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Rule

TX Administrative Rule (Home Equity Loans)

Notary Law Update: TX Administrative Rule (Home Equity Loans)

State: Texas

Summary:
A new administrative rule clarifies what it means to hold a real estate closing for a home equity loan at the offices of a lender, an attorney, or a title company, in compliance with the Texas Constitution.

Signed:  November 06, 2020

Effective:  November 26, 2020

Chapter: N/A

Affects:
Amends Title 7, Section 153.15 of the Texas Administrative Code.

Changes:
  1. Clarifies that a real estate closing for a home equity loan that must occur at the office of a lender, an attorney, or a title company, may occur in any area -- including an indoor office or parking lot -- at the permanent physical address of the lender, attorney, or title company.
Analysis:
Texas has a unique homestead provision in Section 50, Article 16 (50(a)(6)(N)) of the Texas Constitution that states a homestead is protected from a forced sale for the payment of debt for an extension of credit unless the extension of debt is closed at the offices of a lender, an attorney, or a title company. Texas Notary Signing Agents who are asked to assist in the signing of loan documents for these types of loans have become accustomed to holding the loan signing appointments for these loans at the physical location of a lender, an attorney, or a title company. During the COVID-19 pandemic, mortgage loans not just in Texas but elsewhere were taken outdoors to enforce local health department social distancing guidelines and to prevent the spread of the virus by multiple individuals signing documents in close proximity with each other indoors. In some cases, individuals signing loans would drive up in their cars and were greeted outdoors by staff to sign papers in their cars. Others were brought to a signing table set up outdoors to sign documents. This new rule clarifies that these types of outdoor signing arrangements as well as others are permissible for the signing of a home equity loan as long as they are signed at the permanent physical address of the lender, attorney, or title company.

Read the administrative rule.

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