As you're most likely aware, Proposition 2 (Home Equity Lending) was on the constitutional amendment ballot yesterday. The amendment was overwhelmingly approved by voters.
What This Means for Community Bankers:
You have less than two months to get lenders, loan processors and compliance staff trained for the new laws, effective January 1, 2018. Texas community banks have been able to make home equity loans for nearly two decades, and with the exception of the line of credit (HELOC) addition, not much has changed - until now!
- Lowering the cap on home equity loan-related fees from 3 to 2 percent, but excluding certain additional fees from counting towards this cap;
- Allowing home equity loans against agricultural property;
- Allowing the refinancing of a home equity loan with a “traditional” mortgage loan; and
- Allowing advances on a home equity line of credit as long as the principal amount remained below 80 percent of the fair market value of a borrower's house.
What IBAT is Doing to Help You:
IBAT's Home Equity Summit is scheduled to take place December 5, 2017 in Dallas. Take advantage of this opportunity and join Karen Neeley, IBAT General Counsel and Senior Attorney with Kennedy Sutherland LLP, in addition to IBAT compliance staff Kelly Goulart and Janie Daniel, for a general discussion on home equity lending and the potential compliance pitfalls of the new revisions to law.
Specific Topics to be Covered:
- The basics of Texas homestead requirements.
- Permissible non-purchase money security interests in a Texas homestead.
- Required notices and delivery issues surrounding home equity lending in Texas.
- An exploration of Title 7, Chapter 153 of the Texas Administrative Code.
- What now? Understanding ‘cure’ provisions and what to do if (really when?) mistakes are made.
- What exactly changes on January 1, 2018?
- What exactly does not change on January 1, 2018?
If your bank currently makes home equity loans, or wants to get into the home equity loan business, this is a must-attend program. Resverve your spot today.