In the November 2013 constitutional amendment election, Burnt Orange Report endorses a vote FOR Statewide Proposition 5.
The text of Proposition 5 reads as follows:
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.
Yes, it permits reverse mortgages, which are currently not allowed in Texas. Yes, we are endorsing it. Hear us out on this one.
At first, as a group of people psychologically conditioned to oppose the phrase "reverse mortgage" thanks in no small part to Fred C. Thompson, we thought this amendment sounded bad. After all, the highly regulated housing market in Texas helped prevent a crash in the last decade, and this sounds like something that would weaken those safeguards to allow unscrupulous corporations to take advantage of Texas seniors.
However, these reverse mortgage loans are optional, and overseen and regulated by HUD. Anyone who takes the loan is required to complete counseling before it is issued, and a full notice of the terms of the loan is sent 12 days before it starts so a borrower can be super-duper sure it's on the up and up. This process actually has more protections in place than regular reverse mortgages, and is regulated by HUD, aka the Federal Government.
The name makes it sound bad, but the instrument is a pretty good option for a lot of seniors and there are a lot of safeguards in place -- including the additional Texas-specific safeguards that the amendment would provide.
We still have concerns that this may inadvertently open the door to bad actors in the housing market who try to prey on senior citizens. However, additional safeguards appear to be in place to prevent that. On the balance, this seems acceptable.
We narrowly endorse a vote FOR Proposition 5 in the November 2013 constitutional amendment elections.
Early Voting: October 21-November 1, 2013 | Election Day: Tuesday November 5
Photo Voter ID is required to vote. Click here for a list of acceptable forms of ID.
Endorsements are made based on a weighted consensus of the staff, which guides the type and tone of endorsement. Members of the Burnt Orange Report staff employed by campaigns abstain from voting on those races.