In newspaper advertisements and radio commercials this week, Texas voters are being urged to repeal the state's constitutional ban on home equity loans. Texas is the only state that doesn't allow general home equity lending. But Proposition 8 on Tuesday's constitutional amendment ballot would, if ratified, eliminate many of the restrictions that have kept Texans from borrowing against the equity in their homes for more than 150 years.
Equity is the difference between the market value of a home and the amount owed on it.
The current prohibitions allow home equity loans only for sharply limited purposes, such as paying taxes or making home improvements. Supporters say lifting that ban would give Texans access to what's really their own money while still offering numerous consumer protections. Texas homeowners should have the right to decide what to do with their own assets. Not everyone is convinced. The Texas AFL-CIO and Texas Farm Bureau oppose the measure, saying the ban has shielded Texans in hard times.