This Texas home equity review form is provided as a sample and should not be relied on as a substitute for independent legal counsel and review of a specific loan transaction.
“Investor” means the end purchaser of the loan.
[Name of investor]
Texas Home Equity Attorney Opinion, Checklist, and Lender Certification
Loan Number:
Borrower:
Property Address:
Lender:
Investor:
Investor purchasing guidelines require Lender to engage a licensed Texas attorney to provide this opinion and certification of a Texas home equity loan pursuant to article XVI, section 50(a)(6), of the Texas Constitution. Lender has submitted the following documents for attorney review (collectively, the “Loan Documents”):
1.Fully executed Texas home equity loan package
2.Appraisal
3.Initial loan application and twelve-day notice
4.Loan estimate
5.Title commitment
Sections A, B, and C of this form must be completed before the file is delivered for purchase.
A.Attorney Opinion Statement
After reviewing the loan file, Lender’s certification, and the requirements for Texas home equity loans set forth in article XVI, section 50(a)(6), of the Texas Constitution, I am issuing the following opinion:
_____ Yes, the loan satisfies the requirements for Texas home equity loans.
_____ No, the loan does not satisfy the requirements for Texas home equity loans.
B.Attorney Compliance Review
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§ 50(a)(6) Subsection |
Attorney Findings and Conclusions |
|---|---|
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A |
The loan is secured by a voluntary lien on the homestead created under a written agreement with the consent of each owner and each owner’s spouse. |
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B |
The loan is of a principal amount that when added to the aggregate total of the outstanding principal balances of all other indebtedness secured by valid encumbrances of record against the homestead does not exceed 80 percent of the fair market value of the homestead on the date the extension of credit is made. |
|
C |
The loan is without recourse for personal liability against each owner and the spouse of each owner, unless the owner or spouse obtained the extension of credit by actual fraud. |
|
D |
The loan is secured by a lien that may be foreclosed upon only by a court order. |
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E |
The loan does not require the owner or the owner’s spouse to pay, in addition to any interest or any bona fide discount points used to buy down the interest rate, any fees to any person that are necessary to originate, evaluate, maintain, record, insure, or service the extension of credit that exceed, in the aggregate, two percent of the original principal amount of the extension of credit, excluding fees for: |
|
F |
The loan is not a form of open-end account that may be debited from time to time. |
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G |
The loan is payable in advance without penalty or other charge. |
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H |
The loan is not secured by any additional real or personal property other than the homestead. |
|
I |
(Repealed) |
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J |
The loan may not be accelerated because of a decrease in the market value of the homestead or because of the owner’s default under other indebtedness not secured by a prior valid encumbrance against the homestead. |
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K |
The debt evidenced by the Loan Documents is the only debt secured by the homestead at the time the extension of credit is made unless the other debt was made for a purpose described by section 50(a)(1)–(a)(5) or section 50(a)(8), article XVI, of the Texas Constitution. |
|
L |
The loan is scheduled to be repaid in substantially equal successive periodic installments, not more often than every fourteen days and not less often than monthly, beginning no later than two months from the date the extension of credit is made, each of which equals or exceeds the amount of accrued interest as of the date of the scheduled installment. |
|
M(i) |
The loan was not closed before the twelfth day after the later of the date that the owner of the homestead submits a loan application to the lender for the extension of credit or the date that the lender provides the owner a copy of the notice prescribed by section 50(g), article XVI, of the Texas Constitution. |
|
M(ii) |
The loan was not closed before one business day after the date that the owner of the homestead receives 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 will be charged at closing. |
|
M(iii) |
The loan was not closed before the first anniversary of the closing date of any other extension of credit described by section 50(a)(6), article XVI, of the Texas Constitution secured by the same homestead property. |
|
N |
The loan was closed only at the office of the lender, an attorney at law, or a title company. |
|
O |
The loan permits a lender to contract for and receive any fixed or variable rate of interest authorized under statute. |
|
P |
The loan is made by one of the following that has not been found by a federal regulatory agency to have engaged in the practice of refusing to make loans because the applicants for the loans reside or the property proposed to secure the loans is located in a certain area: |
|
Q(i) |
The loan was made on the condition that the owner of the homestead is not required to apply the proceeds of the extension of credit to repay another debt except debt secured by the homestead or debt to another lender. |
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Q(ii) |
The loan was made on the condition that the owner of the homestead not assign wages as security for the extension of credit. |
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Q(iii) |
The loan was made on the condition that the owner of the homestead not sign any instrument in which blanks relating to substantive terms of agreement are left to be filled in. |
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Q(iv) |
The loan was made on the condition that the owner of the homestead not sign a confession of judgment or power of attorney to the lender or to a third person to confess judgment or to appear for the owner in a judicial proceeding. |
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Q(v) |
The loan was made on the condition that at the time the extension of credit was made, the owner of the homestead shall receive a copy of the final loan application and all executed documents signed by the owner at closing related to the extension of credit. |
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Q(vi) |
The loan was made on the condition that the security instruments securing the extension of credit contain a disclosure that the extension of credit is the type of credit defined by section 50(a)(6), article XVI, of the Texas Constitution. |
|
Q(vii) |
The loan was made on the condition that within a reasonable time after termination and full payment of the extension of credit, the lender cancel and return the promissory note to the owner of the homestead and give the owner, in recordable form, a release of the lien securing the extension of credit or a copy of an endorsement and assignment of the lien to a lender that is refinancing the extension of credit. |
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Q(viii) |
The loan was made on the condition that the owner of the homestead and any spouse of the owner may, within three days after the extension of credit is made, rescind the extension of credit without penalty or charge. |
|
Q(ix) |
The loan was made on the condition that the owner of the homestead and the lender sign a written acknowledgment as to the fair market value of the homestead property on the date the extension of credit is made. |
Attorney Certification and Signature
I certify that I am a licensed Texas attorney and have personally completed or overseen the review set forth above. I understand that this document constitutes an opinion of counsel on the matters set forth herein, and that my client, Investor, and Lender are entitled to rely on it as such.
My review has been based solely on the documentation provided by Lender, and Lender understands that in preparing this opinion, I have not made any independent inquiry or investigation beyond those documents.
By:
Printed Name:
Title:
[Firm Name:]
Date:
C.Texas 50(a)(6) Certification of Lender
This certification must be signed by an authorized representative of the original lender. This certification must be completed and may not be altered in any way.
Lender:
Borrower:
Loan/File Number:
By executing this document, I certify the following on behalf of Lender:
1.Each person consenting to the lien in this transaction did so voluntarily.
2.There is no additional collateral securing this transaction.
3.The loan was not closed before the twelfth day after the later of (a) the date the owner submitted an application to Lender for the loan or (b) the date that Lender provided the owner with a copy of the notice required by article XVI, section 50(g), of the Texas Constitution (the “Notice”).
4.The loan was not closed before the first business day after the owner received a copy of the application, as well as a final, itemized disclosure of the actual fees, points, interest, costs, and charges that would be charged at closing (unless a bona fide emergency existed and Lender obtained the written consent of the owner to (a) provide the document to the owner on the date of closing or (b) modify the previously disclosed information on the date of closing).
5.Lender has not been found by a federal regulatory agency to have engaged in the practice of refusing to make loans because the applicant(s) reside, or the property proposed to secure the loan is located, in a certain area.
6.Lender did not require the owner to apply the loan proceeds to repay another debt (except debt secured by the homestead or debt owed to another lender).
7.Lender did not require the owner to assign wages as security for the loan.
8.Lender did not permit the owner to sign any instrument in which blanks relating to substantive loan terms are left to be filled in.
9.Lender did not require the owner to sign a confession of judgment, or power of attorney to Lender or to a third person to confess judgment, or to appear for the owner in a judicial proceeding.
10.At the time of the loan closing, Lender provided the owner with copies of all documents signed by the owner related to the extension of credit, including a copy of the final application.
11.At the time of the payment of value or advance of funds, Lender had no knowledge that the fair market value stated in the Acknowledgment of Fair Market Value was incorrect.
12.Lender is a bank, savings and loan association, savings bank, or credit union doing business under the laws of the United States, and as such may make Texas home equity loans.
13.If the discussions with Borrower were conducted primarily in a language other than English, Lender provided, before closing, an additional copy of the Notice translated into the written language in which the discussions were conducted.
By:
Printed Name:
Title:
Date: