Form 11-5

Home Equity Compliance Certificate and Agreement

Basic Information

Date:

Borrower:

[Borrower’s Spouse:]

Borrower’s Mailing Address:

[Borrower’s Spouse’s Mailing Address:]

Lender:

Lender’s Mailing Address:

Home Equity Extension of Credit (Promissory Note)

Date:

Original principal amount:

Maturity date:

Property (including any improvements):

Fair Market Value of the Property:

A.Agreement of Parties

A.1.Borrower and Lender acknowledge and agree on the Fair Market Value of the Property and have signed a written acknowledgment of the Fair Market Value of Property on the date the Home Equity Extension of Credit is made.

A.2.The Home Equity Extension of Credit is not secured by any additional real or personal property other than the Property. Any provision contained in any other agreement between the Parties or any third party that gives Lender a security interest in any personal or real property other than the Property will not apply to the Home Equity Extension of Credit.

B.Representation and Warranties of Borrower

Borrower represents and warrants the following:

B.1.The Fair Market Value of the Property is an accurate value estimate based on an appraisal or evaluation not disputed by Borrower.

B.2.The original principal amount of the Home Equity Extension of Credit, when added to the aggregate total of the outstanding principal balances of any other indebtedness secured by valid encumbrances of record against the Property, does not exceed 80 percent of the Fair Market Value of the Property.

B.3.Borrower has not been required to pay, in addition to any interest, fees to any person that are necessary to originate, evaluate, maintain, record, insure, or service the Home Equity Extension of Credit that exceed, in the aggregate, 3 percent of the original principal amount of the  Home Equity Extension of Credit.

B.4.The lien securing the Home Equity Extension of Credit is a voluntary lien on the Property created with the consent of all owners and their spouses.

B.5.The Home Equity Extension of Credit is not secured by any additional property other than the collateral.

B.6.The Home Equity Extension of Credit is the only debt secured by the Property.

B.6.The Home Equity Extension of Credit is the only loan made pursuant to section 50(a)(6) of article 16 of the Texas Constitution and the only debt secured by the Property except the debts and liens described in the following documents: [specify].

B.7.The closing of the Home Equity Extension of Credit did not occur before the twelfth day after the later of the date that Borrower submitted a loan application to Lender for the Home Equity Extension of Credit or the date that Lender provided Borrower a copy of a notice concerning the Home Equity Extension of Credit making all disclosures required by section 50(g), article XVI, of the Texas Constitution.

B.8.The closing of the Home Equity Extension of Credit did not occur before one business day after the date that Borrower received a copy of the loan application if not previ­ously provided and a final itemized disclosure of the actual fees, points, interest, costs, and charges that were charged at closing.

B.8.Borrower understands that under the Texas Constitution this home equity loan may not be closed before one business day after the date that Borrower receives a copy of the loan application if not previously provided and a final itemized disclosure of actual fees, points, interest, costs, and charges to be charged at the closing of the loan unless Borrower consents in writing for this information to be originally given or modified on the date of clos­ing because of the existence of a bona fide emergency or other good cause. Borrower acknowledges the existence of a bona fide emergency or other good cause being [specify nature of bona fide emergency or other good cause; see 7 Tex. Admin. Code § 153.13] and con­sents to Lender providing a final itemized disclosure of actual fees, points, interest, costs, and charges to be charged on the loan on the loan closing date.

B.9.The closing of the Home Equity Extension of Credit did not occur before the first anniversary of the closing date of any other home equity extension of credit made under section 50(a)(6), article XVI, of the Texas Constitution and secured by part or all of the Prop­erty.

B.9.Borrower requests a closing of the Home Equity Extension of Credit before the first anniversary of the closing date of any other extension of credit made under section 50(a)(6), article XVI, of the Texas Constitution and secured by part or all of the property due to an emergency that has been declared by the President of the United States or the governor as provided by law and that applies to the area where the property is located.

B.10.The closing of the Home Equity Extension of Credit has taken place at the office of Lender, an attorney at law, or a title company.

B.11.Borrower has not been required to apply the proceeds of the Home Equity Extension of Credit to repay another debt.

B.11.Borrower has not been required to apply the proceeds of the Home Equity Extension of Credit to repay another debt except debt to another lender.

B.11.Borrower has not been required to apply the proceeds of the Home Equity Extension of Credit to repay another debt except debt secured by the Property.

B.11.Borrower has not been required to apply the proceeds of the Home Equity Extension of Credit to repay another debt except debt to another lender and debt secured by the Property.

B.12.Borrower has not assigned wages as security for the Home Equity Extension of Credit or signed a confession of judgment or power of attorney to Lender or anyone to confess judgment or appear for Borrower in a judicial proceeding.

B.13.Borrower has not signed any instrument relating to the Home Equity Extension of Credit in which blanks relating to substantive terms of the agreement were left to be filled in.

B.14.Borrower has received, as of the time the Home Equity Extension of Credit was made, a copy of the loan application and all executed documents signed by Borrower at clos­ing related to the Home Equity Extension of Credit.

B.15.All of the Property is the homestead of Borrower. No portion of the Property is nonhomestead.

B.16.The Home Equity Extension of Credit is not a form of open-end account that may be debited from time to time or under which credit may be extended from time to time.

B.16.The Home Equity Extension of Credit is a home equity line of credit constitut­ing an open-end account that may be debited from time to time and under which credit may be extended from time to time subject to the restrictions found at Tex. Const. art. XVI, § 50(t).

B.17.Borrower has been advised that Borrower may, within three days after the Home Equity Extension of Credit is made, rescind the Home Equity Extension of Credit with­out penalty or charge. [Include if applicable: Borrower’s Spouse has been advised that Bor­rower’s Spouse may, within three days after the Home Equity Extension of Credit is made, rescind the Home Equity Extension of Credit without penalty or charge.]

B.18.Borrower understands and agrees that Lender is relying on the truth and accu­racy of each of the representations and warranties in this Certificate and Agreement. Borrower acknowledges that Lender would not make the Home Equity Extension of Credit if any of the representations and warranties were not true and accurate.

   
[Name of borrower]

SUBSCRIBED AND SWORN TO before me on __________________ by [name of affiant].

   
Notary Public, State of Texas

   
[Name of borrower’s spouse]

SUBSCRIBED AND SWORN TO before me on __________________ by [name of affiant].

   
Notary Public, State of Texas

   
[Name of lender]

SUBSCRIBED AND SWORN TO before me on __________________ by [name of affiant].

   
Notary Public, State of Texas