From the Office of State Senator John Carona

FOR IMMEDIATE RELEASE
January 26, 1999
CONTACT: John Krueger, 512/463-0116

LEGISLATURE PASSES AMENDMENT TO PROVIDE REVERSE MORTGAGES FOR TEXAS SENIORS

(AUSTIN)--The Texas Senate gave final approval to SJR 12 by State Senator John Carona (R-Dallas) which will finally provide for reverse mortgages in Texas. "Texas senior citizens have waited a long time for access to reverse mortgage loans, and SJR 12 will remove the current roadblocks," Senator Carona announced.

Reverse mortgages are loans which seniors qualify for based upon the equity in their home, but no repayments are required while they live in the home. Two years ago, the Texas Legislature passed provisions authorizing these loans, but the wording resulted in conflicts with federal guidelines. "Despite the Legislature's actions last session, no loans have been offered in Texas because of the shortfalls of what we did," Senator Carona explained.

SJR 12 addresses the inconsistencies with federal guidelines which have kept Fannie Mae from purchasing these loans. Fannie Mae is the federally chartered underwriter of mortgages in the secondary market and currently underwrites more than 90 percent of reverse mortgages nationally. "Unlike two years ago, Fannie Mae has now committed to purchasing reverse mortgages made in Texas, which means we can fulfill our promise to our senior citizens," Senator Carona stated.

This issue will be placed on the November ballot for approval by the voters of Texas. If approved, the changes will take effect January 1, 2000.

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