Home Equity

Home Equity Consitutional Amendments

Case Update
Acorn, AARP, and others filed suit against the Finance Commission and the Credit Union Commission, asserting that the home equity interpretations go beyond their authority and are the result of illegal and unfair rule making.
So, what does this mean to Texas lenders?  Nothing for now.  Remember that the interpretations provide "safe harbors" for lenders complying with them until such time as they are overturned.
This case is still pending:

  • Click here for a copy of the original pleading.
  • Click here for a copy of IBAT's Amicus Brief.

What You Should Know
With home equity lending relatively new to Texas bankers - and with a very confusing law - the IBAT Legal Department has provided information on this page as well as specific answers, in a Q&A format (see below), to help clarify the situation.

The Texas home equity law, passed in 1997, still leaves much to be desired for community banks. The good news is that the Supreme Court continues to rule in favor of the lending industry (and justifiably so!). IBAT, along with TBA and others, has consistently supported banking's interest in these cases, and we will continue to press forward to attain meaningful changes for community banks.

Finance Commission Resource Material. The Finance Commission has a page devoted to home equity in Texas.  It includes information on legislation, regulatory interpretations, Finance Commission studies, and other helpful material.

Home Equity Modification Interpretation
Many bank customers have recently requested modification of their home equity loans as rates have fallen. IBAT General Counsel Karen Neeley received an important interpretive letter from the banking regulators permitting this.

The IBAT Legal Department continuously answers questions from bankers about Home Equity issues. These questions, and their answers, are then published in The Texas Independent Banker magazine in the Legal Ease column. For your convenience we have posted recent Legal Ease questions and answers concerning Home Equity lending and HELOCs. To access the Home Equity Lending Q&A, click here. To access the HELOC Q&A, click here.

    Please Note: The information contained in this page does not constitute legal advice; always consult counsel as additional facts may render results which differ from the short answer.