Home equity amendment passes
Last night, Texas voters overwhelmingly approved Proposition 8, the constitutional amendment designed to clarify certain provisions relating to the making of home equity loans and lines of credit. The clarifying provisions include providing:

--That the lender must only provide the borrower with copies of the documents signed at time of the closing of the home equity loan;
--That the prohibition of a borrower signing an instrument with blanks that are left to be filled in would only relate to blanks "relating to substantive terms of agreement";
--That a home equity loan cannot be secured by homestead property that on the date of closing is designated for agricultural use (other than dairy production); and
--That the 12-day cooling off period before a loan closing begins to run when a borrower submits an application.


Proposition 8 also provided for an exception to the prohibition that a new home equity loan cannot be made within one year of a previous home equity loan. In the case of a declared state of emergency (i.e., Hurricanes Katrina or Rita), a new home equity loan can be made before the one year anniversary of the original home equity loan.

Under the Constitution, an amendment approved by voters is effective on the date of the official canvass of returns showing adoption. The date of canvass, by law, is not earlier than the 15th or later than the 30th day after election day. Thus, Proposition 8 will take effect on the date of the official canvass.

Since you can only have one home equity loan at a time, I think that the lien on the second loan is invalid.

You may send out the revised notice 12 days before the effective date in order to be able to close on the revised forms. This gets a bit convoluted, but here is our quick assessment . . . as 12 days prior to December 4 is Thanksgiving Day, we are recommending that the new regime be followed starting on November 23, for closing on or after December 5.
For closings scheduled prior to December 4, we recommend that you follow the present procedures.

Do not use the revised notice until December 4, 2007. For loans in the pipeline that would close after December 4, give the new notice after December 4 and re-start the 12-day cooling off period

You've got to be joking! Gee....that will go over like a lead balloon. If I understand the above correctly, if a customer submits an application this Friday, that person will experience a 23 day waiting period????????

[SO - some apps. will have an extended time waiting for the effective date to come & the 12 days to start.

but wouldn't that be considered a bona fide emergency???