Recommended: why Texas missed the foreclosure wave
So, as you are painfully aware by now, easy mortgage credit, especially cash out mortgages, really fueled the real estate bubble. So, how did Texas–the land of bubbles–miss the foreclosure tsunami (over 13% of Arizona mortgages are in foreclosure)? Maybe this Washington Post article has the answer:
Share on Facebook[In Texas] cash-outs and home-equity loans cannot total more than 80 percent of a home’s appraised value. There’s a 12-day cooling-off period after an application, during which the borrower can pull out. And when a borrower refinances a mortgage, it’s illegal to get even a dollar back. Texas really means it: All these protections, and more, are in the state constitution. The Texas restrictions on mortgage borrowing date from the first days of statehood in 1845, when the constitution banned home loans.
