[lbo-talk] 17% of Texans owe more than their home is worth

[DSR]

 > I saw this on the Dallas Morning News website. This is the first article I have 
> seen on how many people in Texas owe more than their home is worth.
 
What they don't say is what impact deregulating the home equity loan market did in Texas.  Texas historically has had a history of "homestead first" policies that, up until about 10 or so years ago, prohibited homeowners from using home equity as collateral for loans.  Once that law was repealed and the home equity market opened up, Texans were inundated with home equity ads and offers from every direction.  This was a huge shift in how Texans, in general, had previously viewed ownership.  It also made them unprepared and ignorant of what questions they should have been asking themselves before getting into home equity loans.

The drop in interest rates that led to the big push for refinancing captured remaining gullible homeowners who were then tempted with refinancing their houses in addition to home equity loans, and brokers did whatever they could - legal or not - to push those deals through.  I had a broker try to tell me once that he could get my house refinanced for $130k even tho' I knew the going resale rate in the neighborhood was $115k, tops, for a larger home.  A lot of Texans fell for it.  (I did not.)

- Deborah