HJR40 - Proposing a constitutional amendment to remove the requirement that a home equity loan be closed only at the office of the lender, an attorney at law, or a title company.

  89R67 SHH-F     By: Swanson H.J.R. No. 40       A JOINT RESOLUTION   proposing a constitutional amendment to remove the requirement that   a home equity loan be closed only at the office of the lender, an   attorney at law, or a title company.          BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Sections 50(a) and (g), 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)  the taxes due thereon;                (3)  an owelty of partition imposed against the   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;                (4)  the refinance of a lien against a homestead,   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;                (5)  work and material used in constructing new   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;                (6)  an extension of credit that:                      (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)(5) or   Subsection (a)(8) of this section;                      (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)(6) of this section secured by the same homestead 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)   (repealed) [ 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 [Text truncated for display. 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