- Bad Credit Texas Cash-Out Refinance Mortgage Lenders
- WHATS THE MINIMUM DOWN FOR TEXAS BAD CREDIT TEXAS MORTGAGE LENDER
- YES! TEXAS MORTGAGE WITH COLLECTION ACCOUNTS!
- TEXAS MORTGAGE WITH COLLECTIONS!! + WE SAY YES!!
- YES! TEXAS MORTGAGE WITH COLLECTION ACCOUNT
- Texas Mortgage Lenders Loan Programs Include:
- Bad Credit Texas Mortgage Lenders
- FHA Texas Mortgage Lenders
- Self Employed Mortgage Lenders
- Stated Income Texas Mortgage Lenders
- VA Texas Mortgage Lenders
- Texas FHA Mortgage Lenders
- Texas Bad Credit Debt Consolidation Mortgage Lenders
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Texas Bad Credit Mortgage Lenders For Texas Homestead Properties
• Additionally, Texas mortgage lenders points and fees cap will be tested for 50(a)(6) apps submitted
o The points and fees test will include all fees except those in this exclusionary list:
• Prepaid Interest
• All charges not paid by the borrower
• Excludable charges paid by the borrower:
• Appraisal Fee
• Appraisal Field Review Fee
• Survey Fee
• Lender’s Title Insurance
• If no Lender’s Title Insurance, then exclude Title Examination Fee
• Title Endorsement Fee
• Hazard Insurance
• Windstorm Insurance
• Flood Insurance
• Pay-Offs
• Lien Pay-Offs
• County Tax
• School Tax
Texas Bad Credit Mortgage Lenders Underwriting a 50(a)(6) Loan
• Maximum allowable LTV and combined LTV for any Texas Section 50(a)(6) loan is 80%;
• The lender must obtain a new full appraisal, including both interior and exterior inspections, to
determine current value on either a Uniform Residential Appraisal Report (Form 1004) or
Individual Condominium Unit Appraisal Report (Form 1073). The appraisal must be attached to
the written acknowledgment of fair value;
• The appraisal for the property and the acknowledgment of fair market value must not include
any property other than the homestead;
• The survey (or other acceptable evidence) must demonstrate that:
o the homestead property and any adjacent land are separate parcels; and
o the homestead property is a separately platted and subdivided lot for which full ingress
and egress is available
Common Send Bad Credit Texas Mortgage Approvals
- Texas Mortgage refinancing an existing purchase or rate/term refinance
- Teas refinancing an existing 50(a)(6) cash-out refinance
• 50(a)(1) Texas Mortgage Purchase Transaction
• 50(a)(4) * Texas Mortgage Refinance Transaction (Rate/Term)
• 50(a)(6) Texas Mortgage Refinance Transaction (Cash-Out) [NEW]
• 50(f)(2) **Texas Mortgage Refinance Transaction (Rate/Term) [NEW]
Texas Bad Credit Mortgage Lenders are now accepting Texas Mortgage applications on
Texas homestead properties for the following transaction types:
Submitting a Texas Loan Application
When you submit a Texas loan through the Texas Bad Credit mortgage lenders, the type of transaction must be
accurately identified on our Transaction Type Selection form. This form is to be made part of the
submission sheet you currently complete; if it hasn’t been added already, use the attached form and
include with the submission.
Texas Bad Credit Mortgage Identification of Transaction Type
Submission of a Texas loan without the Transaction Type Selection form will result in the application
not being accepted by the Setup Department. Further, if the transaction type noted on the form
proves to be inaccurate, the loan will be declined by Underwriting; without exception, this will not be
handled as a changed circumstance
Texas High-Cost or Texas Mortgage Lenders Tests
• Texas High-Cost will be tested on apps submitted for any of the above transaction types if:
o The Texas loan is made for consumer-purpose;
o The Texas subject property is borrower’s principal residence;
o The Texas loan amount is less than or equal to $226,550 (based on half of the maximum Fannie
Mae conforming limit loan amount for 2018)
High-cost thresholds are:
• APR exceeds the average prime offer rate (APOR) for a comparable transaction by
more than 6.5%
• Texas Total points and fees exceed 5% of the total loan amount
Texas Bad Credit Lending on Texas Homestead Properties Title Insurance Requirements
For all Texas Mortgage Lenders Section 50(a)(6) loans, the following title insurance policy and endorsements are required:
• Title insurance written on Texas Land Title Association forms (standard or short form);
o Title insurance policy cannot include language that:
▪ 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.
o There may be no exceptions or deletions to the coverage provided by Paragraphs 2(a)
through (e) (other than an exception or deletion relating to the exclusion of agricultural
homestead property) of the T-42 endorsement. The endorsement must include the
optional coverage provided by Paragraph 2(f), as well as the additional coverage
provided by Endorsement T-42.1.
• Equity Loan Mortgage Endorsement (Form T-42); and
• Supplemental Coverage Equity Loan Mortgage Endorsement (Form T-42.1)
Texas Bad Credit Mortgage Lenders Required Loan Documentation
50(a)(6) loans require the use of a special security instrument, notes, riders and a special affidavit that
must be prepared and recorded in connection with each Texas Section 50(a)(6) loan transaction.
• Texas Home Equity Security Instrument (Form 3044.1);
• Specific Texas Section 50(a)(6) loan notes and riders; and
• Texas Home Equity Affidavit and Agreement (Form 3185)
o Because of the complexities involved in closing Texas Section 50(a)(6) loans, the title
the company must be provided with a detailed closing instruction letter and require an
acknowledgment of its receipt;
o The closing instructions must require the title company to conduct its closings properly
to ensure compliance with Texas Constitution Section 50(a)(6) (Texas Home Equity
Affidavit and Agreement First Lien must be prepared and recorded in connection with
each Texas Section 50(a)(6) loan transaction to assist in a compliant closing
Lending on Texas Homestead Properties
Texas State Initial Disclosures
Complaints and Inquiries Notice (Only for a Second Home with APR > 10%)
• Conditional Qualification Letter (Form A) Disclosure of Multiple Roles in a Consumer Real Estate Transaction (Purchase only)
• Notice Concerning Extensions of Credit
Tex. Const. art. XVI, § 50(a)(6), (g)
Texas State Closing Documents
In compliance with Texas Government Code § 83.001, our closing documents are reviewed by Polunsky,
Beitel & Green (“PB&G”), a Texas licensed attorney. PB&G has confirmed that the DocMagic closing
documents are compliant.
There are ten documents tied specifically to § 50(a)(6) loans and three documents tied specifically to § 50(f)(2) loans.
• Acknowledgment of Encroachment/Hold Harmless
• Acknowledgment Regarding Fair Market Value of Homestead Property
Tex. Const. art. XVI, § 50(a)(6)(Q)(ix)
• Acknowledgment Regarding Voluntary Repayment of Existing Debt
Tex. Const. art. XVI, § 50(a)(6)(Q)(i)
• Acknowledgment as to Fair Market Value of Homestead Property
Tex. Const. art. XVI, § 50(f)(2)(C)
• Collateral Protection Insurance Notice
• Complaints and Inquiries Notice
• Designation of Homestead and Affidavit
• Discount Point Acknowledgment
Tex. Const. art. XVI, § 50(a)(6)
• General Warranty Deed with Vendor’s Lien (In Favor of Third Parties)
• General Warranty Deed with Vendor’s Lien (With Subordinate Lien)
• Home Equity Affidavit and Agreement (must be recorded with security instrument)
Tex. Const. art. XVI, § 50(a)(6)
• Home Equity Certificate from Originating Lender Regarding Compliance
Tex. Const. art. XVI, § 50(a)(6)
• Home Equity Election Not to Rescind
Tex. Const. art. XVI, § 50(a)(6)
