Journalist credits Texas REALTORS® for avoiding home equity trap
Houston Chronicle columnist Rick Casey, in his April 5 column, writes that Texas REALTORS® deserve a hug from their fellow Texans based on something the group did back in 1997. At the time, home equity lending wasn’t allowed in Texas. Other states had already jumped on the bandwagon, but the Texas Association of REALTORS® was concerned for homeowners. Writes Casey: “The REALTORS®' lobby …had always opposed any bills allowing home equity loans. Their concern: If people borrow too much against their houses, when the economy goes south foreclosures soar, prices sink and a lot of people are cast into misery. So they pressed for and won safeguards. The most important was that homeowners can only borrow against 80% of the appraised value of their homes. In California and some other states, they can borrow more than their homes' values. What's more, all the protections were written into the state Constitution, making it hard for legislators and lobbyists to quietly sabotage them. The result is that Texas didn't join the disastrous, equity-loan abetted, bubble-blowing frenzy of much of the rest of the nation.”

Source: Houston Chronicle