A Texas homeowner applies for a home equity loan on March 1 and receives the required disclosure notice the same day. The lender wants to close as quickly as possible. Under Texas law, what is the earliest the lender can disburse the loan proceeds after closing?
Correct Answer
B) Three business days after closing, consistent with the federal TILA rescission period
Texas home equity loans under Article XVI, Section 50(a)(6) of the Texas Constitution are subject to the federal TILA three-business-day right of rescission, so the lender cannot disburse the loan proceeds until that rescission period has expired - three business days after closing.
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Related Concepts
Discount points are upfront fees paid to a lender at closing to reduce (buy down) the interest rate on a mortgage loan. One point equals 1% of the loan amount and typically reduces the rate by approximately 0.25%.
An FHA loan is a mortgage insured by the Federal Housing Administration that allows lower down payments and credit scores than conventional loans. It is designed to help first-time homebuyers and borrowers with limited resources.
A fixed-rate mortgage has an interest rate that remains constant for the entire term of the loan, resulting in equal monthly principal and interest payments throughout the life of the mortgage.
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- → Under Texas foreclosure law, a property is sold at a trustee's sale on the first Tuesday of the month. The winning bidder pays the full purchase price. Under Texas Property Code, when does the bidder receive a trustee's deed?
- → In Texas, the standard security instrument for real estate loans is a deed of trust rather than a mortgage. Which parties are involved in a Texas deed of trust?
- → Under Texas Constitution Article XVI, Section 50(a)(6), a home equity loan on a Texas homestead must comply with numerous constitutional requirements. All of the following are required provisions of a Texas home equity loan EXCEPT:
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- → A Texas lender fails to cure a constitutional defect in a home equity loan within the required timeframe. The borrower files a lawsuit. Under Texas Constitution Article XVI, Section 50(a)(6)(Q)(x), what is the potential penalty for the lender's failure to cure?
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Previous Question
Under Texas Constitution Article XVI, Section 50(a)(6), a home equity loan on a Texas homestead is subject to numerous consumer protections. All of the following are constitutionally required protections EXCEPT:
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In Texas, real estate transactions typically use a deed of trust rather than a mortgage. What is a key difference between a deed of trust and a traditional mortgage in terms of foreclosure?