Lenders must originate Texas Section 50(a)(6) mortgages using the Texas Home Equity Security Instrument (First Lien) (Form 3044.1) and the specific Texas Section 50(a)(6) notes and riders, as well as a special Section 50(a)(6) borrower affidavit. Refer to B8-5-03, Texas Section 50(a)(6) Mortgage Documentation.
For all Texas Section 50(a)(6) mortgages, a title insurance policy written on Texas Land Title Association forms (standard or short form), supplemented by an Equity Loan Mortgage Endorsement (Form T-42) and a Supplemental Coverage Equity Loan Mortgage Endorsement (Form T-42.1), is required.
Note: There may be no exceptions or deletions to the coverage provided by Paragraphs 2(a) through (e) of the T-42 endorsement, and the endorsement must include the optional coverage provided by Paragraph 2(f), as well as the additional coverage provided by Endorsement T-42.1.
excludes coverage for a title defect that arises because financed origination expenses are held not to be “reasonable costs necessary to refinance” or
defines the “reasonable costs necessary to refinance” requirement as a “consumer credit protection” law since the standard title policy excludes coverage when lien validity is questioned due to a failure to comply with consumer credit protection laws.
The table below provides references to the Announcements that have been issued that are related to this topic.