Home Equity Lending News

Texas Home Equity Legislation Fails to Pass


A bill that would have made it possible for members of the military and some of their civilian support colleagues to be able to remotely close on a second mortgage transaction failed to make it out of the state senate.

Texas House Bill No. 264 related to requirements for the physical presence of a borrower in signing certain documents related to a home-equity loan or a home-equity line of credit.

The bill sought to allow home-equity borrowers who are active-duty service members in the armed forces and other military officials who are outside the state at the time of closing the ability to sign.

Paul Kellogg, of Counsel, McGlinchey Stafford

“In lieu of closing a home-equity loan in person at the office of the lender, an attorney, or a title company, a borrower described by Subsection (a) may close the loan: (1) from a remote location using remote online notarization; or (2) through an agent who: (A) is acting under a durable power of attorney that expressly grants the agent the authority to engage in a home equity loan transaction on behalf of the borrower, regardless of where the borrower signed the power of attorney,” the bill states.

But the legislation, which proposed a constitutional amendment to loosen the restrictions on where a HEL or HELOC can close, did not make it out of the state senate, according to a report from McGlinchey Stafford’s Paul Kellogg, Louis Rossitto and David Tallman.

“The current law for home-equity loans requires the borrower to close the loan at the office of the lender, an attorney’s office, or the office of the title company,” the McGlinchey Stafford attorneys wrote. “House Bill No. 264 was trying to change that requirement for borrowers located outside of Texas because they, or their spouse, are on active duty with the United States Military, an officer of the Commissioned Corps of the United States Public Health Service, or members of the reserve components of the armed forces of the United States.”

Louis Rossitto, Associate, McGlinchey Stafford

They noted that the exemption would have additionally applied to civilian employees of the federal government connected to the armed forces if the employee is assigned to a foreign country or vessel.

 

 

 

 

 

 

David Tallman, Member, McGlinchey Stafford