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.