Balloon -- an installment that is more than an amount equal to twice the average of all installments scheduled before that installment.
Business Day -- all calendar days except Sundays and these federal legal public holidays: New Year’s Day, the Birthday of Martin Luther King, Jr., Washington’s Birthday, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day, and Christmas Day.
Closed or Closing -- the date when each owner and the spouse of each owner signs the equity loan agreement or the act of signing the equity loan agreement by each owner and the spouse of each owner.
Consumer Disclosure -- the written notice that must be provided to the owner at least 12 days before the date the extension of credit is made.
Cross-default provision – a provision in a loan agreement that puts the borrower in default if the borrower defaults on another obligation.
Date the extension of credit is made -- the date on which the closing of the equity loan occurs.
Equity loan – an extension of credit as defined and authorized under the provisions of Section 50(a)(6) of the Texas Constitution.
Equity loan agreement – the documents evidencing the agreement between the parties to an equity loan.
Fair Market Value or FMV – the fair market value of the homestead as determined on the date that the loan is closed.
Force-placed insurance – insurance purchased by the lender on the homestead when required insurance on the homestead is not maintained by the owner in accordance with the equity loan agreement.
Interest – interest as defined in the Texas Finance Code §301.002(4) and as interpreted by Texas courts.
Lockout provision – a provision in a loan agreement that prohibits a borrower from paying the loan early.
Owner – A person who has the right to possess, use, and convey, individually or with the joinder of another person, all or part of the homestead.
Preclosing Disclosure – The written itemized disclosure required by Section 50(a)(6)(M)(ii) of the Texas Constitution.
Two percent limitation – the limitation on fees in Section 50(a)(6)(E) of the Texas Constitution.