The Texas House of Representatives approved legislation that would reverse mortgage lending in Texas.
Supported by consumer groups, the House approved Senate Joint Resolution 18 by a 139-1 vote. Before it can become a law, the legislation will go to voters in Texas on November 5th for approval.
In March, the Texas Senate approved this legislation by a vote of 31-0.
This potential law would amend the Texas Constitution to authorize the "Reverse Mortgage for Purchase" program in Texas and would enhance consumer disclosure requirements for all reverse mortgage loans in Texas.
Texas is the only state at the moment that doesn’t allow the reverse mortgage for purchase program for homeowners.
If the legislation is passed in the fall, it will open up additional financing options for Texas homeowners age 62 and over who are downsizing or relocating to be closer to children or medical care.
These seniors can conserve cash assets while being assured that Texas’ uniquely protective homestead laws and strict compliance standards in our constitution will preserve their home investment.
"This was a critical piece of legislation for homeowners in Texas," says Scott Norman of Senate Reverse Mortgage. "Today’s vote by the House was clearly supportive of reverse mortgage lending and the goal to provide enhanced consumer disclosures for all borrowers."
Since 2001, homeowners in Texas using a reverse mortgage accessed more than $5 billion. The Loan Star State holds the second-largest market for this retirement product with a national market share of 8% of all reverse mortgages made in the country.