Pseudonym v. Wachovia Mortgage Corporation

Appellant's Brief to the Dallas Court of Appeals


In a divorce case, the trial court awarded the marital residence to the wife. Wachovia held a lien on the residence resulting from a home equity loan taken out during marriage by the husband without the wife's knowledge. After divorce, the ex-wife sued Wachovia to remove the cloud on her title and to quiet title because the Texas Constitution requires both spouses to consent to a home-equity loan.

The Texas Constitution's home-equity loan provisions include some violations that can be "cured." For example, the fees incurred in taking out a home-equity loan may not exceed 3% of the amount of the loan. If a borrower complains to the lender, the lender may "cure" the defect by reimbursing funds to the borrower.

A borrower's claims against a lender are not subject to any specific statute of limitations. In the first case to address limitations and Texas home-equity loans, Rivera v. Countrywide Home Loans, Inc., 262 S.W.3d 834 (Tex. App. - Dallas 2008, no pet.), the parties agreed that Texas' residual four-year statute of limitations applied. Many other courts later invoked the four-year statute to bar borrowers' claims, stating that Rivera held that the four-year statute applied. However, some of these courts held that there is no statute of limitations on a suit to remove a cloud on title and to quiet title.

The divorce in this case took several years to conclude. When the ex-wife sued Wachovia, more than four years had passed since the ex-husband took out the home-equity loan. The ex-wife lost in the trial court on a summary judgment based primarily on limitations and secondarily on the contention that the ex-wife had ratified the home-equity loan.

This brief, filed by the ex-wife, argues (a) that a suit to remove a cloud on title and to quiet title cannot be barred by limitations; (b) that if it can, the four-year statute should apply only to "curable" violations of the home-equity loan provisions of the Texas Constitution, and not to incurable ones such as, in this case, the failure to obtain consent to the loan from both husband and wife; (c) that liens based on home-equity loans cannot be estopped or ratified into existence; and (d) that the summary judgment evidence was inadequate to show any estoppel or ratification of the home-equity loan by the ex-wife.

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Reference Info:Appellate Brief | State, 5th Circuit, Texas | United States

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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