Texas 2025 - 89th Regular

Texas House Bill HJR71 Compare Versions

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

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1	1	89R1121 MLH-F
2	2	By: Schofield H.J.R. No. 71
3	3
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5	5
6	6
7	7	A JOINT RESOLUTION
8	8	proposing a constitutional amendment providing that a residence
9	9	homestead is not subject to seizure or sale for delinquent ad
10	10	valorem taxes.
11	11	BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. Sections 13(a), (c), and (d), Article VIII,
13	13	Texas Constitution, are amended to read as follows:
14	14	(a) Except as provided by Section 15(b) of this article,
15	15	provision [Provision] shall be made by the Legislature for the sale
16	16	of a sufficient portion of all lands and other property for the
17	17	taxes due thereon that have not been paid.
18	18	(c) The former owner of [a residence homestead,] land
19	19	designated for agricultural use[,] or a mineral interest sold for
20	20	unpaid taxes shall within two years from date of the filing for
21	21	record of the Purchaser's Deed have the right to redeem the property
22	22	on the following basis:
23	23	(1) Within the first year of the redemption period,
24	24	upon the payment of the amount of money paid for the property,
25	25	including the Tax Deed Recording Fee and all taxes, penalties,
26	26	interest, and costs paid plus an amount not exceeding 25 percent of
27	27	the aggregate total; and
28	28	(2) Within the last year of the redemption period,
29	29	upon the payment of the amount of money paid for the property,
30	30	including the Tax Deed Recording Fee and all taxes, penalties,
31	31	interest, and costs paid plus an amount not exceeding 50 percent of
32	32	the aggregate total.
33	33	(d) If the [residence homestead or] land designated for
34	34	agricultural use is sold pursuant to a suit to enforce the
35	35	collection of the unpaid taxes, the Legislature may limit the
36	36	application of Subsection (c) of this section to [property used as a
37	37	residence homestead when the suit was filed and to] land designated
38	38	for agricultural use when the suit was filed.
39	39	SECTION 2. Section 15, Article VIII, Texas Constitution, is
40	40	amended to read as follows:
41	41	Sec. 15. (a) Except as provided by Subsection (b) of this
42	42	section, the [The] annual assessment made upon landed property
43	43	shall be a special lien thereon; and all property, both real and
44	44	personal, belonging to any delinquent tax payer shall be liable to
45	45	seizure and sale for the payment of all the taxes and penalties due
46	46	by such delinquent; and such property may be sold for the payment of
47	47	the taxes and penalties due by such delinquent, under such
48	48	regulations as the Legislature may provide.
49	49	(b) A residence homestead is not subject to seizure or sale
50	50	for the payment of delinquent taxes or penalties. The Legislature
51	51	by general law may define residence homestead for purposes of this
52	52	subsection.
53	53	SECTION 3. Sections 50(a), (e), (f), (f-1), (g), (h), (i),
54	54	(j), (k), (q), (r), (t), and (u), Article XVI, Texas Constitution,
55	55	are amended to read as follows:
56	56	(a) The homestead of a family, or of a single adult person,
57	57	shall be, and is hereby protected from forced sale, for the payment
58	58	of all debts except for:
59	59	(1) the purchase money thereof, or a part of such
60	60	purchase money;
61	61	(2) [the taxes due thereon;
62	62	[(3)] an owelty of partition imposed against the
63	63	entirety of the property by a court order or by a written agreement
64	64	of the parties to the partition, including a debt of one spouse in
65	65	favor of the other spouse resulting from a division or an award of a
66	66	family homestead in a divorce proceeding;
67	67	(3) [(4)] the refinance of a lien against a homestead,
68	68	including a federal tax lien resulting from the tax debt of both
69	69	spouses, if the homestead is a family homestead, or from the tax
70	70	debt of the owner;
71	71	(4) [(5)] work and material used in constructing new
72	72	improvements thereon, if contracted for in writing, or work and
73	73	material used to repair or renovate existing improvements thereon
74	74	if:
75	75	(A) the work and material are contracted for in
76	76	writing, with the consent of both spouses, in the case of a family
77	77	homestead, given in the same manner as is required in making a sale
78	78	and conveyance of the homestead;
79	79	(B) the contract for the work and material is not
80	80	executed by the owner or the owner's spouse before the fifth day
81	81	after the owner makes written application for any extension of
82	82	credit for the work and material, unless the work and material are
83	83	necessary to complete immediate repairs to conditions on the
84	84	homestead property that materially affect the health or safety of
85	85	the owner or person residing in the homestead and the owner of the
86	86	homestead acknowledges such in writing;
87	87	(C) the contract for the work and material
88	88	expressly provides that the owner may rescind the contract without
89	89	penalty or charge within three days after the execution of the
90	90	contract by all parties, unless the work and material are necessary
91	91	to complete immediate repairs to conditions on the homestead
92	92	property that materially affect the health or safety of the owner or
93	93	person residing in the homestead and the owner of the homestead
94	94	acknowledges such in writing; and
95	95	(D) the contract for the work and material is
96	96	executed by the owner and the owner's spouse only at the office of a
97	97	third-party lender making an extension of credit for the work and
98	98	material, an attorney at law, or a title company;
99	99	(5) [(6)] an extension of credit that:
100	100	(A) is secured by a voluntary lien on the
101	101	homestead created under a written agreement with the consent of
102	102	each owner and each owner's spouse;
103	103	(B) is of a principal amount that when added to
104	104	the aggregate total of the outstanding principal balances of all
105	105	other indebtedness secured by valid encumbrances of record against
106	106	the homestead does not exceed 80 percent of the fair market value of
107	107	the homestead on the date the extension of credit is made;
108	108	(C) is without recourse for personal liability
109	109	against each owner and the spouse of each owner, unless the owner or
110	110	spouse obtained the extension of credit by actual fraud;
111	111	(D) is secured by a lien that may be foreclosed
112	112	upon only by a court order;
113	113	(E) does not require the owner or the owner's
114	114	spouse to pay, in addition to any interest or any bona fide discount
115	115	points used to buy down the interest rate, any fees to any person
116	116	that are necessary to originate, evaluate, maintain, record,
117	117	insure, or service the extension of credit that exceed, in the
118	118	aggregate, two percent of the original principal amount of the
119	119	extension of credit, excluding fees for:
120	120	(i) an appraisal performed by a third party
121	121	appraiser;
122	122	(ii) a property survey performed by a state
123	123	registered or licensed surveyor;
124	124	(iii) a state base premium for a mortgagee
125	125	policy of title insurance with endorsements established in
126	126	accordance with state law; or
127	127	(iv) a title examination report if its cost
128	128	is less than the state base premium for a mortgagee policy of title
129	129	insurance without endorsements established in accordance with
130	130	state law;
131	131	(F) is not a form of open-end account that may be
132	132	debited from time to time or under which credit may be extended from
133	133	time to time unless the open-end account is a home equity line of
134	134	credit;
135	135	(G) is payable in advance without penalty or
136	136	other charge;
137	137	(H) is not secured by any additional real or
138	138	personal property other than the homestead;
139	139	(I) (repealed);
140	140	(J) may not be accelerated because of a decrease
141	141	in the market value of the homestead or because of the owner's
142	142	default under other indebtedness not secured by a prior valid
143	143	encumbrance against the homestead;
144	144	(K) is the only debt secured by the homestead at
145	145	the time the extension of credit is made unless the other debt was
146	146	made for a purpose described by Subsections (a)(1)-(a)(4)
147	147	[(a)(1)-(a)(5)] or Subsection (a)(7) [(a)(8)] of this section;
148	148	(L) is scheduled to be repaid:
149	149	(i) in substantially equal successive
150	150	periodic installments, not more often than every 14 days and not
151	151	less often than monthly, beginning no later than two months from the
152	152	date the extension of credit is made, each of which equals or
153	153	exceeds the amount of accrued interest as of the date of the
154	154	scheduled installment; or
155	155	(ii) if the extension of credit is a home
156	156	equity line of credit, in periodic payments described under
157	157	Subsection (t)(8) of this section;
158	158	(M) is closed not before:
159	159	(i) the 12th day after the later of the date
160	160	that the owner of the homestead submits a loan application to the
161	161	lender for the extension of credit or the date that the lender
162	162	provides the owner a copy of the notice prescribed by Subsection (g)
163	163	of this section;
164	164	(ii) one business day after the date that
165	165	the owner of the homestead receives a copy of the loan application
166	166	if not previously provided and a final itemized disclosure of the
167	167	actual fees, points, interest, costs, and charges that will be
168	168	charged at closing. If a bona fide emergency or another good cause
169	169	exists and the lender obtains the written consent of the owner, the
170	170	lender may provide the documentation to the owner or the lender may
171	171	modify previously provided documentation on the date of closing;
172	172	and
173	173	(iii) the first anniversary of the closing
174	174	date of any other extension of credit described by Subsection
175	175	(a)(5) [(a)(6)] of this section secured by the same homestead
176	176	property, except a refinance described by Paragraph (Q)(x)(f) of
177	177	this subdivision, unless the owner on oath requests an earlier
178	178	closing due to a state of emergency that:
179	179	(a) has been declared by the president
180	180	of the United States or the governor as provided by law; and
181	181	(b) applies to the area where the
182	182	homestead is located;
183	183	(N) is closed only at the office of the lender, an
184	184	attorney at law, or a title company;
185	185	(O) permits a lender to contract for and receive
186	186	any fixed or variable rate of interest authorized under statute;
187	187	(P) is made by one of the following that has not
188	188	been found by a federal regulatory agency to have engaged in the
189	189	practice of refusing to make loans because the applicants for the
190	190	loans reside or the property proposed to secure the loans is located
191	191	in a certain area:
192	192	(i) a bank, savings and loan association,
193	193	savings bank, or credit union doing business under the laws of this
194	194	state or the United States, including a subsidiary of a bank,
195	195	savings and loan association, savings bank, or credit union
196	196	described by this subparagraph;
197	197	(ii) a federally chartered lending
198	198	instrumentality or a person approved as a mortgagee by the United
199	199	States government to make federally insured loans;
200	200	(iii) a person licensed to make regulated
201	201	loans, as provided by statute of this state;
202	202	(iv) a person who sold the homestead
203	203	property to the current owner and who provided all or part of the
204	204	financing for the purchase;
205	205	(v) a person who is related to the homestead
206	206	property owner within the second degree of affinity or
207	207	consanguinity; or
208	208	(vi) a person regulated by this state as a
209	209	mortgage banker or mortgage company; and
210	210	(Q) is made on the condition that:
211	211	(i) the owner of the homestead is not
212	212	required to apply the proceeds of the extension of credit to repay
213	213	another debt except debt secured by the homestead or debt to another
214	214	lender;
215	215	(ii) the owner of the homestead not assign
216	216	wages as security for the extension of credit;
217	217	(iii) the owner of the homestead not sign
218	218	any instrument in which blanks relating to substantive terms of
219	219	agreement are left to be filled in;
220	220	(iv) the owner of the homestead not sign a
221	221	confession of judgment or power of attorney to the lender or to a
222	222	third person to confess judgment or to appear for the owner in a
223	223	judicial proceeding;
224	224	(v) at the time the extension of credit is
225	225	made, the owner of the homestead shall receive a copy of the final
226	226	loan application and all executed documents signed by the owner at
227	227	closing related to the extension of credit;
228	228	(vi) the security instruments securing the
229	229	extension of credit contain a disclosure that the extension of
230	230	credit is the type of credit defined by Subsection (a)(5) [(a)(6)]
231	231	of this section;
232	232	(vii) within a reasonable time after
233	233	termination and full payment of the extension of credit, the lender
234	234	cancel and return the promissory note to the owner of the homestead
235	235	and give the owner, in recordable form, a release of the lien
236	236	securing the extension of credit or a copy of an endorsement and
237	237	assignment of the lien to a lender that is refinancing the extension
238	238	of credit;
239	239	(viii) the owner of the homestead and any
240	240	spouse of the owner may, within three days after the extension of
241	241	credit is made, rescind the extension of credit without penalty or
242	242	charge;
243	243	(ix) the owner of the homestead and the
244	244	lender sign a written acknowledgment as to the fair market value of
245	245	the homestead property on the date the extension of credit is made;
246	246	(x) except as provided by Subparagraph (xi)
247	247	of this paragraph, the lender or any holder of the note for the
248	248	extension of credit shall forfeit all principal and interest of the
249	249	extension of credit if the lender or holder fails to comply with the
250	250	lender's or holder's obligations under the extension of credit and
251	251	fails to correct the failure to comply not later than the 60th day
252	252	after the date the lender or holder is notified by the borrower of
253	253	the lender's failure to comply by:
254	254	(a) paying to the owner an amount
255	255	equal to any overcharge paid by the owner under or related to the
256	256	extension of credit if the owner has paid an amount that exceeds an
257	257	amount stated in the applicable Paragraph (E), (G), or (O) of this
258	258	subdivision;
259	259	(b) sending the owner a written
260	260	acknowledgement that the lien is valid only in the amount that the
261	261	extension of credit does not exceed the percentage described by
262	262	Paragraph (B) of this subdivision, if applicable, or is not secured
263	263	by property described under Paragraph (H) of this subdivision, if
264	264	applicable;
265	265	(c) sending the owner a written notice
266	266	modifying any other amount, percentage, term, or other provision
267	267	prohibited by this section to a permitted amount, percentage, term,
268	268	or other provision and adjusting the account of the borrower to
269	269	ensure that the borrower is not required to pay more than an amount
270	270	permitted by this section and is not subject to any other term or
271	271	provision prohibited by this section;
272	272	(d) delivering the required documents
273	273	to the borrower if the lender fails to comply with Subparagraph (v)
274	274	of this paragraph or obtaining the appropriate signatures if the
275	275	lender fails to comply with Subparagraph (ix) of this paragraph;
276	276	(e) sending the owner a written
277	277	acknowledgement, if the failure to comply is prohibited by
278	278	Paragraph (K) of this subdivision, that the accrual of interest and
279	279	all of the owner's obligations under the extension of credit are
280	280	abated while any prior lien prohibited under Paragraph (K) remains
281	281	secured by the homestead; or
282	282	(f) if the failure to comply cannot be
283	283	cured under Sub-subparagraphs (a)-(e) [Subparagraphs (x)(a)-(e)]
284	284	of this subparagraph [paragraph], curing the failure to comply by a
285	285	refund or credit to the owner of $1,000 and offering the owner the
286	286	right to refinance the extension of credit with the lender or holder
287	287	for the remaining term of the loan at no cost to the owner on the
288	288	same terms, including interest, as the original extension of credit
289	289	with any modifications necessary to comply with this section or on
290	290	terms on which the owner and the lender or holder otherwise agree
291	291	that comply with this section; and
292	292	(xi) the lender or any holder of the note
293	293	for the extension of credit shall forfeit all principal and
294	294	interest of the extension of credit if the extension of credit is
295	295	made by a person other than a person described under Paragraph (P)
296	296	of this subdivision or if the lien was not created under a written
297	297	agreement with the consent of each owner and each owner's spouse,
298	298	unless each owner and each owner's spouse who did not initially
299	299	consent subsequently consents;
300	300	(6) [(7)] a reverse mortgage; or
301	301	(7) [(8)] the conversion and refinance of a personal
302	302	property lien secured by a manufactured home to a lien on real
303	303	property, including the refinance of the purchase price of the
304	304	manufactured home, the cost of installing the manufactured home on
305	305	the real property, and the refinance of the purchase price of the
306	306	real property.
307	307	(e) A refinance of debt secured by a homestead and described
308	308	by any subsection under Subsections (a)(1)-(a)(4) of this section
309	309	[(a)(1)-(a)(5)] that includes the advance of additional funds may
310	310	not be secured by a valid lien against the homestead unless:
311	311	(1) the refinance of the debt is an extension of credit
312	312	described by Subsection (a)(5) [(a)(6)] of this section; or
313	313	(2) the advance of all the additional funds is for
314	314	reasonable costs necessary to refinance such debt or for a purpose
315	315	described by Subsection (a)(2) or (a)(4) [, (a)(3), or (a)(5)] of
316	316	this section.
317	317	(f) A refinance of debt secured by the homestead, any
318	318	portion of which is an extension of credit described by Subsection
319	319	(a)(5) [(a)(6)] of this section, may not be secured by a valid lien
320	320	against the homestead unless either:
321	321	(1) the refinance of the debt is an extension of credit
322	322	described by Subsection (a)(5) or (a)(6) [or (a)(7)] of this
323	323	section; or
324	324	(2) all of the following conditions are met:
325	325	(A) the refinance is not closed before the first
326	326	anniversary of the date the extension of credit was closed;
327	327	(B) the refinanced extension of credit does not
328	328	include the advance of any additional funds other than:
329	329	(i) funds advanced to refinance a debt
330	330	described by Subsections (a)(1) through (a)(6) [(a)(7)] of this
331	331	section; or
332	332	(ii) actual costs and reserves required by
333	333	the lender to refinance the debt;
334	334	(C) the refinance of the extension of credit is
335	335	of a principal amount that when added to the aggregate total of the
336	336	outstanding principal balances of all other indebtedness secured by
337	337	valid encumbrances of record against the homestead does not exceed
338	338	80 percent of the fair market value of the homestead on the date the
339	339	refinance of the extension of credit is made; and
340	340	(D) the lender provides the owner the following
341	341	written notice on a separate document not later than the third
342	342	business day after the date the owner submits the loan application
343	343	to the lender and at least 12 days before the date the refinance of
344	344	the extension of credit is closed:
345	345	"YOUR EXISTING LOAN THAT YOU DESIRE TO REFINANCE IS A HOME
346	346	EQUITY LOAN. YOU MAY HAVE THE OPTION TO REFINANCE YOUR HOME EQUITY
347	347	LOAN AS EITHER A HOME EQUITY LOAN OR AS A NON-HOME EQUITY LOAN, IF
348	348	OFFERED BY YOUR LENDER.
349	349	"HOME EQUITY LOANS HAVE IMPORTANT CONSUMER PROTECTIONS. A
350	350	LENDER MAY ONLY FORECLOSE A HOME EQUITY LOAN BASED ON A COURT ORDER.
351	351	A HOME EQUITY LOAN MUST BE WITHOUT RECOURSE FOR PERSONAL LIABILITY
352	352	AGAINST YOU AND YOUR SPOUSE.
353	353	"IF YOU HAVE APPLIED TO REFINANCE YOUR EXISTING HOME EQUITY
354	354	LOAN AS A NON-HOME EQUITY LOAN, YOU WILL LOSE CERTAIN CONSUMER
355	355	PROTECTIONS. A NON-HOME EQUITY REFINANCED LOAN:
356	356	"(1) WILL PERMIT THE LENDER TO FORECLOSE WITHOUT A
357	357	COURT ORDER;
358	358	"(2) WILL BE WITH RECOURSE FOR PERSONAL LIABILITY
359	359	AGAINST YOU AND YOUR SPOUSE; AND
360	360	"(3) MAY ALSO CONTAIN OTHER TERMS OR CONDITIONS THAT
361	361	MAY NOT BE PERMITTED IN A TRADITIONAL HOME EQUITY LOAN.
362	362	"BEFORE YOU REFINANCE YOUR EXISTING HOME EQUITY LOAN TO MAKE
363	363	IT A NON-HOME EQUITY LOAN, YOU SHOULD MAKE SURE YOU UNDERSTAND THAT
364	364	YOU ARE WAIVING IMPORTANT PROTECTIONS THAT HOME EQUITY LOANS
365	365	PROVIDE UNDER THE LAW AND SHOULD CONSIDER CONSULTING WITH AN
366	366	ATTORNEY OF YOUR CHOOSING REGARDING THESE PROTECTIONS.
367	367	"YOU MAY WISH TO ASK YOUR LENDER TO REFINANCE YOUR LOAN AS A
368	368	HOME EQUITY LOAN. HOWEVER, A HOME EQUITY LOAN MAY HAVE A HIGHER
369	369	INTEREST RATE AND CLOSING COSTS THAN A NON-HOME EQUITY LOAN."
370	370	(f-1) A lien securing a refinance of debt under Subsection
371	371	(f)(2) of this section is deemed to be a lien described by
372	372	Subsection (a)(3) [(a)(4)] of this section. An affidavit executed
373	373	by the owner or the owner's spouse acknowledging that the
374	374	requirements of Subsection (f)(2) of this section have been met
375	375	conclusively establishes that the requirements of Subsection
376	376	(a)(3) [(a)(4)] of this section have been met.
377	377	(g) An extension of credit described by Subsection (a)(5)
378	378	[(a)(6)] of this section may be secured by a valid lien against
379	379	homestead property if the extension of credit is not closed before
380	380	the 12th day after the lender provides the owner with the following
381	381	written notice on a separate instrument:
382	382	"NOTICE CONCERNING EXTENSIONS OF CREDIT DEFINED BY SECTION
383	383	50(a)(5) [50(a)(6)], ARTICLE XVI, TEXAS CONSTITUTION:
384	384	"SECTION 50(a)(5) [50(a)(6)], ARTICLE XVI, OF THE TEXAS
385	385	CONSTITUTION ALLOWS CERTAIN LOANS TO BE SECURED AGAINST THE EQUITY
386	386	IN YOUR HOME. SUCH LOANS ARE COMMONLY KNOWN AS EQUITY LOANS. IF YOU
387	387	DO NOT REPAY THE LOAN OR IF YOU FAIL TO MEET THE TERMS OF THE LOAN,
388	388	THE LENDER MAY FORECLOSE AND SELL YOUR HOME. THE CONSTITUTION
389	389	PROVIDES THAT:
390	390	"(A) THE LOAN MUST BE VOLUNTARILY CREATED WITH THE CONSENT OF
391	391	EACH OWNER OF YOUR HOME AND EACH OWNER'S SPOUSE;
392	392	"(B) THE PRINCIPAL LOAN AMOUNT AT THE TIME THE LOAN IS MADE
393	393	MUST NOT EXCEED AN AMOUNT THAT, WHEN ADDED TO THE PRINCIPAL BALANCES
394	394	OF ALL OTHER LIENS AGAINST YOUR HOME, IS MORE THAN 80 PERCENT OF THE
395	395	FAIR MARKET VALUE OF YOUR HOME;
396	396	"(C) THE LOAN MUST BE WITHOUT RECOURSE FOR PERSONAL LIABILITY
397	397	AGAINST YOU AND YOUR SPOUSE UNLESS YOU OR YOUR SPOUSE OBTAINED THIS
398	398	EXTENSION OF CREDIT BY ACTUAL FRAUD;
399	399	"(D) THE LIEN SECURING THE LOAN MAY BE FORECLOSED UPON ONLY
400	400	WITH A COURT ORDER;
401	401	"(E) FEES AND CHARGES TO MAKE THE LOAN MAY NOT EXCEED 2
402	402	PERCENT OF THE LOAN AMOUNT, EXCEPT FOR A FEE OR CHARGE FOR AN
403	403	APPRAISAL PERFORMED BY A THIRD PARTY APPRAISER, A PROPERTY SURVEY
404	404	PERFORMED BY A STATE REGISTERED OR LICENSED SURVEYOR, A STATE BASE
405	405	PREMIUM FOR A MORTGAGEE POLICY OF TITLE INSURANCE WITH
406	406	ENDORSEMENTS, OR A TITLE EXAMINATION REPORT;
407	407	"(F) THE LOAN MAY NOT BE AN OPEN-END ACCOUNT THAT MAY BE
408	408	DEBITED FROM TIME TO TIME OR UNDER WHICH CREDIT MAY BE EXTENDED FROM
409	409	TIME TO TIME UNLESS IT IS A HOME EQUITY LINE OF CREDIT;
410	410	"(G) YOU MAY PREPAY THE LOAN WITHOUT PENALTY OR CHARGE;
411	411	"(H) NO ADDITIONAL COLLATERAL MAY BE SECURITY FOR THE LOAN;
412	412	"(I) (repealed);
413	413	"(J) YOU ARE NOT REQUIRED TO REPAY THE LOAN EARLIER THAN
414	414	AGREED SOLELY BECAUSE THE FAIR MARKET VALUE OF YOUR HOME DECREASES
415	415	OR BECAUSE YOU DEFAULT ON ANOTHER LOAN THAT IS NOT SECURED BY YOUR
416	416	HOME;
417	417	"(K) ONLY ONE LOAN DESCRIBED BY SECTION 50(a)(5) [50(a)(6)],
418	418	ARTICLE XVI, OF THE TEXAS CONSTITUTION MAY BE SECURED WITH YOUR HOME
419	419	AT ANY GIVEN TIME;
420	420	"(L) THE LOAN MUST BE SCHEDULED TO BE REPAID IN PAYMENTS THAT
421	421	EQUAL OR EXCEED THE AMOUNT OF ACCRUED INTEREST FOR EACH PAYMENT
422	422	PERIOD;
423	423	"(M) THE LOAN MAY NOT CLOSE BEFORE 12 DAYS AFTER YOU SUBMIT A
424	424	LOAN APPLICATION TO THE LENDER OR BEFORE 12 DAYS AFTER YOU RECEIVE
425	425	THIS NOTICE, WHICHEVER DATE IS LATER; AND MAY NOT WITHOUT YOUR
426	426	CONSENT CLOSE BEFORE ONE BUSINESS DAY AFTER THE DATE ON WHICH YOU
427	427	RECEIVE A COPY OF YOUR LOAN APPLICATION IF NOT PREVIOUSLY PROVIDED
428	428	AND A FINAL ITEMIZED DISCLOSURE OF THE ACTUAL FEES, POINTS,
429	429	INTEREST, COSTS, AND CHARGES THAT WILL BE CHARGED AT CLOSING; AND IF
430	430	YOUR HOME WAS SECURITY FOR THE SAME TYPE OF LOAN WITHIN THE PAST
431	431	YEAR, A NEW LOAN SECURED BY THE SAME PROPERTY MAY NOT CLOSE BEFORE
432	432	ONE YEAR HAS PASSED FROM THE CLOSING DATE OF THE OTHER LOAN, UNLESS
433	433	ON OATH YOU REQUEST AN EARLIER CLOSING DUE TO A DECLARED STATE OF
434	434	EMERGENCY;
435	435	"(N) THE LOAN MAY CLOSE ONLY AT THE OFFICE OF THE LENDER,
436	436	TITLE COMPANY, OR AN ATTORNEY AT LAW;
437	437	"(O) THE LENDER MAY CHARGE ANY FIXED OR VARIABLE RATE OF
438	438	INTEREST AUTHORIZED BY STATUTE;
439	439	"(P) ONLY A LAWFULLY AUTHORIZED LENDER MAY MAKE LOANS
440	440	DESCRIBED BY SECTION 50(a)(5) [50(a)(6)], ARTICLE XVI, OF THE TEXAS
441	441	CONSTITUTION;
442	442	"(Q) LOANS DESCRIBED BY SECTION 50(a)(5) [50(a)(6)], ARTICLE
443	443	XVI, OF THE TEXAS CONSTITUTION MUST:
444	444	"(1) NOT REQUIRE YOU TO APPLY THE PROCEEDS TO ANOTHER DEBT
445	445	EXCEPT A DEBT THAT IS SECURED BY YOUR HOME OR OWED TO ANOTHER
446	446	LENDER;
447	447	"(2) NOT REQUIRE THAT YOU ASSIGN WAGES AS SECURITY;
448	448	"(3) NOT REQUIRE THAT YOU EXECUTE INSTRUMENTS WHICH HAVE
449	449	BLANKS FOR SUBSTANTIVE TERMS OF AGREEMENT LEFT TO BE FILLED IN;
450	450	"(4) NOT REQUIRE THAT YOU SIGN A CONFESSION OF JUDGMENT OR
451	451	POWER OF ATTORNEY TO ANOTHER PERSON TO CONFESS JUDGMENT OR APPEAR IN
452	452	A LEGAL PROCEEDING ON YOUR BEHALF;
453	453	"(5) PROVIDE THAT YOU RECEIVE A COPY OF YOUR FINAL LOAN
454	454	APPLICATION AND ALL EXECUTED DOCUMENTS YOU SIGN AT CLOSING;
455	455	"(6) PROVIDE THAT THE SECURITY INSTRUMENTS CONTAIN A
456	456	DISCLOSURE THAT THIS LOAN IS A LOAN DEFINED BY SECTION 50(a)(5)
457	457	[50(a)(6)], ARTICLE XVI, OF THE TEXAS CONSTITUTION;
458	458	"(7) PROVIDE THAT WHEN THE LOAN IS PAID IN FULL, THE LENDER
459	459	WILL SIGN AND GIVE YOU A RELEASE OF LIEN OR AN ASSIGNMENT OF THE
460	460	LIEN, WHICHEVER IS APPROPRIATE;
461	461	"(8) PROVIDE THAT YOU MAY, WITHIN 3 DAYS AFTER CLOSING,
462	462	RESCIND THE LOAN WITHOUT PENALTY OR CHARGE;
463	463	"(9) PROVIDE THAT YOU AND THE LENDER ACKNOWLEDGE THE FAIR
464	464	MARKET VALUE OF YOUR HOME ON THE DATE THE LOAN CLOSES; AND
465	465	"(10) PROVIDE THAT THE LENDER WILL FORFEIT ALL PRINCIPAL AND
466	466	INTEREST IF THE LENDER FAILS TO COMPLY WITH THE LENDER'S
467	467	OBLIGATIONS UNLESS THE LENDER CURES THE FAILURE TO COMPLY AS
468	468	PROVIDED BY SECTION 50(a)(5)(Q)(x) [50(a)(6)(Q)(x)], ARTICLE XVI,
469	469	OF THE TEXAS CONSTITUTION; AND
470	470	"(R) IF THE LOAN IS A HOME EQUITY LINE OF CREDIT:
471	471	"(1) YOU MAY REQUEST ADVANCES, REPAY MONEY, AND REBORROW
472	472	MONEY UNDER THE LINE OF CREDIT;
473	473	"(2) EACH ADVANCE UNDER THE LINE OF CREDIT MUST BE IN AN
474	474	AMOUNT OF AT LEAST $4,000;
475	475	"(3) YOU MAY NOT USE A CREDIT CARD, DEBIT CARD, OR SIMILAR
476	476	DEVICE, OR PREPRINTED CHECK THAT YOU DID NOT SOLICIT, TO OBTAIN
477	477	ADVANCES UNDER THE LINE OF CREDIT;
478	478	"(4) ANY FEES THE LENDER CHARGES MAY BE CHARGED AND COLLECTED
479	479	ONLY AT THE TIME THE LINE OF CREDIT IS ESTABLISHED AND THE LENDER
480	480	MAY NOT CHARGE A FEE IN CONNECTION WITH ANY ADVANCE;
481	481	"(5) THE MAXIMUM PRINCIPAL AMOUNT THAT MAY BE EXTENDED, WHEN
482	482	ADDED TO ALL OTHER DEBTS SECURED BY YOUR HOME, MAY NOT EXCEED 80
483	483	PERCENT OF THE FAIR MARKET VALUE OF YOUR HOME ON THE DATE THE LINE OF
484	484	CREDIT IS ESTABLISHED;
485	485	"(6) IF THE PRINCIPAL BALANCE UNDER THE LINE OF CREDIT AT ANY
486	486	TIME EXCEEDS 80 PERCENT OF THE FAIR MARKET VALUE OF YOUR HOME, AS
487	487	DETERMINED ON THE DATE THE LINE OF CREDIT IS ESTABLISHED, YOU MAY
488	488	NOT CONTINUE TO REQUEST ADVANCES UNDER THE LINE OF CREDIT UNTIL THE
489	489	BALANCE IS LESS THAN 80 PERCENT OF THE FAIR MARKET VALUE; AND
490	490	"(7) THE LENDER MAY NOT UNILATERALLY AMEND THE TERMS OF THE
491	491	LINE OF CREDIT.
492	492	"THIS NOTICE IS ONLY A SUMMARY OF YOUR RIGHTS UNDER THE TEXAS
493	493	CONSTITUTION. YOUR RIGHTS ARE GOVERNED BY SECTION 50, ARTICLE XVI,
494	494	OF THE TEXAS CONSTITUTION, AND NOT BY THIS NOTICE."
495	495	If the discussions with the borrower are conducted primarily
496	496	in a language other than English, the lender shall, before closing,
497	497	provide an additional copy of the notice translated into the
498	498	written language in which the discussions were conducted.
499	499	(h) A lender or assignee for value may conclusively rely on
500	500	the written acknowledgment as to the fair market value of the
501	501	homestead property made in accordance with Subsection
502	502	(a)(5)(Q)(ix) [(a)(6)(Q)(ix)] of this section if:
503	503	(1) the value acknowledged to is the value estimate in
504	504	an appraisal or evaluation prepared in accordance with a state or
505	505	federal requirement applicable to an extension of credit under
506	506	Subsection (a)(5) of this section [(a)(6)]; and
507	507	(2) the lender or assignee does not have actual
508	508	knowledge at the time of the payment of value or advance of funds by
509	509	the lender or assignee that the fair market value stated in the
510	510	written acknowledgment was incorrect.
511	511	(i) This subsection shall not affect or impair any right of
512	512	the borrower to recover damages from the lender or assignee under
513	513	applicable law for wrongful foreclosure. A purchaser for value
514	514	without actual knowledge may conclusively presume that a lien
515	515	securing an extension of credit described by Subsection (a)(5)
516	516	[(a)(6)] of this section was a valid lien securing the extension of
517	517	credit with homestead property if:
518	518	(1) the security instruments securing the extension of
519	519	credit contain a disclosure that the extension of credit secured by
520	520	the lien was the type of credit defined by Subsection (a)(5) of this
521	521	section [Section 50(a)(6), Article XVI, Texas Constitution];
522	522	(2) the purchaser acquires the title to the property
523	523	pursuant to or after the foreclosure of the voluntary lien; and
524	524	(3) the purchaser is not the lender or assignee under
525	525	the extension of credit.
526	526	(j) Subsection (a)(5) [(a)(6)] and Subsections (e)-(i) of
527	527	this section are not severable, and none of those provisions would
528	528	have been enacted without the others. If any of those provisions
529	529	are held to be preempted by the laws of the United States, all of
530	530	those provisions are invalid. This subsection shall not apply to
531	531	any lien or extension of credit made after January 1, 1998, and
532	532	before the date any provision under Subsection (a)(5) [(a)(6)] or
533	533	Subsections (e)-(i) of this section is held to be preempted.
534	534	(k) "Reverse mortgage" means an extension of credit:
535	535	(1) that is secured by a voluntary lien on homestead
536	536	property created by a written agreement with the consent of each
537	537	owner and each owner's spouse;
538	538	(2) that is made to a person who is or whose spouse is
539	539	62 years or older;
540	540	(3) that is made without recourse for personal
541	541	liability against each owner and the spouse of each owner;
542	542	(4) under which advances are provided to a borrower:
543	543	(A) based on the equity in a borrower's
544	544	homestead; or
545	545	(B) for the purchase of homestead property that
546	546	the borrower will occupy as a principal residence;
547	547	(5) that does not permit the lender to reduce the
548	548	amount or number of advances because of an adjustment in the
549	549	interest rate if periodic advances are to be made;
550	550	(6) that requires no payment of principal or interest
551	551	until:
552	552	(A) all borrowers have died;
553	553	(B) the homestead property securing the loan is
554	554	sold or otherwise transferred;
555	555	(C) all borrowers cease occupying the homestead
556	556	property for a period of longer than 12 consecutive months without
557	557	prior written approval from the lender;
558	558	(C-1) if the extension of credit is used for the
559	559	purchase of homestead property, the borrower fails to timely occupy
560	560	the homestead property as the borrower's principal residence within
561	561	a specified period after the date the extension of credit is made
562	562	that is stipulated in the written agreement creating the lien on the
563	563	property; or
564	564	(D) the borrower:
565	565	(i) defaults on an obligation specified in
566	566	the loan documents to repair and maintain, pay taxes and
567	567	assessments on, or insure the homestead property;
568	568	(ii) commits actual fraud in connection
569	569	with the loan; or
570	570	(iii) fails to maintain the priority of the
571	571	lender's lien on the homestead property, after the lender gives
572	572	notice to the borrower, by promptly discharging any lien that has
573	573	priority or may obtain priority over the lender's lien within 10
574	574	days after the date the borrower receives the notice, unless the
575	575	borrower:
576	576	(a) agrees in writing to the payment
577	577	of the obligation secured by the lien in a manner acceptable to the
578	578	lender;
579	579	(b) contests in good faith the lien
580	580	by, or defends against enforcement of the lien in, legal
581	581	proceedings so as to prevent the enforcement of the lien or
582	582	forfeiture of any part of the homestead property; or
583	583	(c) secures from the holder of the
584	584	lien an agreement satisfactory to the lender subordinating the lien
585	585	to all amounts secured by the lender's lien on the homestead
586	586	property;
587	587	(7) that provides that if the lender fails to make loan
588	588	advances as required in the loan documents and if the lender fails
589	589	to cure the default as required in the loan documents after notice
590	590	from the borrower, the lender forfeits all principal and interest
591	591	of the reverse mortgage, provided, however, that this subdivision
592	592	does not apply when a governmental agency or instrumentality takes
593	593	an assignment of the loan in order to cure the default;
594	594	(8) that is not made unless the prospective borrower
595	595	and the spouse of the prospective borrower attest in writing that
596	596	the prospective borrower and the prospective borrower's spouse
597	597	received counseling regarding the advisability and availability of
598	598	reverse mortgages and other financial alternatives that was
599	599	completed not earlier than the 180th day nor later than the 5th day
600	600	before the date the extension of credit is closed;
601	601	(9) that is not closed before the 12th day after the
602	602	date the lender provides to the prospective borrower the following
603	603	written notice on a separate instrument, which the lender or
604	604	originator and the borrower must sign for the notice to take effect:
605	605	"IMPORTANT NOTICE TO BORROWERS
606	606	RELATED TO YOUR REVERSE MORTGAGE
607	607	"UNDER THE TEXAS TAX CODE, CERTAIN ELDERLY PERSONS MAY DEFER THE
608	608	COLLECTION OF PROPERTY TAXES ON THEIR RESIDENCE HOMESTEAD. BY
609	609	RECEIVING THIS REVERSE MORTGAGE YOU MAY BE REQUIRED TO FORGO ANY
610	610	PREVIOUSLY APPROVED DEFERRAL OF PROPERTY TAX COLLECTION AND YOU MAY
611	611	BE REQUIRED TO PAY PROPERTY TAXES ON AN ANNUAL BASIS ON THIS
612	612	PROPERTY.
613	613	"THE LENDER MAY FORECLOSE THE REVERSE MORTGAGE AND YOU MAY LOSE YOUR
614	614	HOME IF:
615	615	"(A) YOU DO NOT PAY THE TAXES OR OTHER ASSESSMENTS ON THE
616	616	HOME EVEN IF YOU ARE ELIGIBLE TO DEFER PAYMENT OF PROPERTY TAXES;
617	617	"(B) YOU DO NOT MAINTAIN AND PAY FOR PROPERTY INSURANCE ON
618	618	THE HOME AS REQUIRED BY THE LOAN DOCUMENTS;
619	619	"(C) YOU FAIL TO MAINTAIN THE HOME IN A STATE OF GOOD
620	620	CONDITION AND REPAIR;
621	621	"(D) YOU CEASE OCCUPYING THE HOME FOR A PERIOD LONGER THAN
622	622	12 CONSECUTIVE MONTHS WITHOUT THE PRIOR WRITTEN APPROVAL FROM THE
623	623	LENDER OR, IF THE EXTENSION OF CREDIT IS USED FOR THE PURCHASE OF
624	624	THE HOME, YOU FAIL TO TIMELY OCCUPY THE HOME AS YOUR PRINCIPAL
625	625	RESIDENCE WITHIN A PERIOD OF TIME AFTER THE EXTENSION OF CREDIT IS
626	626	MADE THAT IS STIPULATED IN THE WRITTEN AGREEMENT CREATING THE LIEN
627	627	ON THE HOME;
628	628	"(E) YOU SELL THE HOME OR OTHERWISE TRANSFER THE HOME
629	629	WITHOUT PAYING OFF THE LOAN;
630	630	"(F) ALL BORROWERS HAVE DIED AND THE LOAN IS NOT REPAID;
631	631	"(G) YOU COMMIT ACTUAL FRAUD IN CONNECTION WITH THE LOAN; OR
632	632	"(H) YOU FAIL TO MAINTAIN THE PRIORITY OF THE LENDER'S LIEN
633	633	ON THE HOME, AFTER THE LENDER GIVES NOTICE TO YOU, BY PROMPTLY
634	634	DISCHARGING ANY LIEN THAT HAS PRIORITY OR MAY OBTAIN PRIORITY OVER
635	635	THE LENDER'S LIEN WITHIN 10 DAYS AFTER THE DATE YOU RECEIVE THE
636	636	NOTICE, UNLESS YOU:
637	637	"(1) AGREE IN WRITING TO THE PAYMENT OF THE OBLIGATION
638	638	SECURED BY THE LIEN IN A MANNER ACCEPTABLE TO THE LENDER;
639	639	"(2) CONTEST IN GOOD FAITH THE LIEN BY, OR DEFEND
640	640	AGAINST ENFORCEMENT OF THE LIEN IN, LEGAL PROCEEDINGS SO AS TO
641	641	PREVENT THE ENFORCEMENT OF THE LIEN OR FORFEITURE OF ANY PART OF THE
642	642	HOME; OR
643	643	"(3) SECURE FROM THE HOLDER OF THE LIEN AN AGREEMENT
644	644	SATISFACTORY TO THE LENDER SUBORDINATING THE LIEN TO ALL AMOUNTS
645	645	SECURED BY THE LENDER'S LIEN ON THE HOME.
646	646	"IF A GROUND FOR FORECLOSURE EXISTS, THE LENDER MAY NOT COMMENCE
647	647	FORECLOSURE UNTIL THE LENDER GIVES YOU WRITTEN NOTICE BY MAIL THAT A
648	648	GROUND FOR FORECLOSURE EXISTS AND GIVES YOU AN OPPORTUNITY TO
649	649	REMEDY THE CONDITION CREATING THE GROUND FOR FORECLOSURE OR TO PAY
650	650	THE REVERSE MORTGAGE DEBT WITHIN THE TIME PERMITTED BY SECTION
651	651	50(k)(10), ARTICLE XVI, OF THE TEXAS CONSTITUTION. THE LENDER MUST
652	652	OBTAIN A COURT ORDER FOR FORECLOSURE EXCEPT THAT A COURT ORDER IS
653	653	NOT REQUIRED IF THE FORECLOSURE OCCURS BECAUSE:
654	654	"(1) ALL BORROWERS HAVE DIED; OR
655	655	"(2) THE HOMESTEAD PROPERTY SECURING THE LOAN IS SOLD
656	656	OR OTHERWISE TRANSFERRED."
657	657	"YOU SHOULD CONSULT WITH YOUR HOME COUNSELOR OR AN ATTORNEY IF YOU
658	658	HAVE ANY CONCERNS ABOUT THESE OBLIGATIONS BEFORE YOU CLOSE YOUR
659	659	REVERSE MORTGAGE LOAN. TO LOCATE AN ATTORNEY IN YOUR AREA, YOU MAY
660	660	WISH TO CONTACT THE STATE BAR OF TEXAS."
661	661	"THIS NOTICE IS ONLY A SUMMARY OF YOUR RIGHTS UNDER THE TEXAS
662	662	CONSTITUTION. YOUR RIGHTS ARE GOVERNED IN PART BY SECTION 50,
663	663	ARTICLE XVI, OF THE TEXAS CONSTITUTION, AND NOT BY THIS NOTICE.";
664	664	(10) that does not permit the lender to commence
665	665	foreclosure until the lender gives notice to the borrower, in the
666	666	manner provided for a notice by mail related to the foreclosure of
667	667	liens under Subsection (a)(5) [(a)(6)] of this section, that a
668	668	ground for foreclosure exists and gives the borrower at least 30
669	669	days, or at least 20 days in the event of a default under
670	670	Subdivision (6)(D)(iii) of this subsection, to:
671	671	(A) remedy the condition creating the ground for
672	672	foreclosure;
673	673	(B) pay the debt secured by the homestead
674	674	property from proceeds of the sale of the homestead property by the
675	675	borrower or from any other sources; or
676	676	(C) convey the homestead property to the lender
677	677	by a deed in lieu of foreclosure; and
678	678	(11) that is secured by a lien that may be foreclosed
679	679	upon only by a court order, if the foreclosure is for a ground other
680	680	than a ground stated by Subdivision (6)(A) or (B) of this
681	681	subsection.
682	682	(q) To the extent that any statutes of this state, including
683	683	without limitation, Section 41.001 of the Texas Property Code,
684	684	purport to limit encumbrances that may properly be fixed on
685	685	homestead property in a manner that does not permit encumbrances
686	686	for extensions of credit described in Subsection (a)(5) or (a)(6)
687	687	[or (a)(7)] of this section, the same shall be superseded to the
688	688	extent that such encumbrances shall be permitted to be fixed upon
689	689	homestead property in the manner provided for by this amendment.
690	690	(r) The supreme court shall promulgate rules of civil
691	691	procedure for expedited foreclosure proceedings related to the
692	692	foreclosure of liens under Subsection (a)(5) [(a)(6)] of this
693	693	section and to foreclosure of a reverse mortgage lien that requires
694	694	a court order.
695	695	(t) A home equity line of credit is a form of an open-end
696	696	account that may be debited from time to time, under which credit
697	697	may be extended from time to time and under which:
698	698	(1) the owner requests advances, repays money, and
699	699	reborrows money;
700	700	(2) any single debit or advance is not less than
701	701	$4,000;
702	702	(3) the owner does not use a credit card, debit card,
703	703	or similar device, or preprinted check unsolicited by the borrower,
704	704	to obtain an advance;
705	705	(4) any fees described by Subsection (a)(5)(E)
706	706	[(a)(6)(E)] of this section are charged and collected only at the
707	707	time the extension of credit is established and no fee is charged or
708	708	collected in connection with any debit or advance;
709	709	(5) the maximum principal amount that may be extended
710	710	under the account, when added to the aggregate total of the
711	711	outstanding principal balances of all indebtedness secured by the
712	712	homestead on the date the extension of credit is established, does
713	713	not exceed an amount described under Subsection (a)(5)(B)
714	714	[(a)(6)(B)] of this section;
715	715	(6) (repealed);
716	716	(7) the lender or holder may not unilaterally amend
717	717	the extension of credit; and
718	718	(8) repayment is to be made in regular periodic
719	719	installments, not more often than every 14 days and not less often
720	720	than monthly, beginning not later than two months from the date the
721	721	extension of credit is established, and:
722	722	(A) during the period during which the owner may
723	723	request advances, each installment equals or exceeds the amount of
724	724	accrued interest; and
725	725	(B) after the period during which the owner may
726	726	request advances, installments are substantially equal.
727	727	(u) The legislature may by statute delegate one or more
728	728	state agencies the power to interpret Subsections (a)(4)-(a)(6)
729	729	[(a)(5)-(a)(7)], (e)-(p), and (t), of this section. An act or
730	730	omission does not violate a provision included in those subsections
731	731	if the act or omission conforms to an interpretation of the
732	732	provision that is:
733	733	(1) in effect at the time of the act or omission; and
734	734	(2) made by a state agency to which the power of
735	735	interpretation is delegated as provided by this subsection or by an
736	736	appellate court of this state or the United States.
737	737	SECTION 4. This proposed constitutional amendment shall be
738	738	submitted to the voters at an election to be held November 4, 2025.
739	739	The ballot shall be printed to permit voting for or against the
740	740	proposition: "The constitutional amendment providing that a
741	741	residence homestead is not subject to seizure or sale for
742	742	delinquent ad valorem taxes."