Reverse mortgage lenders who are looking to close HECM for purchase deals in Texas may have to wait for a few issues to get worked out.
According to an alert from the National Reverse Mortgage Lenders Association, there are technicalities in the Texas Constitution and related homestead laws that must be met in order to obtain a valid lien in homestead property in Texas.
An article from My San Antonio provides a bit more information noting that home equity lending was approved in 1997 by a constitutional amendment, which was followed by reverse mortgages in 1999.
One of the Texas consumer safeguards in the constitution requires owning equity in a house before anyone can apply for a reverse mortgage, which is a form of home-equity lending. When the safeguard was drafted, no one could foresee the new home-equity-for-purchase option.
Austin, TX based Scott Norman, a MetLife Bank retail manager and president of the Texas Reverse Mortgage Lenders Association, said the Texas Mortgage Bankers Association will seek a constitutional amendment change during the 2011 session of the Texas Legislature.
