Texans to Vote on New Reverse Mortgage Option

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Texans for Proposition 5 forms Committee

Scott Norman

Because of Texas’ protective homestead laws and constitutional standards, reverse mortgages are one of the most consumer friendly mortgage loans in the country.

This fall, Texans will go to the polls to decide whether to approve a constitutional amendment that would authorize senior Texas homeowners, age 62 or older, to use a reverse mortgage to purchase a home. Currently, Texas is the only state that does not provide for a “reverse mortgage for purchase loan program” for homeowners.

“With a reverse mortgage for purchase, homeowners who are downsizing or relocating to be closer to medical care or their families will have a new option enabling them to finance the purchase of their new home and save thousands of dollars over the life of their loan,” said Scott Norman of Sente Reverse Mortgage in Austin.

Proposition 5 calls for an amendment to the Texas Constitution to authorize a new “Reverse Mortgage for Purchase” loan program in Texas, including the nationally popular Home Equity Conversion Mortgage that is insured by FHA, and additionally to require new written consumer disclosures be given seniors at least 12 days before closing of any reverse mortgage loan in Texas. The Texas legislature, with the support of consumer groups, including AARP, placed Proposition 5 on November’s ballot after approving Senate Joint Resolution (SJR) 18 by a combined vote of 170-1. SJR 18 was authored by Senator John Carona (R-Dallas) and sponsored by Representative Mike Villarreal (D-San Antonio).

“Because of Texas’ highly protective homestead laws and constitutional standards, reverse mortgages are one of the most consumer friendly mortgage loans in the country. Supporting Proposition 5 will be a vote to strengthen those protections,” said Mr. Norman.

A 26-company committee, Texans for Proposition 5, has been formed in support of this constitutional amendment. The committee, headed by Mr. Norman, will focus on educating Texans on the benefits of reverse mortgages as a retirement option.

Proposition 5 will be on the November 5 statewide ballot and titled “The constitutional amendment to authorize the making of a reverse mortgage loan for the purchase of homestead property and to amend lender disclosures and other requirements in connection with a reverse mortgage loan."

For more information about Proposition 5, please contact Scott Norman at 512-423-4545.

Twitter: @texansforprop5

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