This memorandum will provide an overview of home equity lending embodied in Article XVI, Section 50, of the Texas Constitution and will also discuss some of the issues lenders face. The full text of Section 50, current to date, is attached to this memorandum (for ease of reference, the home equity and HELOC provisions are highlighted in bold typeface). All references in this memorandum to “sections”, “subsections”, and “parts” refer to the various provisions of Section 50, unless otherwise stated. This 2009 update revises the February 19, 2008 memorandum as follows: 1. It includes the 2008 revised home equity Interpretations §§153.11 – 153.14; §§153.22, 153.51, 153.84 and 153.95 by the Texas Finance and Credit Union Commissions (herein “Commissions”). Due to the 2007 constitutional amendments to Section 50 effective December 4, 2007, the Commissions amended §§153.13, 153.22, and 153.84 of the home equity Interpretations. (See Section III.D. of this memorandum.) 2. It discusses the following new cases: AMC Mortgage Services, Inc. v. Benny, No. 05-07- 00874-CV, (Tex.App.-Dallas, 2008); Fix v. Flagstar Bank, FSB, 242 S.W.3d 147 (Tex.App.-Ft. Worth, 2007, pet. pend.); Rivera v. Countrywide Home Loans, Inc., 262 S.W.3d 834 (Tex.App.-Dallas, 2008). (See Section II. below.)

Complete Memorandum