The Texas Joint Financial Regulatory Agencies published guidance this morning on home equity lending during the Coronavirus pandemic. A link to the publication can be found here.
Here is a summary of the guidance:
- One year seasoning requirement – An existing home equity loan may be refinanced without regard to when the a previous home equity loan was closed on the property. Ordinarily, a homeowner must wait at least one year from the closing date of their existing home equity loan before they may obtain a new home equity loan. Because the Governor of Texas has a declared a state of disaster in Texas, the usual 1 year seasoning requirement for home equity loans does not apply while the state of disaster persists.
- Payment deferrals and modifications – The joint agencies provide an opinion that home equity loans may be modified to defer payments and extend the maturity date during this crisis without violating the rules found in the Texas Constitution.
- Location of Closing – Lenders must comply with the requirement that the home equity loan be closed at an authorized location (the lender’s office, a title company office, or an attorney’s office). There is no exemption for emergencies. The agencies do provide an opinion that the so long as the closing occurs at the permanent physical location on the premises of an authorized location, you may close outside of the office, such as in the parking lot or some other outside location on the premises.