Texas Amends Provisions Regarding Home Equity Lending
The state of Texas has amended 7 TAC Chapter 153 Home Equity Lending. Key changes effective March 29th 2018 include:
- The current three percent fee limitation has been replaced with a two percent fee limitation. The revisions clarify that the fees included in the limitation calculation do not include certain third party charges such as appraisal fees, property survey fees, lender’s title insurance premium and title report fees.
- The current prohibition on home equity loan for agricultural property has been removed.
- Certain subsidies of depository institutions have been added to the list of lenders permitted to make home equity loans.
- A home equity loan is now allowed to be refinanced into a non-home equity loan if four conditions are met:
- One year timing limitation for refinance
- Limitation on advance of additional funds
- May not be more than 80% LTV (Loan to Value)
- Required 12-day disclosure to property owner providing information concerning consumer protections that may be lost by a refinance into a non-home equity loan.
- The revisions outline changes to the required 12-day consumer disclosure to conform to new requirements.
- The current 50% limitation on additional debits or advances for a home equity line of credit has been removed.
Review complete changes via the below link:
http://www.fc.texas.gov/homeinfo/homeindex.htm
Margaret Wright, JD, is regulatory compliance director with CLA. She is a graduate of Stonehill College and earned her juris doctor at Suffolk University Law School. She is admitted to the Massachusetts Bar.
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