In Texas, voter registration is at an all-time high but voter participation — particularly for constitutional-amendment elections — is nearing an all-time low. In 2003, more than 12 million Texans were registered to vote. That’s 76.25% of the state’s total voting-age population. But in the 2003 special constitutional election, turnout was less than 1.5 million, or 12% of all registered voters.

People don’t vote for a variety of reasons. Voter apathy (my vote doesn’t really count) and voter laziness (I don’t have a car or I can’t get there on time), top the list. Whatever the reason, with such low turnouts in these special elections, your vote does count! Constitutional-amendment elections are important because they alter Texas law, and some of the items up for vote Nov. 8 will likely affect you or someone close to you in the near future.

Out of the nine constitutional amendments on the Nov. 8 statewide ballot, there are three propositions related to the real estate industry that, if passed, will benefit Texans and the Texas economy. However, the ballot language for these amendments can be difficult to decipher.

Proposition 5
The language: “The constitutional amendment allowing the Legislature to define rates of interest for commercial loans.”

Backed by the Texas Association of REALTORS®, the Dallas Morning News, the Austin, El Paso, and San Antonio Chambers of Commerce, and dozens of other organizations across the state, Proposition 5 levels the playing field for Texas lenders by easing interest-rate caps in commercial loans.

Texas lenders are currently restricted by state usury laws. These laws prohibit them from using creative lending practices to finance commercial loans for business borrowers. These interest-rate caps for larger loans have forced Texas businesses to seek out-of-state lenders who are not restricted by Texas’ loan policies. Federal law allows lenders from outside the state to export their state’s interest rates and other loan terms to Texas, which places local banks at a competitive disadvantage. This stifles the Texas economy.

Exempting large commercial loans from state usury laws ensures that Texas businesses looking to build commercial properties such as shopping centers or skyscrapers can turn to Texas lenders for funding. Many consumers may be wondering how allowing greater freedom on big commercial loans affects them. Voting yes on Proposition 5 will boost the Texas economy by creating new jobs and tax revenues and enticing businesses to start up or expand in Texas. A healthier business economy also contributes to stronger local communities.

As a consumer, it’s important to note that the laws prohibiting exorbitant interest rates on personal property or commercial loans under $7 million will not be affected. This constitutional amendment will only apply to loans in excess of $7 million, offering Texas lenders a better chance at competing with out-of-state financial institutions.

Proposition 7
The language: “The constitutional amendment authorizing line-of-credit advances under a reverse
mortgage.”

Backed by the Texas Association of REALTORS®, Proposition 7 will give senior homeowners in Texas the same opportunity as older Americans in every other state. This amendment allows homeowners who are eligible for reverse mortgages to use the line-of-credit option.

Reverse mortgages have existed in the United States since 1989 and are designed to help financially strapped homeowners at least 62 years of age meet their daily expenses while keeping their home. Seniors can use the equity in their home to cover living costs without adding to their debt with monthly payments. Unlike a typical loan, reverse mortgage loans do not have to be paid back until the home is sold or unoccupied for one year, or when the mortgage holder dies. To protect the consumer, most programs only allow homeowners to borrow 60% of their home’s equity.

Currently, Texas law permits reverse mortgage advances to be made in monthly payments or in a lump sum. This means that a senior homeowner must calculate how much they think they are going to need and borrow it all at once, and taking a large sum of cash up front costs much more than the line of credit. Establishing a line-of-credit option gives seniors the ability to reduce interest fees and control how much they need and when.

According to Scott Norman, president of the Texas Association of Reverse Mortgage Lenders in Austin, reverse mortgages have tripled in the past three years and are likely to do the same in the next several years. This constitutional amendment, passed unanimously by the Texas Senate and the Texas House of Representatives, will help seniors meet their living and medical expenses without incurring too much debt at once. The line-of-credit option is offered by Fannie Mae for its Home Keeper mortgages and the Department of Housing and Urban Development (HUD) for its Home Equity Conversion Mortgages (HECM) in all other states. It’s time Texans get the same choice.

Proposition 8
The language: “The constitutional amendment providing for the clearing of land titles by relinquishing and releasing any state claim to sovereign ownership or title to interest in certain land in Upshur County and Smith County.”

Does anyone know what that means? Proposition 8 is a resolution that will help define the sometimes nebulous property rights of Texans. Since 1900, a vacancy statute has existed that outlined the process of determining if strips of land were vacant when they fell between tracts not retained by the state during the original settlement survey. Texans who believe they have found a vacant strip of land apply to the General Land Office (GLO), which in turn determines if a vacancy exists. If it does, the applicant receives one-sixteenth royalty of any minerals found under the vacant tract.

Landowners in Upshur and Smith County are threatened with losing their surface property rights to 2,000 mineral-interests owners who claim the land these individuals currently live on is vacant.

The residents living on this 4,600-acre tract purchased the land legally with no idea that a misapplication of the vacancy statue might ensue, threatening their private-property rights. Two thousand applications were filed with the GLO, which eventually ruled against them. This group is now appealing the GLO’s ruling to district court, which could take years. The pending court case has clouded the validity of these property owners’ land titles and opened the door for future cases. Failure to act could open Pandora’s box, making unjust seizure of Texans’ private land more commonplace.

Voting yes on Proposition 8 would amend the constitution’s vacancy statue for mineral rights and land in Upshur and Smith counties. While this amendment is specific to these tracts of land, voting yes will help set a precedent. The right to own private property is a bedrock principle for Texans, and voting yes will send that message.

Get out there and vote!
For information on where to vote, contact your county clerk or check local newspapers. For a list of clerks by county or other voting-related information, visit the Web site of the Texas Secretary of State.

Nov. 8 is an important day for Texans, so get out there and vote!