Bill Text: TX HJR26 | 2021 | 87th Legislature 1st Special Session | Introduced
Bill Title: Proposing a constitutional amendment providing that a residence homestead is not subject to seizure or sale for delinquent ad valorem taxes.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2021-07-17 - Filed [HJR26 Detail]
Download: Texas-2021-HJR26-Introduced.html
| 87S10213 SMH-F | ||
| By: Wilson | H.J.R. No. 26 | |
|
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| proposing a constitutional amendment providing that a residence | ||
| homestead is not subject to seizure or sale for delinquent ad | ||
| valorem taxes. | ||
| BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
| SECTION 1. Sections 13(a), (c), and (d), Article VIII, | ||
| Texas Constitution, are amended to read as follows: | ||
| (a) Except as provided by Section 15(b) of this article, | ||
| provision [ |
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| of a sufficient portion of all lands and other property for the | ||
| taxes due thereon that have not been paid. | ||
| (c) The former owner of [ |
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| designated for agricultural use[ |
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| unpaid taxes shall within two years from date of the filing for | ||
| record of the Purchaser's Deed have the right to redeem the property | ||
| on the following basis: | ||
| (1) Within the first year of the redemption period, | ||
| upon the payment of the amount of money paid for the property, | ||
| including the Tax Deed Recording Fee and all taxes, penalties, | ||
| interest, and costs paid plus an amount not exceeding 25 percent of | ||
| the aggregate total; and | ||
| (2) Within the last year of the redemption period, | ||
| upon the payment of the amount of money paid for the property, | ||
| including the Tax Deed Recording Fee and all taxes, penalties, | ||
| interest, and costs paid plus an amount not exceeding 50 percent of | ||
| the aggregate total. | ||
| (d) If the [ |
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| agricultural use is sold pursuant to a suit to enforce the | ||
| collection of the unpaid taxes, the Legislature may limit the | ||
| application of Subsection (c) of this section to [ |
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| for agricultural use when the suit was filed. | ||
| SECTION 2. Section 15, Article VIII, Texas Constitution, is | ||
| amended to read as follows: | ||
| Sec. 15. (a) Except as provided by Subsection (b) of this | ||
| section, the [ |
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| shall be a special lien thereon; and all property, both real and | ||
| personal, belonging to any delinquent taxpayer shall be liable to | ||
| seizure and sale for the payment of all the taxes and penalties due | ||
| by such delinquent; and such property may be sold for the payment of | ||
| the taxes and penalties due by such delinquent, under such | ||
| regulations as the Legislature may provide. | ||
| (b) A residence homestead is not subject to seizure or sale | ||
| for the payment of delinquent taxes or penalties. The Legislature | ||
| by general law may define residence homestead for purposes of this | ||
| subsection. | ||
| SECTION 3. Sections 50(a), (e), (f), (f-1), (g), (h), (i), | ||
| (j), (k), (q), (r), (t), and (u), Article XVI, Texas Constitution, | ||
| are amended to read as follows: | ||
| (a) The homestead of a family, or of a single adult person, | ||
| shall be, and is hereby protected from forced sale, for the payment | ||
| of all debts except for: | ||
| (1) the purchase money thereof, or a part of such | ||
| purchase money; | ||
| (2) [ |
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| [ |
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| entirety of the property by a court order or by a written agreement | ||
| of the parties to the partition, including a debt of one spouse in | ||
| favor of the other spouse resulting from a division or an award of a | ||
| family homestead in a divorce proceeding; | ||
| (3) [ |
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| including a federal tax lien resulting from the tax debt of both | ||
| spouses, if the homestead is a family homestead, or from the tax | ||
| debt of the owner; | ||
| (4) [ |
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| improvements thereon, if contracted for in writing, or work and | ||
| material used to repair or renovate existing improvements thereon | ||
| if: | ||
| (A) the work and material are contracted for in | ||
| writing, with the consent of both spouses, in the case of a family | ||
| homestead, given in the same manner as is required in making a sale | ||
| and conveyance of the homestead; | ||
| (B) the contract for the work and material is not | ||
| executed by the owner or the owner's spouse before the fifth day | ||
| after the owner makes written application for any extension of | ||
| credit for the work and material, unless the work and material are | ||
| necessary to complete immediate repairs to conditions on the | ||
| homestead property that materially affect the health or safety of | ||
| the owner or person residing in the homestead and the owner of the | ||
| homestead acknowledges such in writing; | ||
| (C) the contract for the work and material | ||
| expressly provides that the owner may rescind the contract without | ||
| penalty or charge within three days after the execution of the | ||
| contract by all parties, unless the work and material are necessary | ||
| to complete immediate repairs to conditions on the homestead | ||
| property that materially affect the health or safety of the owner or | ||
| person residing in the homestead and the owner of the homestead | ||
| acknowledges such in writing; and | ||
| (D) the contract for the work and material is | ||
| executed by the owner and the owner's spouse only at the office of a | ||
| third-party lender making an extension of credit for the work and | ||
| material, an attorney at law, or a title company; | ||
| (5) [ |
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| (A) is secured by a voluntary lien on the | ||
| homestead created under a written agreement with the consent of | ||
| each owner and each owner's spouse; | ||
| (B) is of a principal amount that when added to | ||
| the aggregate total of the outstanding principal balances of all | ||
| other indebtedness secured by valid encumbrances of record against | ||
| the homestead does not exceed 80 percent of the fair market value of | ||
| the homestead on the date the extension of credit is made; | ||
| (C) is without recourse for personal liability | ||
| against each owner and the spouse of each owner, unless the owner or | ||
| spouse obtained the extension of credit by actual fraud; | ||
| (D) is secured by a lien that may be foreclosed | ||
| upon only by a court order; | ||
| (E) does not require the owner or the owner's | ||
| spouse to pay, in addition to any interest or any bona fide discount | ||
| points used to buy down the interest rate, any fees to any person | ||
| that are necessary to originate, evaluate, maintain, record, | ||
| insure, or service the extension of credit that exceed, in the | ||
| aggregate, two percent of the original principal amount of the | ||
| extension of credit, excluding fees for: | ||
| (i) an appraisal performed by a third party | ||
| appraiser; | ||
| (ii) a property survey performed by a state | ||
| registered or licensed surveyor; | ||
| (iii) a state base premium for a mortgagee | ||
| policy of title insurance with endorsements established in | ||
| accordance with state law; or | ||
| (iv) a title examination report if its cost | ||
| is less than the state base premium for a mortgagee policy of title | ||
| insurance without endorsements established in accordance with | ||
| state law; | ||
| (F) is not a form of open-end account that may be | ||
| debited from time to time or under which credit may be extended from | ||
| time to time unless the open-end account is a home equity line of | ||
| credit; | ||
| (G) is payable in advance without penalty or | ||
| other charge; | ||
| (H) is not secured by any additional real or | ||
| personal property other than the homestead; | ||
| (I) (repealed); | ||
| (J) may not be accelerated because of a decrease | ||
| in the market value of the homestead or because of the owner's | ||
| default under other indebtedness not secured by a prior valid | ||
| encumbrance against the homestead; | ||
| (K) is the only debt secured by the homestead at | ||
| the time the extension of credit is made unless the other debt was | ||
| made for a purpose described by Subsections (a)(1)-(a)(4) | ||
| [ |
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| (L) is scheduled to be repaid: | ||
| (i) in substantially equal successive | ||
| periodic installments, not more often than every 14 days and not | ||
| less often than monthly, beginning no later than two months from the | ||
| date the extension of credit is made, each of which equals or | ||
| exceeds the amount of accrued interest as of the date of the | ||
| scheduled installment; or | ||
| (ii) if the extension of credit is a home | ||
| equity line of credit, in periodic payments described under | ||
| Subsection (t)(8) of this section; | ||
| (M) is closed not before: | ||
| (i) the 12th day after the later of the date | ||
| that the owner of the homestead submits a loan application to the | ||
| lender for the extension of credit or the date that the lender | ||
| provides the owner a copy of the notice prescribed by Subsection (g) | ||
| of this section; | ||
| (ii) one business day after the date that | ||
| the owner of the homestead receives a copy of the loan application | ||
| if not previously provided and a final itemized disclosure of the | ||
| actual fees, points, interest, costs, and charges that will be | ||
| charged at closing. If a bona fide emergency or another good cause | ||
| exists and the lender obtains the written consent of the owner, the | ||
| lender may provide the documentation to the owner or the lender may | ||
| modify previously provided documentation on the date of closing; | ||
| and | ||
| (iii) the first anniversary of the closing | ||
| date of any other extension of credit described by Subsection | ||
| (a)(5) [ |
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| property, except a refinance described by Paragraph (Q)(x)(f) of | ||
| this subdivision, unless the owner on oath requests an earlier | ||
| closing due to a state of emergency that: | ||
| (a) has been declared by the president | ||
| of the United States or the governor as provided by law; and | ||
| (b) applies to the area where the | ||
| homestead is located; | ||
| (N) is closed only at the office of the lender, an | ||
| attorney at law, or a title company; | ||
| (O) permits a lender to contract for and receive | ||
| any fixed or variable rate of interest authorized under statute; | ||
| (P) is made by one of the following that has not | ||
| been found by a federal regulatory agency to have engaged in the | ||
| practice of refusing to make loans because the applicants for the | ||
| loans reside or the property proposed to secure the loans is located | ||
| in a certain area: | ||
| (i) a bank, savings and loan association, | ||
| savings bank, or credit union doing business under the laws of this | ||
| state or the United States, including a subsidiary of a bank, | ||
| savings and loan association, savings bank, or credit union | ||
| described by this subparagraph; | ||
| (ii) a federally chartered lending | ||
| instrumentality or a person approved as a mortgagee by the United | ||
| States government to make federally insured loans; | ||
| (iii) a person licensed to make regulated | ||
| loans, as provided by statute of this state; | ||
| (iv) a person who sold the homestead | ||
| property to the current owner and who provided all or part of the | ||
| financing for the purchase; | ||
| (v) a person who is related to the homestead | ||
| property owner within the second degree of affinity or | ||
| consanguinity; or | ||
| (vi) a person regulated by this state as a | ||
| mortgage banker or mortgage company; and | ||
| (Q) is made on the condition that: | ||
| (i) the owner of the homestead is not | ||
| required to apply the proceeds of the extension of credit to repay | ||
| another debt except debt secured by the homestead or debt to another | ||
| lender; | ||
| (ii) the owner of the homestead not assign | ||
| wages as security for the extension of credit; | ||
| (iii) the owner of the homestead not sign | ||
| any instrument in which blanks relating to substantive terms of | ||
| agreement are left to be filled in; | ||
| (iv) the owner of the homestead not sign a | ||
| confession of judgment or power of attorney to the lender or to a | ||
| third person to confess judgment or to appear for the owner in a | ||
| judicial proceeding; | ||
| (v) at the time the extension of credit is | ||
| made, the owner of the homestead shall receive a copy of the final | ||
| loan application and all executed documents signed by the owner at | ||
| closing related to the extension of credit; | ||
| (vi) the security instruments securing the | ||
| extension of credit contain a disclosure that the extension of | ||
| credit is the type of credit defined by Subsection (a)(5) [ |
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| of this section; | ||
| (vii) within a reasonable time after | ||
| termination and full payment of the extension of credit, the lender | ||
| cancel and return the promissory note to the owner of the homestead | ||
| and give the owner, in recordable form, a release of the lien | ||
| securing the extension of credit or a copy of an endorsement and | ||
| assignment of the lien to a lender that is refinancing the extension | ||
| of credit; | ||
| (viii) the owner of the homestead and any | ||
| spouse of the owner may, within three days after the extension of | ||
| credit is made, rescind the extension of credit without penalty or | ||
| charge; | ||
| (ix) the owner of the homestead and the | ||
| lender sign a written acknowledgment as to the fair market value of | ||
| the homestead property on the date the extension of credit is made; | ||
| (x) except as provided by Subparagraph (xi) | ||
| of this paragraph, the lender or any holder of the note for the | ||
| extension of credit shall forfeit all principal and interest of the | ||
| extension of credit if the lender or holder fails to comply with the | ||
| lender's or holder's obligations under the extension of credit and | ||
| fails to correct the failure to comply not later than the 60th day | ||
| after the date the lender or holder is notified by the borrower of | ||
| the lender's failure to comply by: | ||
| (a) paying to the owner an amount | ||
| equal to any overcharge paid by the owner under or related to the | ||
| extension of credit if the owner has paid an amount that exceeds an | ||
| amount stated in the applicable Paragraph (E), (G), or (O) of this | ||
| subdivision; | ||
| (b) sending the owner a written | ||
| acknowledgement that the lien is valid only in the amount that the | ||
| extension of credit does not exceed the percentage described by | ||
| Paragraph (B) of this subdivision, if applicable, or is not secured | ||
| by property described under Paragraph (H) of this subdivision, if | ||
| applicable; | ||
| (c) sending the owner a written notice | ||
| modifying any other amount, percentage, term, or other provision | ||
| prohibited by this section to a permitted amount, percentage, term, | ||
| or other provision and adjusting the account of the borrower to | ||
| ensure that the borrower is not required to pay more than an amount | ||
| permitted by this section and is not subject to any other term or | ||
| provision prohibited by this section; | ||
| (d) delivering the required documents | ||
| to the borrower if the lender fails to comply with Subparagraph (v) | ||
| of this paragraph or obtaining the appropriate signatures if the | ||
| lender fails to comply with Subparagraph (ix) of this paragraph; | ||
| (e) sending the owner a written | ||
| acknowledgement, if the failure to comply is prohibited by | ||
| Paragraph (K) of this subdivision, that the accrual of interest and | ||
| all of the owner's obligations under the extension of credit are | ||
| abated while any prior lien prohibited under Paragraph (K) remains | ||
| secured by the homestead; or | ||
| (f) if the failure to comply cannot be | ||
| cured under Subparagraphs (x)(a)-(e) of this paragraph, curing the | ||
| failure to comply by a refund or credit to the owner of $1,000 and | ||
| offering the owner the right to refinance the extension of credit | ||
| with the lender or holder for the remaining term of the loan at no | ||
| cost to the owner on the same terms, including interest, as the | ||
| original extension of credit with any modifications necessary to | ||
| comply with this section or on terms on which the owner and the | ||
| lender or holder otherwise agree that comply with this section; and | ||
| (xi) the lender or any holder of the note | ||
| for the extension of credit shall forfeit all principal and | ||
| interest of the extension of credit if the extension of credit is | ||
| made by a person other than a person described under Paragraph (P) | ||
| of this subdivision or if the lien was not created under a written | ||
| agreement with the consent of each owner and each owner's spouse, | ||
| unless each owner and each owner's spouse who did not initially | ||
| consent subsequently consents; | ||
| (6) [ |
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| (7) [ |
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| property lien secured by a manufactured home to a lien on real | ||
| property, including the refinance of the purchase price of the | ||
| manufactured home, the cost of installing the manufactured home on | ||
| the real property, and the refinance of the purchase price of the | ||
| real property. | ||
| (e) A refinance of debt secured by a homestead and described | ||
| by any subsection under Subsections (a)(1)-(a)(4) of this section | ||
| [ |
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| not be secured by a valid lien against the homestead unless: | ||
| (1) the refinance of the debt is an extension of credit | ||
| described by Subsection (a)(5) [ |
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| (2) the advance of all the additional funds is for | ||
| reasonable costs necessary to refinance such debt or for a purpose | ||
| described by Subsection (a)(2) or (a)(4) [ |
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| this section. | ||
| (f) A refinance of debt secured by the homestead, any | ||
| portion of which is an extension of credit described by Subsection | ||
| (a)(5) [ |
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| against the homestead unless either: | ||
| (1) the refinance of the debt is an extension of credit | ||
| described by Subsection (a)(5) or (a)(6) [ |
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| section; or | ||
| (2) all of the following conditions are met: | ||
| (A) the refinance is not closed before the first | ||
| anniversary of the date the extension of credit was closed; | ||
| (B) the refinanced extension of credit does not | ||
| include the advance of any additional funds other than: | ||
| (i) funds advanced to refinance a debt | ||
| described by Subsections (a)(1) through (a)(6) [ |
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| section; or | ||
| (ii) actual costs and reserves required by | ||
| the lender to refinance the debt; | ||
| (C) the refinance of the extension of credit is | ||
| of a principal amount that when added to the aggregate total of the | ||
| outstanding principal balances of all other indebtedness secured by | ||
| valid encumbrances of record against the homestead does not exceed | ||
| 80 percent of the fair market value of the homestead on the date the | ||
| refinance of the extension of credit is made; and | ||
| (D) the lender provides the owner the following | ||
| written notice on a separate document not later than the third | ||
| business day after the date the owner submits the loan application | ||
| to the lender and at least 12 days before the date the refinance of | ||
| the extension of credit is closed: | ||
| "YOUR EXISTING LOAN THAT YOU DESIRE TO REFINANCE IS A HOME | ||
| EQUITY LOAN. YOU MAY HAVE THE OPTION TO REFINANCE YOUR HOME EQUITY | ||
| LOAN AS EITHER A HOME EQUITY LOAN OR AS A NON-HOME EQUITY LOAN, IF | ||
| OFFERED BY YOUR LENDER. | ||
| "HOME EQUITY LOANS HAVE IMPORTANT CONSUMER PROTECTIONS. A | ||
| LENDER MAY ONLY FORECLOSE A HOME EQUITY LOAN BASED ON A COURT ORDER. | ||
| A HOME EQUITY LOAN MUST BE WITHOUT RECOURSE FOR PERSONAL LIABILITY | ||
| AGAINST YOU AND YOUR SPOUSE. | ||
| "IF YOU HAVE APPLIED TO REFINANCE YOUR EXISTING HOME EQUITY | ||
| LOAN AS A NON-HOME EQUITY LOAN, YOU WILL LOSE CERTAIN CONSUMER | ||
| PROTECTIONS. A NON-HOME EQUITY REFINANCED LOAN: | ||
| "(1) WILL PERMIT THE LENDER TO FORECLOSE WITHOUT A | ||
| COURT ORDER; | ||
| "(2) WILL BE WITH RECOURSE FOR PERSONAL LIABILITY | ||
| AGAINST YOU AND YOUR SPOUSE; AND | ||
| "(3) MAY ALSO CONTAIN OTHER TERMS OR CONDITIONS THAT | ||
| MAY NOT BE PERMITTED IN A TRADITIONAL HOME EQUITY LOAN. | ||
| "BEFORE YOU REFINANCE YOUR EXISTING HOME EQUITY LOAN TO MAKE | ||
| IT A NON-HOME EQUITY LOAN, YOU SHOULD MAKE SURE YOU UNDERSTAND THAT | ||
| YOU ARE WAIVING IMPORTANT PROTECTIONS THAT HOME EQUITY LOANS | ||
| PROVIDE UNDER THE LAW AND SHOULD CONSIDER CONSULTING WITH AN | ||
| ATTORNEY OF YOUR CHOOSING REGARDING THESE PROTECTIONS. | ||
| "YOU MAY WISH TO ASK YOUR LENDER TO REFINANCE YOUR LOAN AS A | ||
| HOME EQUITY LOAN. HOWEVER, A HOME EQUITY LOAN MAY HAVE A HIGHER | ||
| INTEREST RATE AND CLOSING COSTS THAN A NON-HOME EQUITY LOAN." | ||
| (f-1) A lien securing a refinance of debt under Subsection | ||
| (f)(2) of this section is deemed to be a lien described by | ||
| Subsection (a)(3) [ |
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| by the owner or the owner's spouse acknowledging that the | ||
| requirements of Subsection (f)(2) of this section have been met | ||
| conclusively establishes that the requirements of Subsection | ||
| (a)(3) [ |
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| (g) An extension of credit described by Subsection (a)(5) | ||
| [ |
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| homestead property if the extension of credit is not closed before | ||
| the 12th day after the lender provides the owner with the following | ||
| written notice on a separate instrument: | ||
| "NOTICE CONCERNING EXTENSIONS OF CREDIT DEFINED BY SECTION | ||
| 50(a)(5) [ |
||
| "SECTION 50(a)(5) [ |
||
| CONSTITUTION ALLOWS CERTAIN LOANS TO BE SECURED AGAINST THE EQUITY | ||
| IN YOUR HOME. SUCH LOANS ARE COMMONLY KNOWN AS EQUITY LOANS. IF YOU | ||
| DO NOT REPAY THE LOAN OR IF YOU FAIL TO MEET THE TERMS OF THE LOAN, | ||
| THE LENDER MAY FORECLOSE AND SELL YOUR HOME. THE CONSTITUTION | ||
| PROVIDES THAT: | ||
| "(A) THE LOAN MUST BE VOLUNTARILY CREATED WITH THE CONSENT OF | ||
| EACH OWNER OF YOUR HOME AND EACH OWNER'S SPOUSE; | ||
| "(B) THE PRINCIPAL LOAN AMOUNT AT THE TIME THE LOAN IS MADE | ||
| MUST NOT EXCEED AN AMOUNT THAT, WHEN ADDED TO THE PRINCIPAL BALANCES | ||
| OF ALL OTHER LIENS AGAINST YOUR HOME, IS MORE THAN 80 PERCENT OF THE | ||
| FAIR MARKET VALUE OF YOUR HOME; | ||
| "(C) THE LOAN MUST BE WITHOUT RECOURSE FOR PERSONAL LIABILITY | ||
| AGAINST YOU AND YOUR SPOUSE UNLESS YOU OR YOUR SPOUSE OBTAINED THIS | ||
| EXTENSION OF CREDIT BY ACTUAL FRAUD; | ||
| "(D) THE LIEN SECURING THE LOAN MAY BE FORECLOSED UPON ONLY | ||
| WITH A COURT ORDER; | ||
| "(E) FEES AND CHARGES TO MAKE THE LOAN MAY NOT EXCEED 2 | ||
| PERCENT OF THE LOAN AMOUNT, EXCEPT FOR A FEE OR CHARGE FOR AN | ||
| APPRAISAL PERFORMED BY A THIRD PARTY APPRAISER, A PROPERTY SURVEY | ||
| PERFORMED BY A STATE REGISTERED OR LICENSED SURVEYOR, A STATE BASE | ||
| PREMIUM FOR A MORTGAGEE POLICY OF TITLE INSURANCE WITH | ||
| ENDORSEMENTS, OR A TITLE EXAMINATION REPORT; | ||
| "(F) THE LOAN MAY NOT BE AN OPEN-END ACCOUNT THAT MAY BE | ||
| DEBITED FROM TIME TO TIME OR UNDER WHICH CREDIT MAY BE EXTENDED FROM | ||
| TIME TO TIME UNLESS IT IS A HOME EQUITY LINE OF CREDIT; | ||
| "(G) YOU MAY PREPAY THE LOAN WITHOUT PENALTY OR CHARGE; | ||
| "(H) NO ADDITIONAL COLLATERAL MAY BE SECURITY FOR THE LOAN; | ||
| "(I) (repealed); | ||
| "(J) YOU ARE NOT REQUIRED TO REPAY THE LOAN EARLIER THAN | ||
| AGREED SOLELY BECAUSE THE FAIR MARKET VALUE OF YOUR HOME DECREASES | ||
| OR BECAUSE YOU DEFAULT ON ANOTHER LOAN THAT IS NOT SECURED BY YOUR | ||
| HOME; | ||
| "(K) ONLY ONE LOAN DESCRIBED BY SECTION 50(a)(5) [ |
||
| ARTICLE XVI, OF THE TEXAS CONSTITUTION MAY BE SECURED WITH YOUR HOME | ||
| AT ANY GIVEN TIME; | ||
| "(L) THE LOAN MUST BE SCHEDULED TO BE REPAID IN PAYMENTS THAT | ||
| EQUAL OR EXCEED THE AMOUNT OF ACCRUED INTEREST FOR EACH PAYMENT | ||
| PERIOD; | ||
| "(M) THE LOAN MAY NOT CLOSE BEFORE 12 DAYS AFTER YOU SUBMIT A | ||
| LOAN APPLICATION TO THE LENDER OR BEFORE 12 DAYS AFTER YOU RECEIVE | ||
| THIS NOTICE, WHICHEVER DATE IS LATER; AND MAY NOT WITHOUT YOUR | ||
| CONSENT CLOSE BEFORE ONE BUSINESS DAY AFTER THE DATE ON WHICH YOU | ||
| RECEIVE A COPY OF YOUR LOAN APPLICATION IF NOT PREVIOUSLY PROVIDED | ||
| AND A FINAL ITEMIZED DISCLOSURE OF THE ACTUAL FEES, POINTS, | ||
| INTEREST, COSTS, AND CHARGES THAT WILL BE CHARGED AT CLOSING; AND IF | ||
| YOUR HOME WAS SECURITY FOR THE SAME TYPE OF LOAN WITHIN THE PAST | ||
| YEAR, A NEW LOAN SECURED BY THE SAME PROPERTY MAY NOT CLOSE BEFORE | ||
| ONE YEAR HAS PASSED FROM THE CLOSING DATE OF THE OTHER LOAN, UNLESS | ||
| ON OATH YOU REQUEST AN EARLIER CLOSING DUE TO A DECLARED STATE OF | ||
| EMERGENCY; | ||
| "(N) THE LOAN MAY CLOSE ONLY AT THE OFFICE OF THE LENDER, | ||
| TITLE COMPANY, OR AN ATTORNEY AT LAW; | ||
| "(O) THE LENDER MAY CHARGE ANY FIXED OR VARIABLE RATE OF | ||
| INTEREST AUTHORIZED BY STATUTE; | ||
| "(P) ONLY A LAWFULLY AUTHORIZED LENDER MAY MAKE LOANS | ||
| DESCRIBED BY SECTION 50(a)(5) [ |
||
| CONSTITUTION; | ||
| "(Q) LOANS DESCRIBED BY SECTION 50(a)(5) [ |
||
| XVI, OF THE TEXAS CONSTITUTION MUST: | ||
| "(1) NOT REQUIRE YOU TO APPLY THE PROCEEDS TO ANOTHER DEBT | ||
| EXCEPT A DEBT THAT IS SECURED BY YOUR HOME OR OWED TO ANOTHER | ||
| LENDER; | ||
| "(2) NOT REQUIRE THAT YOU ASSIGN WAGES AS SECURITY; | ||
| "(3) NOT REQUIRE THAT YOU EXECUTE INSTRUMENTS WHICH HAVE | ||
| BLANKS FOR SUBSTANTIVE TERMS OF AGREEMENT LEFT TO BE FILLED IN; | ||
| "(4) NOT REQUIRE THAT YOU SIGN A CONFESSION OF JUDGMENT OR | ||
| POWER OF ATTORNEY TO ANOTHER PERSON TO CONFESS JUDGMENT OR APPEAR IN | ||
| A LEGAL PROCEEDING ON YOUR BEHALF; | ||
| "(5) PROVIDE THAT YOU RECEIVE A COPY OF YOUR FINAL LOAN | ||
| APPLICATION AND ALL EXECUTED DOCUMENTS YOU SIGN AT CLOSING; | ||
| "(6) PROVIDE THAT THE SECURITY INSTRUMENTS CONTAIN A | ||
| DISCLOSURE THAT THIS LOAN IS A LOAN DEFINED BY SECTION 50(a)(5) | ||
| [ |
||
| "(7) PROVIDE THAT WHEN THE LOAN IS PAID IN FULL, THE LENDER | ||
| WILL SIGN AND GIVE YOU A RELEASE OF LIEN OR AN ASSIGNMENT OF THE | ||
| LIEN, WHICHEVER IS APPROPRIATE; | ||
| "(8) PROVIDE THAT YOU MAY, WITHIN 3 DAYS AFTER CLOSING, | ||
| RESCIND THE LOAN WITHOUT PENALTY OR CHARGE; | ||
| "(9) PROVIDE THAT YOU AND THE LENDER ACKNOWLEDGE THE FAIR | ||
| MARKET VALUE OF YOUR HOME ON THE DATE THE LOAN CLOSES; AND | ||
| "(10) PROVIDE THAT THE LENDER WILL FORFEIT ALL PRINCIPAL AND | ||
| INTEREST IF THE LENDER FAILS TO COMPLY WITH THE LENDER'S | ||
| OBLIGATIONS UNLESS THE LENDER CURES THE FAILURE TO COMPLY AS | ||
| PROVIDED BY SECTION 50(a)(5)(Q)(x) [ |
||
| OF THE TEXAS CONSTITUTION; AND | ||
| "(R) IF THE LOAN IS A HOME EQUITY LINE OF CREDIT: | ||
| "(1) YOU MAY REQUEST ADVANCES, REPAY MONEY, AND REBORROW | ||
| MONEY UNDER THE LINE OF CREDIT; | ||
| "(2) EACH ADVANCE UNDER THE LINE OF CREDIT MUST BE IN AN | ||
| AMOUNT OF AT LEAST $4,000; | ||
| "(3) YOU MAY NOT USE A CREDIT CARD, DEBIT CARD, OR SIMILAR | ||
| DEVICE, OR PREPRINTED CHECK THAT YOU DID NOT SOLICIT, TO OBTAIN | ||
| ADVANCES UNDER THE LINE OF CREDIT; | ||
| "(4) ANY FEES THE LENDER CHARGES MAY BE CHARGED AND COLLECTED | ||
| ONLY AT THE TIME THE LINE OF CREDIT IS ESTABLISHED AND THE LENDER | ||
| MAY NOT CHARGE A FEE IN CONNECTION WITH ANY ADVANCE; | ||
| "(5) THE MAXIMUM PRINCIPAL AMOUNT THAT MAY BE EXTENDED, WHEN | ||
| ADDED TO ALL OTHER DEBTS SECURED BY YOUR HOME, MAY NOT EXCEED 80 | ||
| PERCENT OF THE FAIR MARKET VALUE OF YOUR HOME ON THE DATE THE LINE OF | ||
| CREDIT IS ESTABLISHED; | ||
| "(6) IF THE PRINCIPAL BALANCE UNDER THE LINE OF CREDIT AT ANY | ||
| TIME EXCEEDS 80 PERCENT OF THE FAIR MARKET VALUE OF YOUR HOME, AS | ||
| DETERMINED ON THE DATE THE LINE OF CREDIT IS ESTABLISHED, YOU MAY | ||
| NOT CONTINUE TO REQUEST ADVANCES UNDER THE LINE OF CREDIT UNTIL THE | ||
| BALANCE IS LESS THAN 80 PERCENT OF THE FAIR MARKET VALUE; AND | ||
| "(7) THE LENDER MAY NOT UNILATERALLY AMEND THE TERMS OF THE | ||
| LINE OF CREDIT. | ||
| "THIS NOTICE IS ONLY A SUMMARY OF YOUR RIGHTS UNDER THE TEXAS | ||
| CONSTITUTION. YOUR RIGHTS ARE GOVERNED BY SECTION 50, ARTICLE XVI, | ||
| OF THE TEXAS CONSTITUTION, AND NOT BY THIS NOTICE." | ||
| If the discussions with the borrower are conducted primarily | ||
| in a language other than English, the lender shall, before closing, | ||
| provide an additional copy of the notice translated into the | ||
| written language in which the discussions were conducted. | ||
| (h) A lender or assignee for value may conclusively rely on | ||
| the written acknowledgment as to the fair market value of the | ||
| homestead property made in accordance with Subsection | ||
| (a)(5)(Q)(ix) [ |
||
| (1) the value acknowledged to is the value estimate in | ||
| an appraisal or evaluation prepared in accordance with a state or | ||
| federal requirement applicable to an extension of credit under | ||
| Subsection (a)(5) of this section [ |
||
| (2) the lender or assignee does not have actual | ||
| knowledge at the time of the payment of value or advance of funds by | ||
| the lender or assignee that the fair market value stated in the | ||
| written acknowledgment was incorrect. | ||
| (i) This subsection shall not affect or impair any right of | ||
| the borrower to recover damages from the lender or assignee under | ||
| applicable law for wrongful foreclosure. A purchaser for value | ||
| without actual knowledge may conclusively presume that a lien | ||
| securing an extension of credit described by Subsection (a)(5) | ||
| [ |
||
| credit with homestead property if: | ||
| (1) the security instruments securing the extension of | ||
| credit contain a disclosure that the extension of credit secured by | ||
| the lien was the type of credit defined by Subsection (a)(5) of this | ||
| section [ |
||
| (2) the purchaser acquires the title to the property | ||
| pursuant to or after the foreclosure of the voluntary lien; and | ||
| (3) the purchaser is not the lender or assignee under | ||
| the extension of credit. | ||
| (j) Subsection (a)(5) [ |
||
| this section are not severable, and none of those provisions would | ||
| have been enacted without the others. If any of those provisions | ||
| are held to be preempted by the laws of the United States, all of | ||
| those provisions are invalid. This subsection shall not apply to | ||
| any lien or extension of credit made after January 1, 1998, and | ||
| before the date any provision under Subsection (a)(5) [ |
||
| Subsections (e)-(i) of this section is held to be preempted. | ||
| (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 in writing that | ||
| the prospective borrower and the prospective borrower's spouse | ||
| 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."; | ||
| (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)(5) [ |
||
| 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. | ||
| (q) To the extent that any statutes of this state, including | ||
| without limitation, Section 41.001 of the Texas Property Code, | ||
| purport to limit encumbrances that may properly be fixed on | ||
| homestead property in a manner that does not permit encumbrances | ||
| for extensions of credit described in Subsection (a)(5) or (a)(6) | ||
| [ |
||
| extent that such encumbrances shall be permitted to be fixed upon | ||
| homestead property in the manner provided for by this amendment. | ||
| (r) The supreme court shall promulgate rules of civil | ||
| procedure for expedited foreclosure proceedings related to the | ||
| foreclosure of liens under Subsection (a)(5) [ |
||
| section and to foreclosure of a reverse mortgage lien that requires | ||
| a court order. | ||
| (t) A home equity line of credit is a form of an open-end | ||
| account that may be debited from time to time, under which credit | ||
| may be extended from time to time and under which: | ||
| (1) the owner requests advances, repays money, and | ||
| reborrows money; | ||
| (2) any single debit or advance is not less than | ||
| $4,000; | ||
| (3) the owner does not use a credit card, debit card, | ||
| or similar device, or preprinted check unsolicited by the borrower, | ||
| to obtain an advance; | ||
| (4) any fees described by Subsection (a)(5)(E) | ||
| [ |
||
| time the extension of credit is established and no fee is charged or | ||
| collected in connection with any debit or advance; | ||
| (5) the maximum principal amount that may be extended | ||
| under the account, when added to the aggregate total of the | ||
| outstanding principal balances of all indebtedness secured by the | ||
| homestead on the date the extension of credit is established, does | ||
| not exceed an amount described under Subsection (a)(5)(B) | ||
| [ |
||
| (6) (repealed); | ||
| (7) the lender or holder may not unilaterally amend | ||
| the extension of credit; and | ||
| (8) repayment is to be made in regular periodic | ||
| installments, not more often than every 14 days and not less often | ||
| than monthly, beginning not later than two months from the date the | ||
| extension of credit is established, and: | ||
| (A) during the period during which the owner may | ||
| request advances, each installment equals or exceeds the amount of | ||
| accrued interest; and | ||
| (B) after the period during which the owner may | ||
| request advances, installments are substantially equal. | ||
| (u) The legislature may by statute delegate one or more | ||
| state agencies the power to interpret Subsections (a)(4)-(a)(6) | ||
| [ |
||
| omission does not violate a provision included in those subsections | ||
| if the act or omission conforms to an interpretation of the | ||
| provision that is: | ||
| (1) in effect at the time of the act or omission; and | ||
| (2) made by a state agency to which the power of | ||
| interpretation is delegated as provided by this subsection or by an | ||
| appellate court of this state or the United States. | ||
| SECTION 4. This proposed constitutional amendment shall be | ||
| submitted to the voters at an election to be held November 2, 2021. | ||
| The ballot shall be printed to permit voting for or against the | ||
| proposition: "The constitutional amendment providing that a | ||
| residence homestead is not subject to seizure or sale for | ||
| delinquent ad valorem taxes." | ||
