NRMLA MEMBER ALERT: HECM for PURCHASE IN TEXAS

We want to alert NRMLA members of concerns raised regarding the offering of a true HECM for purchase loan program in Texas. 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. It is presently unclear whether the provisions in the Texas State Constitution that authorize and govern reverse mortgage transactions in Texas contemplate a purchase money reverse mortgage transaction. Legislative changes (and related Constitutional amendments) or regulatory interpretive guidance may be desirable in order to address this issue. However, while enabling legislation (and related Constitutional amendments) may be prudent, given the nature of the Texas legislative process, unfortunately, currently it seems unlikely that the legislative process in Texas will allow us to address the matter this year.

This alert is not meant to serve as legal advice. NRMLA counsel has consulted with Texas counsel, Texas title agencies and several other settlement service providers (including document preparation companies), and NRMLA continues to consider several avenues to address this matter. Until further clarification is gained, we urge members to consult with their own vendors and counsel and compliance experts for advice and possible alternatives in assisting seniors with their home purchase financing and reverse mortgage needs in Texas.

Darryl Hicks, Vice President
Communications

Posted by Phillis Jackson on April 3rd, 2009 1:30 PMPost a Comment (0)