Home Equity Lending Flashcards
Is a borrower’s lawsuit challenging the foreclosure of a home-equity line subject to the non-recourse provisions for recovery of attorney’s fees by the bank in defending the suit?
No. The separate cause of action creates an avenue for recovery of defense costs personally from the borrowers as the costs were not incurred related to the collection of the extension of credit.
Are claims based on constitutional non-compliance in the issuance of a HELOC subject to the statute of limitations?
Yes. liens securing constitutionally noncompliant home-equity loans are voidable and the residual four-year statute of limitations accrues from closing date.
Can an application for Expedited Foreclosure under the Texas Rules of Civil Procedure 736 be brought in a counter-claim?
No. A 736 proceeding cannot be brought as a counterclaim and the right to bring a 736 action when not plead in response to borrower’s lawsuit is not barred.
When does a cause of action accrue in a defaulted mortgage?
Four years after the last payment is due or four years from the date of acceleration of the debt.
Why do both owners and owner’s spouses have to consent to home equity lien?
Texas Constitution article XVI Section 50(a)(6)(Q)(xi) that states that a lender forfeits all principal and interest on an extension of credit if the lien was not created under a written agreement with the consent of each owner and each owner’s spouse.
What is a pretended sale?
One in which the parties do not intend title to vest in the purchaser, but rather that title will be divested within a certain amount of time by paying the specified amount.
How is a pretended sale determined?
1) the seller did not intend title to vest in the purchaser; (2) and the transfer involves a condition allowing the seller to reclaim title to the property after the loan is repaid.
