In a ruling that has industry-wide significance, a Locke Lord team led by Daron Janis (Boston), Scott Hastings (Dallas) and David Foster (Austin) obtained a judgment in favor of Freddie Mac before the Texas Supreme Court, which preserved equitable subrogation for Texas home-equity loans. The Fifth Circuit certified the following question of law to the Supreme Court of Texas: Is a lender entitled to equitable subrogation, where it failed to correct a curable constitutional defect in the loan documents under section 50 of the Texas Constitution? The Texas Supreme Court answered yes, explaining that the only factor for determining whether a home-equity lender is equitably subrogated to a prior valid lien on homestead property is if the lender paid off the prior lien. Additional team members included Michael Powell, Elizabeth Lang Miers, Cynthia Timms and Tom Loose (all of Dallas).
Posted on April 30, 2020