HBA-ALS H.J.R. 18 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.J.R. 18
By: Chisum
Financial Institutions
4/5/1999
Introduced



BACKGROUND AND PURPOSE 

Under current law, a borrower can lease or abandon a homestead subject to a
reverse mortgage, leaving a lender with no legal recourse.  There is a
concern that lenders are unwilling to enter into reverse mortgages.  H.J.R.
18 allows a bank to foreclose on reverse mortgage property if the homestead
property securing the loan is sold or transferred, if  all borrowers have
ceased to occupy the homestead property as a principal residence for more
than 180 consecutive days, or if the homestead property owner's whereabouts
are unknown. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 50(k), Article XVI, Texas Constitution, to
include within the definition of a "reverse mortgage" an extension of
credit that requires no payment of principal or interest until the
homestead property securing the loan is sold or transferred, all borrowers
cease to occupy the homestead property as a principal residence for more
than 180 consecutive days, or the homestead property owner's location is
unknown to the lender.  Makes nonsubstantive changes. 

SECTION 2.  Requires this proposed constitutional amendment to be submitted
to the voters at an election to be held November 2, 1999.  Sets forth the
required language for the ballot.