Sims v. Carrington Mortgage Services, L.L.C.
Sims v. Carrington Mortg. Servs., L.L.C., 440 S.W.3d 10 (Tex. 2014)
- Court
- Supreme Court of Texas
- Decided
- 2014-05-16
- Docket
- 13-0638
What happened
The Simses' home-equity loan was restructured: past-due amounts were added to principal and the payments changed. They argued the restructuring was a new loan that broke the constitution's home-equity rules.
What the court decided
The Texas Supreme Court answered that as long as the original note is not satisfied and replaced and no new credit is extended, a restructuring that capitalizes arrears is not a new extension of credit that must meet the home-equity requirements again.
Why it may matter to you
Good to know if you are negotiating: Texas lenders can modify home-equity loans this way, so a modification is a realistic option to ask for.
Why it might not apply
The homeowners lost their challenge. A modification that adds new money or replaces the note is different.
Most useful when
- You are offered a modification that adds past-due amounts to a home-equity loan
How to cite it
The full citation for the first time you mention it, a short form for later, and a sample sentence you can adapt.
Sims v. Carrington Mortg. Servs., L.L.C., 440 S.W.3d 10 (Tex. 2014)Short formSims, 440 S.W.3d 10Draft — check it with free legal aid before you file or say it in court.
In Sims v. Carrington Mortg. Servs., L.L.C., 440 S.W.3d 10 (Tex. 2014), the court held that restructuring a home-equity loan by capitalizing past-due amounts, without satisfying the original note or extending new credit, is not a new extension of credit under the Texas Constitution. Here, [say in one sentence what happened in your case]
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