This is the third legislative update prepared by this firm for the 2013 legislative session and covers proposed constitutional amendment Senate Joint Resolution 18 (SJR 18) that amends Section 50(k), Article XVI, Texas Constitution, to authorize advances under a reverse mortgage for the purchase of a residential homestead property, and Section 17.001 of Senate Bill 1093 (SB 1093) that amends Section 51.002(i) of the Texas Property Code. SJR 18 is to be submitted for voter approval at an election to be held November 5, 2013. If approved by the voters, SJR 18 becomes effective when the Texas Secretary of State canvasses [authenticates] the votes for the constitutional amendment proposed by SJR 18. 1. SJR18: REVERSE MORTGAGE AMENDMENTS TO SECTION 50(k), ARTICLE XVI, TEXAS CONSTITUTION SJR 18 proposes amendments to Section 50(k) to: (i) authorize advances under a reverse mortgage for the purchase of homestead property that the borrower will occupy as a principal residence; (ii) expand the conditions under which a lender may require repayment of a reverse mortgage to include the borrower’s failure to timely occupy the homestead property purchased with reverse mortgage advances within the period specified in the reverse mortgage agreement; (iii) prohibit the making of a reverse mortgage unless both the prospective borrower and the prospective borrower’s spouse receive counseling regarding the advisability and availability of reverse mortgages and other financial alternatives that is completed within a prescribed period before the closing date of the reverse mortgage; (iv) replace the written notice requirement with a promulgated written notice; and (v) prohibit closing of a reverse mortgage before the 12th day after the date the lender provides to the prospective borrower the promulgated written notice signed by the lender or originator and the borrower. Download complete memorandum below
