Lasalle Bank National Ass'n v. White

The Texas Constitution prohibits homestead property designated for agricultural use from being pledged to secure a home-equity loan, and mandates forfeiture of all principal and interest for loans so secured. In this case, a borrower obtained a home-equity loan secured by agricultural homestead property, disbursed a portion of the proceeds at closing to pay off constitutionally permissible purchase-money and tax liens (the “refinance portion”), and kept the remaining balance (the “cash-out portion”). The debtor defaulted on the note, and the trial court declared the entire debt, and the…