Texas Estates Code 1161.203 – Loan Requirements
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(a) Except as provided by Subsection (b), the guardian of the estate shall take as collateral the borrower’s note for the money that is loaned, secured by:
(1) a mortgage with a power of sale on unencumbered real estate located in this state worth at least twice the amount of the note; or
(2) collateral notes secured by vendor’s lien notes.
(b) The guardian may purchase vendor’s lien notes if at least one-half has been paid in cash or its equivalent on the land for which the notes were given.
Terms Used In Texas Estates Code 1161.203
- Estate: means a decedent's property, as that property:
(1) exists originally and as the property changes in form by sale, reinvestment, or otherwise;
(2) is augmented by any accretions and other additions to the property, including any property to be distributed to the decedent's representative by the trustee of a trust that terminates on the decedent's death, and substitutions for the property; and
(3) is diminished by any decreases in or distributions from the property. See Texas Estates Code 22.012 - Guardian: A person legally empowered and charged with the duty of taking care of and managing the property of another person who because of age, intellect, or health, is incapable of managing his (her) own affairs.
- Lien: A claim against real or personal property in satisfaction of a debt.
- lien: include :
(1) a deed of trust;
(2) a vendor's lien, a mechanic's, materialman's, or laborer's lien, an attachment or garnishment lien, and a federal or state tax lien;
(3) a chattel mortgage;
(4) a judgment; and
(5) a pledge by hypothecation. See Texas Estates Code 22.024 - Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Mortgagee: The person to whom property is mortgaged and who has loaned the money.
- Written: includes any representation of words, letters, symbols, or figures. See Texas Government Code 311.005
(c) Except as provided by Subsection (d), a guardian of the estate who lends estate money may not pay or transfer any money to consummate the loan until the guardian:
(1) submits to a reputable attorney for examination all bonds, notes, mortgages, abstracts, and other documents relating to the loan; and
(2) receives a written opinion from the attorney stating that the documents under Subdivision (1) are regular and that the title to relevant bonds, notes, or real estate is clear.
(d) A guardian of the estate may obtain a mortgagee‘s title insurance policy on any real estate loan instead of an abstract and attorney’s opinion under Subsection (c).
(e) The borrower shall pay attorney’s fees for any legal services required by Subsection (c).