S.J.R. No. 18
 
 
 
  proposing a constitutional amendment to authorize the making of a
  reverse mortgage loan for the purchase of homestead property and to
  amend certain requirements in connection with a reverse mortgage
  loan.
         BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subsection (k), Section 50, Article XVI, Texas
  Constitution, is amended to read as follows:
         (k)  "Reverse mortgage" means an extension of credit:
               (1)  that is secured by a voluntary lien on homestead
  property created by a written agreement with the consent of each
  owner and each owner's spouse;
               (2)  that is made to a person who is or whose spouse is
  62 years or older;
               (3)  that is made without recourse for personal
  liability against each owner and the spouse of each owner;
               (4)  under which advances are provided to a borrower:
                     (A)  based on the equity in a borrower's
  homestead; or
                     (B)  for the purchase of homestead property that
  the borrower will occupy as a principal residence;
               (5)  that does not permit the lender to reduce the
  amount or number of advances because of an adjustment in the
  interest rate if periodic advances are to be made;
               (6)  that requires no payment of principal or interest
  until:
                     (A)  all borrowers have died;
                     (B)  the homestead property securing the loan is
  sold or otherwise transferred;
                     (C)  all borrowers cease occupying the homestead
  property for a period of longer than 12 consecutive months without
  prior written approval from the lender;
                     (C-1)  if the extension of credit is used for the
  purchase of homestead property, the borrower fails to timely occupy
  the homestead property as the borrower's principal residence within
  a specified period after the date the extension of credit is made
  that is stipulated in the written agreement creating the lien on the
  property; or
                     (D)  the borrower:
                           (i)  defaults on an obligation specified in
  the loan documents to repair and maintain, pay taxes and
  assessments on, or insure the homestead property;
                           (ii)  commits actual fraud in connection
  with the loan; or
                           (iii)  fails to maintain the priority of the
  lender's lien on the homestead property, after the lender gives
  notice to the borrower, by promptly discharging any lien that has
  priority or may obtain priority over the lender's lien within 10
  days after the date the borrower receives the notice, unless the
  borrower:
                                 (a)  agrees in writing to the payment
  of the obligation secured by the lien in a manner acceptable to the
  lender;
                                 (b)  contests in good faith the lien
  by, or defends against enforcement of the lien in, legal
  proceedings so as to prevent the enforcement of the lien or
  forfeiture of any part of the homestead property; or
                                 (c)  secures from the holder of the
  lien an agreement satisfactory to the lender subordinating the lien
  to all amounts secured by the lender's lien on the homestead
  property;
               (7)  that provides that if the lender fails to make loan
  advances as required in the loan documents and if the lender fails
  to cure the default as required in the loan documents after notice
  from the borrower, the lender forfeits all principal and interest
  of the reverse mortgage, provided, however, that this subdivision
  does not apply when a governmental agency or instrumentality takes
  an assignment of the loan in order to cure the default;
               (8)  that is not made unless the prospective borrower
  and the spouse of the prospective borrower attest [owner of the
  homestead attests] in writing that the prospective borrower and the
  prospective borrower's spouse [owner] received counseling
  regarding the advisability and availability of reverse mortgages
  and other financial alternatives that was completed not earlier
  than the 180th day nor later than the 5th day before the date the
  extension of credit is closed;
               (9)  that is not closed before the 12th day after the
  date the lender provides to the prospective borrower the following
  written notice on a separate instrument, which the lender or
  originator and the borrower must sign for the notice to take effect:
  "IMPORTANT NOTICE TO BORROWERS
  RELATED TO YOUR REVERSE MORTGAGE
  "UNDER THE TEXAS TAX CODE, CERTAIN ELDERLY PERSONS MAY DEFER THE
  COLLECTION OF PROPERTY TAXES ON THEIR RESIDENCE HOMESTEAD.  BY
  RECEIVING THIS REVERSE MORTGAGE YOU MAY BE REQUIRED TO FORGO ANY
  PREVIOUSLY APPROVED DEFERRAL OF PROPERTY TAX COLLECTION AND YOU MAY
  BE REQUIRED TO PAY PROPERTY TAXES ON AN ANNUAL BASIS ON THIS
  PROPERTY.
  "THE LENDER MAY FORECLOSE THE REVERSE MORTGAGE AND YOU MAY LOSE
  YOUR HOME IF:
         "(A)  YOU DO NOT PAY THE TAXES OR OTHER ASSESSMENTS ON THE
  HOME EVEN IF YOU ARE ELIGIBLE TO DEFER PAYMENT OF PROPERTY TAXES;
         "(B)  YOU DO NOT MAINTAIN AND PAY FOR PROPERTY INSURANCE ON
  THE HOME AS REQUIRED BY THE LOAN DOCUMENTS;
         "(C)  YOU FAIL TO MAINTAIN THE HOME IN A STATE OF GOOD
  CONDITION AND REPAIR;
         "(D)  YOU CEASE OCCUPYING THE HOME FOR A PERIOD LONGER THAN
  12 CONSECUTIVE MONTHS WITHOUT THE PRIOR WRITTEN APPROVAL FROM THE
  LENDER OR, IF THE EXTENSION OF CREDIT IS USED FOR THE PURCHASE OF
  THE HOME, YOU FAIL TO TIMELY OCCUPY THE HOME AS YOUR PRINCIPAL
  RESIDENCE WITHIN A PERIOD OF TIME AFTER THE EXTENSION OF CREDIT IS
  MADE THAT IS STIPULATED IN THE WRITTEN AGREEMENT CREATING THE LIEN
  ON THE HOME;
         "(E)  YOU SELL THE HOME OR OTHERWISE TRANSFER THE HOME
  WITHOUT PAYING OFF THE LOAN;
         "(F)  ALL BORROWERS HAVE DIED AND THE LOAN IS NOT REPAID;
         "(G)  YOU COMMIT ACTUAL FRAUD IN CONNECTION WITH THE LOAN; OR
         "(H)  YOU FAIL TO MAINTAIN THE PRIORITY OF THE LENDER'S LIEN
  ON THE HOME, AFTER THE LENDER GIVES NOTICE TO YOU, BY PROMPTLY
  DISCHARGING ANY LIEN THAT HAS PRIORITY OR MAY OBTAIN PRIORITY OVER
  THE LENDER'S LIEN WITHIN 10 DAYS AFTER THE DATE YOU RECEIVE THE
  NOTICE, UNLESS YOU:
               "(1)  AGREE IN WRITING TO THE PAYMENT OF THE OBLIGATION
  SECURED BY THE LIEN IN A MANNER ACCEPTABLE TO THE LENDER;
               "(2)  CONTEST IN GOOD FAITH THE LIEN BY, OR DEFEND
  AGAINST ENFORCEMENT OF THE LIEN IN, LEGAL PROCEEDINGS SO AS TO
  PREVENT THE ENFORCEMENT OF THE LIEN OR FORFEITURE OF ANY PART OF THE
  HOME; OR
               "(3)  SECURE FROM THE HOLDER OF THE LIEN AN AGREEMENT
  SATISFACTORY TO THE LENDER SUBORDINATING THE LIEN TO ALL AMOUNTS
  SECURED BY THE LENDER'S LIEN ON THE HOME.
  "IF A GROUND FOR FORECLOSURE EXISTS, THE LENDER MAY NOT COMMENCE
  FORECLOSURE UNTIL THE LENDER GIVES YOU WRITTEN NOTICE BY MAIL THAT A
  GROUND FOR FORECLOSURE EXISTS AND GIVES YOU AN OPPORTUNITY TO
  REMEDY THE CONDITION CREATING THE GROUND FOR FORECLOSURE OR TO PAY
  THE REVERSE MORTGAGE DEBT WITHIN THE TIME PERMITTED BY SECTION
  50(k)(10), ARTICLE XVI, OF THE TEXAS CONSTITUTION.  THE LENDER MUST
  OBTAIN A COURT ORDER FOR FORECLOSURE EXCEPT THAT A COURT ORDER IS
  NOT REQUIRED IF THE FORECLOSURE OCCURS BECAUSE:
               "(1)  ALL BORROWERS HAVE DIED; OR
               "(2)  THE HOMESTEAD PROPERTY SECURING THE LOAN IS SOLD
  OR OTHERWISE TRANSFERRED."
 
  "YOU SHOULD CONSULT WITH YOUR HOME COUNSELOR OR AN ATTORNEY IF YOU
  HAVE ANY CONCERNS ABOUT THESE OBLIGATIONS BEFORE YOU CLOSE YOUR
  REVERSE MORTGAGE LOAN.  TO LOCATE AN ATTORNEY IN YOUR AREA, YOU MAY
  WISH TO CONTACT THE STATE BAR OF TEXAS."
 
  "THIS NOTICE IS ONLY A SUMMARY OF YOUR RIGHTS UNDER THE TEXAS
  CONSTITUTION. YOUR RIGHTS ARE GOVERNED IN PART BY SECTION 50,
  ARTICLE XVI, OF THE TEXAS CONSTITUTION, AND NOT BY THIS NOTICE." 
  [that requires the lender, at the time the loan is made, to disclose
  to the borrower by written notice the specific provisions contained
  in Subdivision (6) of this subsection under which the borrower is
  required to repay the loan];
               (10)  that does not permit the lender to commence
  foreclosure until the lender gives notice to the borrower, in the
  manner provided for a notice by mail related to the foreclosure of
  liens under Subsection (a)(6) of this section, that a ground for
  foreclosure exists and gives the borrower at least 30 days, or at
  least 20 days in the event of a default under Subdivision
  (6)(D)(iii) of this subsection, to:
                     (A)  remedy the condition creating the ground for
  foreclosure;
                     (B)  pay the debt secured by the homestead
  property from proceeds of the sale of the homestead property by the
  borrower or from any other sources; or
                     (C)  convey the homestead property to the lender
  by a deed in lieu of foreclosure; and
               (11)  that is secured by a lien that may be foreclosed
  upon only by a court order, if the foreclosure is for a ground other
  than a ground stated by Subdivision (6)(A) or (B) of this
  subsection.
         SECTION 2.  This proposed constitutional amendment shall be
  submitted to the voters at an election to be held November 5, 2013.
  The ballot shall be printed to permit voting for or against the
  proposition:  "The constitutional amendment to authorize the making
  of a reverse mortgage loan for the purchase of homestead property
  and to amend lender disclosures and other requirements in
  connection with a reverse mortgage loan."
 
 
 
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
         I hereby certify that S.J.R. No. 18 passed the Senate on
  March 12, 2013, by the following vote:  Yeas 31, Nays 0.
 
 
  ______________________________
  Secretary of the Senate    
 
         I hereby certify that S.J.R. No. 18 passed the House on
  May 16, 2013, by the following vote:  Yeas 139, Nays 1, two
  present not voting.
 
 
  ______________________________
  Chief Clerk of the House