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Proposition 2 - MCTP PAC Rating: AGAINST
Texas

Proposition 2 - MCTP PAC Rating: AGAINST

proposition

The constitutional amendment to establish a lower amount for expenses that can be charged to a borrower and removing certain financing expense limitations for a home equity loan, establishing certain authorized lenders to make a home equity loan, changing certain options for the refinancing for home equity loans, changing the threshold for an advance of a home equity line of credit, and allowing home equity loans on agricultural homesteads

Assertions

Vetting Committee Recommendation: AGAINST Source

Submitted by john wertz on 2017-11-05 19:50:55

Major Issues

Texas for Fiscal Responsibility (Empower Texans)

TFR Stance: Support Proposition 2 Our Reasoning: The less that government interferes in the free market, the more options citizens will have and the less they will pay. 

From Vetting Committee Member - Dale Fessendun - "OTOH - Support for this proposition seems to come from realtors, so it may be at the expense of borrowers".

North Texas Citizens Lobby

1.) Is it “constitutional”? (Does it support the constitutional republic) - NO

Since property ownership is the bedrock of our republic it shall be protected at all costs once obtained. If opponents that are quoted in the 2 state publications mentioned in the video above are correct, Prop 2 would actually: • erase constitutional protections for homeowners which were carefully negotiated when home equity loans were first authorized. • It would disguise the potential for lender fee increases because the amendment excludes from the calculation of the fee cap certain items that generally represent the highest up?front costs ? that of third?party appraisals, surveys, title insurance, and title examination reports. • Lenders would have greater incentive to increase their own origination fees despite the two percent limit. • And Prop 2 increases the prospective profits from loan origination fees, and would encourage improvident lending. Lenders could later sell badly performing loans on the secondary market – such was the behavior that contributed to the 2007?2009 recession.

2.) Is there a need? (Do all the People have a need for and benefit from the proposed government intervention?) NO

3.) Affordability? (Can the People afford it? Is the cost equal and uniform?) NO

Not if Purchasers and Lenders are encouraged to repeat the behavior that contributed to the housing recession of 2007 thru 2009. Prop #2 passed unanimously in both the House (143-0) and Senate (30-0).

Dennis Tibbs - MCTP PAC Vetting Committee Member

AGAINST -This proposition would make many changes to fees, expenses and risks associated with home equity loans. In certain instances this would help home owners & some farmers. However, it also removes the protections that have reduced the risk of a home owner loosing their home if they have difficulty paying back the loan. It would allow a foreclosure without a court order!