal residence within
558	558	a specified period after the date the extension of credit is made
559	559	that is stipulated in the written agreement creating the lien on the
560	560	property; or
561	561	(D) the borrower:
562	562	(i) defaults on an obligation specified in
563	563	the loan documents to repair and maintain, pay taxes and
564	564	assessments on, or insure the homestead property;
565	565	(ii) commits actual fraud in connection
566	566	with the loan; or
567	567	(iii) fails to maintain the priority of the
568	568	lender's lien on the homestead property, after the lender gives
569	569	notice to the borrower, by promptly discharging any lien that has
570	570	priority or may obtain priority over the lender's lien within 10
571	571	days after the date the borrower receives the notice, unless the
572	572	borrower:
573	573	(a) agrees in writing to the payment
574	574	of the obligation secured by the lien in a manner acceptable to the
575	575	lender;
576	576	(b) contests in good faith the lien
577	577	by, or defends against enforcement of the lien in, legal
578	578	proceedings so as to prevent the enforcement of the lien or
579	579	forfeiture of any part of the homestead property; or
580	580	(c) secures from the holder of the
581	581	lien an agreement satisfactory to the lender subordinating the lien
582	582	to all amounts secured by the lender's lien on the homestead
583	583	property;
584	584	(7) that provides that if the lender fails to make loan
585	585	advances as required in the loan documents and if the lender fails
586	586	to cure the default as required in the loan documents after notice
587	587	from the borrower, the lender forfeits all principal and interest
588	588	of the reverse mortgage, provided, however, that this subdivision
589	589	does not apply when a governmental agency or instrumentality takes
590	590	an assignment of the loan in order to cure the default;
591	591	(8) that is not made unless the prospective borrower
592	592	and the spouse of the prospective borrower attest in writing that
593	593	the prospective borrower and the prospective borrower's spouse
594	594	received counseling regarding the advisability and availability of
595	595	reverse mortgages and other financial alternatives that was
596	596	completed not earlier than the 180th day nor later than the 5th day
597	597	before the date the extension of credit is closed;
598	598	(9) that is not closed before the 12th day after the
599	599	date the lender provides to the prospective borrower the following
600	600	written notice on a separate instrument, which the lender or
601	601	originator and the borrower must sign for the notice to take effect:
602	602	"IMPORTANT NOTICE TO BORROWERS
603	603	RELATED TO YOUR REVERSE MORTGAGE
604	604	"UNDER THE TEXAS TAX CODE, CERTAIN ELDERLY PERSONS MAY DEFER THE
605	605	COLLECTION OF PROPERTY TAXES ON THEIR RESIDENCE HOMESTEAD. BY
606	606	RECEIVING THIS REVERSE MORTGAGE YOU MAY BE REQUIRED TO FORGO ANY
607	607	PREVIOUSLY APPROVED DEFERRAL OF PROPERTY TAX COLLECTION AND YOU MAY
608	608	BE REQUIRED TO PAY PROPERTY TAXES ON AN ANNUAL BASIS ON THIS
609	609	PROPERTY.
610	610	"THE LENDER MAY FORECLOSE THE REVERSE MORTGAGE AND YOU MAY LOSE YOUR
611	611	HOME IF:
612	612	"(A) YOU DO NOT PAY THE TAXES OR OTHER ASSESSMENTS ON THE
613	613	HOME EVEN IF YOU ARE ELIGIBLE TO DEFER PAYMENT OF PROPERTY TAXES;
614	614	"(B) YOU DO NOT MAINTAIN AND PAY FOR PROPERTY INSURANCE ON
615	615	THE HOME AS REQUIRED BY THE LOAN DOCUMENTS;
616	616	"(C) YOU FAIL TO MAINTAIN THE HOME IN A STATE OF GOOD
617	617	CONDITION AND REPAIR;
618	618	"(D) YOU CEASE OCCUPYING THE HOME FOR A PERIOD LONGER THAN
619	619	12 CONSECUTIVE MONTHS WITHOUT THE PRIOR WRITTEN APPROVAL FROM THE
620	620	LENDER OR, IF THE EXTENSION OF CREDIT IS USED FOR THE PURCHASE OF
621	621	THE HOME, YOU FAIL TO TIMELY OCCUPY THE HOME AS YOUR PRINCIPAL
622	622	RESIDENCE WITHIN A PERIOD OF TIME AFTER THE EXTENSION OF CREDIT IS
623	623	MADE THAT IS STIPULATED IN THE WRITTEN AGREEMENT CREATING THE LIEN
624	624	ON THE HOME;
625	625	"(E) YOU SELL THE HOME OR OTHERWISE TRANSFER THE HOME
626	626	WITHOUT PAYING OFF THE LOAN;
627	627	"(F) ALL BORROWERS HAVE DIED AND THE LOAN IS NOT REPAID;
628	628	"(G) YOU COMMIT ACTUAL FRAUD IN CONNECTION WITH THE LOAN; OR
629	629	"(H) YOU FAIL TO MAINTAIN THE PRIORITY OF THE LENDER'S LIEN
630	630	ON THE HOME, AFTER THE LENDER GIVES NOTICE TO YOU, BY PROMPTLY
631	631	DISCHARGING ANY LIEN THAT HAS PRIORITY OR MAY OBTAIN PRIORITY OVER
632	632	THE LENDER'S LIEN WITHIN 10 DAYS AFTER THE DATE YOU RECEIVE THE
633	633	NOTICE, UNLESS YOU:
634	634	"(1) AGREE IN WRITING TO THE PAYMENT OF THE OBLIGATION
635	635	SECURED BY THE LIEN IN A MANNER ACCEPTABLE TO THE LENDER;
636	636	"(2) CONTEST IN GOOD FAITH THE LIEN BY, OR DEFEND
637	637	AGAINST ENFORCEMENT OF THE LIEN IN, LEGAL PROCEEDINGS SO AS TO
638	638	PREVENT THE ENFORCEMENT OF THE LIEN OR FORFEITURE OF ANY PART OF THE
639	639	HOME; OR
640	640	"(3) SECURE FROM THE HOLDER OF THE LIEN AN AGREEMENT
641	641	SATISFACTORY TO THE LENDER SUBORDINATING THE LIEN TO ALL AMOUNTS
642	642	SECURED BY THE LENDER'S LIEN ON THE HOME.
643	643	"IF A GROUND FOR FORECLOSURE EXISTS, THE LENDER MAY NOT COMMENCE
644	644	FORECLOSURE UNTIL THE LENDER GIVES YOU WRITTEN NOTICE BY MAIL THAT A
645	645	GROUND FOR FORECLOSURE EXISTS AND GIVES YOU AN OPPORTUNITY TO
646	646	REMEDY THE CONDITION CREATING THE GROUND FOR FORECLOSURE OR TO PAY
647	647	THE REVERSE MORTGAGE DEBT WITHIN THE TIME PERMITTED BY SECTION
648	648	50(k)(10), ARTICLE XVI, OF THE TEXAS CONSTITUTION. THE LENDER MUST
649	649	OBTAIN A COURT ORDER FOR FORECLOSURE EXCEPT THAT A COURT ORDER IS
650	650	NOT REQUIRED IF THE FORECLOSURE OCCURS BECAUSE:
651	651	"(1) ALL BORROWERS HAVE DIED; OR
652	652	"(2) THE HOMESTEAD PROPERTY SECURING THE LOAN IS SOLD
653	653	OR OTHERWISE TRANSFERRED."
654	654	"YOU SHOULD CONSULT WITH YOUR HOME COUNSELOR OR AN ATTORNEY IF YOU
655	655	HAVE ANY CONCERNS ABOUT THESE OBLIGATIONS BEFORE YOU CLOSE YOUR
656	656	REVERSE MORTGAGE LOAN. TO LOCATE AN ATTORNEY IN YOUR AREA, YOU MAY
657	657	WISH TO CONTACT THE STATE BAR OF TEXAS."
658	658	"THIS NOTICE IS ONLY A SUMMARY OF YOUR RIGHTS UNDER THE TEXAS
659	659	CONSTITUTION. YOUR RIGHTS ARE GOVERNED IN PART BY SECTION 50,
660	660	ARTICLE XVI, OF THE TEXAS CONSTITUTION, AND NOT BY THIS NOTICE.";
661	661	(10) that does not permit the lender to commence
662	662	foreclosure until the lender gives notice to the borrower, in the
663	663	manner provided for a notice by mail related to the foreclosure of
664	664	liens under Subsection (a)(5) [(a)(6)] of this section, that a
665	665	ground for foreclosure exists and gives the borrower at least 30
666	666	days, or at least 20 days in the event of a default under
667	667	Subdivision (6)(D)(iii) of this subsection, to:
668	668	(A) remedy the condition creating the ground for
669	669	foreclosure;
670	670	(B) pay the debt secured by the homestead
671	671	property from proceeds of the sale of the homestead property by the
672	672	borrower or from any other sources; or
673	673	(C) convey the homestead property to the lender
674	674	by a deed in lieu of foreclosure; and
675	675	(11) that is secured by a lien that may be foreclosed
676	676	upon only by a court order, if the foreclosure is for a ground other
677	677	than a ground stated by Subdivision (6)(A) or (B) of this
678	678	subsection.
679	679	(q) To the extent that any statutes of this state, including
680	680	without limitation, Section 41.001 of the Texas Property Code,
681	681	purport to limit encumbrances that may properly be fixed on
682	682	homestead property in a manner that does not permit encumbrances
683	683	for extensions of credit described in Subsection (a)(5) or (a)(6)
684	684	[or (a)(7)] of this section, the same shall be superseded to the
685	685	extent that such encumbrances shall be permitted to be fixed upon
686	686	homestead property in the manner provided for by this amendment.
687	687	(r) The supreme court shall promulgate rules of civil
688	688	procedure for expedited foreclosure proceedings related to the
689	689	foreclosure of liens under Subsection (a)(5) [(a)(6)] of this
690	690	section and to foreclosure of a reverse mortgage lien that requires
691	691	a court order.
692	692	(t) A home equity line of credit is a form of an open-end
693	693	account that may be debited from time to time, under which credit
694	694	may be extended from time to time and under which:
695	695	(1) the owner requests advances, repays money, and
696	696	reborrows money;
697	697	(2) any single debit or advance is not less than
698	698	$4,000;
699	699	(3) the owner does not use a credit card, debit card,
700	700	or similar device, or preprinted check unsolicited by the borrower,
701	701	to obtain an advance;
702	702	(4) any fees described by Subsection (a)(5)(E)
703	703	[(a)(6)(E)] of this section are charged and collected only at the
704	704	time the extension of credit is established and no fee is charged or
705	705	collected in connection with any debit or advance;
706	706	(5) the maximum principal amount that may be extended
707	707	under the account, when added to the aggregate total of the
708	708	outstanding principal balances of all indebtedness secured by the
709	709	homestead on the date the extension of credit is established, does
710	710	not exceed an amount described under Subsection (a)(5)(B)
711	711	[(a)(6)(B)] of this section;
712	712	(6) (repealed);
713	713	(7) the lender or holder may not unilaterally amend
714	714	the extension of credit; and
715	715	(8) repayment is to be made in regular periodic
716	716	installments, not more often than every 14 days and not less often
717	717	than monthly, beginning not later than two months from the date the
718	718	extension of credit is established, and:
719	719	(A) during the period during which the owner may
720	720	request advances, each installment equals or exceeds the amount of
721	721	accrued interest; and
722	722	(B) after the period during which the owner may
723	723	request advances, installments are substantially equal.
724	724	(u) The legislature may by statute delegate one or more
725	725	state agencies the power to interpret Subsections (a)(4)-(a)(6)
726	726	[(a)(5)-(a)(7)], (e)-(p), and (t), of this section. An act or
727	727	omission does not violate a provision included in those subsections
728	728	if the act or omission conforms to an interpretation of the
729	729	provision that is:
730	730	(1) in effect at the time of the act or omission; and
731	731	(2) made by a state agency to which the power of
732	732	interpretation is delegated as provided by this subsection or by an
733	733	appellate court of this state or the United States.
734	734	SECTION 4. This proposed constitutional amendment shall be
735	735	submitted to the voters at an election to be held November 5, 2019.
736	736	The ballot shall be printed to permit voting for or against the
737	737	proposition: "The constitutional amendment providing that a
738	738	residence homestead is not subject to seizure or sale for
739	739	delinquent ad valorem taxes."