Understanding Home Equity and Reverse Mortgage Foreclosures in Texas: Rules 735 & 736 Explained

Have you ever wondered why foreclosing on a home equity loan isn’t exactly the same as a standard mortgage? Or why reverse mortgages follow their own set of rules? In Texas, the process is guided by Rules 735 and 736 of the Texas Rules of Civil Procedure, which were created specifically for these types of loans. Let’s break it down so it makes sense.

Why Texas Needed Special Rules

Foreclosures can be complex, but home equity loans and reverse mortgages have unique protections and structures:

• Home equity loans are secured by your home, but Texas law gives homeowners extra safeguards to prevent abuse.

• Reverse mortgages are usually for seniors, where the lender pays the borrower over time and the loan balance grows until repayment is required. This makes the foreclosure process more sensitive and legally nuanced.

Recognizing these complexities, the Texas Legislature stepped in twice:

1. 1997 (75th Legislature, H.J. Res. 31) → Asked the Supreme Court of Texas to create rules for judicial foreclosures.

2. 1999 (76th Legislature, S.J. Res. 12) → Reiterated the need for clear procedures for home equity and reverse mortgage foreclosures.

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Rules 735 & 736: What They Cover

In response, the Supreme Court of Texas created:

• Rule 735 – Governs home equity foreclosures

  • Sets out notice requirements for borrowers

  • Defines deadlines and procedures for filing

  • Ensures the foreclosure process follows the judicial system, not just a lender’s timeline

• Rule 736 – Governs reverse mortgage foreclosures

  • Accounts for the unique borrower protections for seniors

  • Ensures the lender follows proper judicial procedures before taking action

  • Addresses repayment and default considerations specific to reverse mortgages

  
  

Why You Should Care About Recent Legislative Changes

Here’s the kicker: laws evolve. Recent legislative changes may affect how foreclosures happen today. This could include:

• New borrower protections

• Changes in notice or timing requirements

• Limits on fees or interest during foreclosure

That means even though Rules 735 and 736 set the standard, they might not reflect every new law. Lenders, attorneys, and homeowners alike need to check both the rules and the current statutes before moving forward.

Bottom Line

Texas doesn’t treat all foreclosures equally. Home equity and reverse mortgage foreclosures follow specific judicial rules, but these rules are always subject to review as the law evolves. Knowing the framework can help homeowners protect their rights and lenders avoid costly mistakes.

Understanding these rules isn’t just for lawyers—it’s for anyone who wants to be informed, prepared, and proactive about homeownership in Texas.