Sylvia Zepeda v. Federal Home Loan Mtge Corp.

JAMES C. HO, Circuit Judge:

To protect homeowners, the Texas Constitution imposes a number of requirements before a lender may execute a deed of trust on a homestead to secure a loan. See generally TEX. CONST. art. XVI, § 50. At the same time, Texas courts have on various occasions allowed lenders to invoke the doctrine of equitable subrogation to obtain partial repayment of the loan, in the event that one of the requirements of the Texas Constitution is not met. See , e.g. , Benchmark Bank v. Crowder , 919 S.W.2d 657 , 662 (Tex. 1996). This case requires us to decide a dispute that falls at…