§ 890A. Mortgage of Residential Homestead Interest of a Minor Ward
890A. Mortgage of Residential Homestead Interest of a Minor Ward
(a) In this section:
(1) “Home equity loan” means a loan made under Section 50(a)(6), Article XVI, Texas Constitution.
(2) “Residence homestead” has the meaning assigned by Section 11.13, Tax Code.
(b) This section applies only to a minor ward who has a guardian of the person but does not have a guardian of the estate.
(c) When a minor ward has an interest in a residence homestead and the net value of the interest does not exceed $100,000, the guardian of the person of the ward may apply to the court for an order authorizing the guardian to receive an extension of credit on the ward's behalf that is secured, wholly or partly, by a lien on the homestead. Proceeds of the home equity loan attributable to the minor's interest may be used only to:
(1) make improvements to the homestead;
(2) pay for the education or maintenance expenses of the ward; or
(3) pay the outstanding balance of the loan.
(d) Venue for the application is the same as venue for an application for the appointment of a guardian for a ward. The application must contain the same information required by Section 889A of this code.
(e) On receipt of the application, the court shall set the application for hearing at a date not earlier than the fifth day after the date the application is filed. If the court considers it necessary, the court may cause citation to be issued.
(f) The guardian of the person, before the hearing, shall file a surety bond with the county clerk to the same extent and in the same manner as a parent or managing conservator of a minor is required to provide a surety bond under Section 889A of this code.
(g) The procedures and evidentiary requirements for a hearing of an application filed under this section are the same as the procedures and evidentiary requirements for a hearing of an application filed under Section 889A of this code.
(h) At the time of the hearing of the application filed under this section, the court, on approval of a bond required by Subsection (f) of this section, shall authorize the guardian to receive the extension of credit sought in the application if the court is satisfied from a preponderance of the evidence that the encumbrance is for a purpose described by Subsection (c)(1) or (2) of this section and is in the ward's best interests.
(i) A guardian of the person executing a home equity loan on a ward's behalf must account for the transaction, including the expenditure of the loan proceeds, in the annual accounting required by Section 741 of this code.
(j) The court may not discharge a guardian's sureties from all further liability under a bond required by this section or another provision of this code until the court:
(1) finds that the guardian used loan proceeds resulting from the ward's interest solely for the purposes authorized by this section; and
(2) has been presented with satisfactory evidence that the home equity loan has been repaid and is no longer considered an outstanding obligation.
(k) A minor ward may not disaffirm a home equity loan authorized by the court under this section.