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 to “sections,” “subsections,” and “parts” in this memorandum refer to the various provisions of Section 50, unless otherwise stated. This 2013 update revises the May 19, 2010 memorandum as follows: 1. It adds the following new cases: Bardwell v. Bank of New York as Trustee for Certificate Holder CWABS, Inc., Asset Backed Certificates Series 2006-26 Co., 2010 WL 3446915 (N.D.Tex. 2010); In re Cadengo, 370 B.R. 681 (Bankr.S.D.Tex. 2007); Cerda v. 2004-EQR1 L.L.C., 612 F.3d 781 (5th Cir. 2010); In re Erickson, 2012 WL 4434740 (W.D.Tex. 2012); In re Gulley, 436 B.R. 878 (Bankr.N.D.Tex. 2010); In re Harmon, 444 B.R. 696 (Bankr.S.D.Tex. 2011); Hawkins v. Wells Fargo Bank, N.A., 2012 WL 2376272 (W.D.Tex. 2012); Modelist v. Deutsche Bank Nat. Trust Co., 2006 WL 2792196 (S.D.Tex. 2006); Pennington v. HSBC Bank USA, N.A., 2012 WL 4513333 (5th Cir.(Tex.) 2012); Penrod v. Bank of New York Mellon, 824 F.Supp.2d 754 (S.D.Tex. 2011); Poswalk v. GMAC Mortg., LLC, 2012 WL 2193982 (N.D.Tex. 2012); Priester v. JP Morgan Chase Bank, N.A., 2013 WL 539048 (5th Cir. 2013); Puig v. Citibank, N.A., 2012 WL 1835721 (N.D.Tex. 2012); In re Quigley, 2011 WL 1045224 (Bankr.N.D.Tex. 2011); Schanzle v. JPMC Specialty Mortg. LLC, 2011 WL 832170 (Tex.App.-Austin 2011); Sierra v. Ocwen Loan Servicing, LLC, 2012 WL 527940 (S.D.Tex. 2012); Sims v. Carrington Mortg. Services, LLC, 2012 WL 3636884 (N.D.Tex. 2012); Summers v. Ameriquest Mortg. Co., 2008 WL 123903 (Tex.App.-Hous. [14 Dist.] 2008); Summers v. PennyMac Corp., 2012 WL 5944943 (N.D.Tex. 2012). For ease of reference, the name of each case identified above is highlighted in bold typeface (see Section II. below). 2. It makes editorial changes and typographical corrections to the existing text. I. HOME EQUITY CONSTITUTIONAL AND INTERPRETATION AMENDMENTS Since the home equity provisions were first added to the Constitution effective January 1, 1998, and the home equity interpretations (“Interpretations”) were first adopted into the Administrative Code effective January 8, 2004 (see Section III.D.), both have been revised from time to time. In addition, new case law continues to clarify and interpret the constitutional home equity provisions. This memorandum attempts to incorporate these prior changes and present Texas home equity law as it currently exists. For these reasons, a proper understanding and application of home equity law and its interpretations may, and in some cases will, depend upon when a particular transaction closed or when the violation occurred.