A home on a chalkboard with home loan written on the board

Recent Development: Home-Equity Loans

In 2016, the Texas Supreme Court ruled that liens securing constitutionally non-compliant home-equity loans are invalid until cured. See Wood v. HSBC Bank USA, N.A., (Tex. May 20, 2016). See also TEX. CONST. art. XVI, § 50(c). (“No . . . lien on the homestead shall ever be valid unless it secures a debt described by this section.”). Given this, upon receipt of a valid constitutional violation notice, Lenders and/or Servicers should work diligently to cure any and all violations, or risk losing any right to foreclose in the event of a default on the underlying mortgage.