Texas Prepares To Tweak Home Equity Law Again

Under current Texas law, a home equity loan must be "closed only at the office of the lender, an attorney at law, or a title company." This has proved to be a considerable obstacle for borrowers who are "homebound" or in quarantine, out of state, working overseas, or deployed in the armed forces.

A pair of bills has been filed with the Texas Legislature that would amend the Texas Constitution (which is where the home equity lending statute is located) to allow such borrowers to close a home equity loan at a remote location using online notarization. The closing could also be conducted through an agent acting under a power of attorney (POA) that expressly gives the agent that power. To become effective, the proposed amendment must be approved by a supermajority of the Legislature and a majority of voters next Fall.