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Thank you! Yes, I’ve read and re-read the section of the reg and the Guide on this, and you are right, it’s a little vague…..has made it a bit challenging for determing GAR on a lot of our LLC relationships.
It is my understanding that the Texas Constitution specifically prohibits balloon payments on home equity – see https://www.statutes.legis.state.tx.us/Docs/CN/htm/CN.16.htm#16.50 – Article 16, Section 50(a)(6)(L)(i) where it states that the home equity loan must be scheduled to be repaid
in substantially equal successive periodic installments, not more often than every 14 days and not less often than monthly, beginning no later than two months from the date the extension of credit is made, each of which equals or exceeds the amount of accrued interest as of the date of the scheduled installment…
BUT you REALLY need to seek legal advice when doing TX home equity.
