LIT Comment: As Soon As Judge Higginbotham is on a Panel, Judge Higginson Complies with the Majority.
Tafacory v. Deutsche Bank (5th Cir., Dec. 2021)
DEC 17, 2021 | REPUBLISHED BY LIT: DEC 17, 2021
Before Higginbotham, Higginson, and Duncan, Circuit Judges. Per Curiam:*
The Texas Constitution provides that a home equity loan may not exceed eighty percent of the home’s fair market value on the date the loan is made. TEX. CONST. art. XVI, § 50(a)(6)(B).
If a lender violates this provision, it forfeits the loan’s principal and interest. Id. § 50(a)(6)(Q)(x).
However, a lender may conclusively rely on a homeowner’s written acknowledgement of a property’s fair market value when the acknowledged value matches the property’s appraised value, unless the lender has actual knowledge that this value is incorrect. Id. § 50(h).
On May 25, 2006, Masoud Michael Tafacory executed a $584,000 home equity loan with Long Beach Mortgage Company.