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Unlike many of its neighbors, Texas has state laws that prohibited consumers from using home-equity lines of credit to increase borrowing to more than 80 percen
by jeromec 17y ago
Unlike many of its neighbors, Texas has state laws that prohibited consumers from using home-equity lines of credit to increase borrowing to more than 80 percent of the value of their homes
This certainly would fight inflationary/bubbly pressures. Forced financial responsibility. Nice. I wonder how many other states follow this model.
- gojomo 17y agoFor a long time, Texas prohibited second mortgages against a residence -- so even this allowance was a liberalization. I've also seen mentioned elsewhere that state banking regulation and monitoring was tightened after the S&L crisis of the 80's, which helped discourage the fast-and-loose real-estate loanmaking that drove the latest bubble elsewhere.
- ams6110 17y agoEven where states don't have such laws, responsible lending standards used to serve the same purpose. The traditional debt/equity ratio and payment/income ratios that were part of a mortgage loan qualification were relaxed or nearly eliminated in recent years, allowing many people to take on debt that in the past would have been seen as too risky.