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