Texas Justices Set Boundaries For Mortgage Restructurings
Law360, Dallas (May 16, 2014, 2:48 PM EDT) -- The Texas Supreme Court held Friday that constitutional requirements for new home equity loans don't apply to loan restructurings as long as the original note is not satisfied and replaced, answering certified questions from the Fifth Circuit in a suit against Carrington Mortgage Services LLC.
The court was asked to interpret Section 50 of the Texas Constitution, which limits home equity loans to less than 80 percent of the home's value, and whether that limit applies when mortgage lenders agree to restructure loans for homeowners to help them avoid foreclosure. Homeowners Frankie and Patsy Sims sued Carrington in 2011, alleging the...
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