Home equity lending could soon take a giant step toward becoming a reality in Texas, where such loans are presently not allowed. The state Legislature is expected to consider and probably will approve a change in the 156-year-old law that bans home equity loans.

"We think we have a very realistic chance this year," said Mark E. Huckabee, president of Western National Bank, Lubbock. Mr. Huckabee is chairman of the Texas Conference for Home Owners Rights, an organization formed three years ago by bankers to address issues in home equity lending.

Texas is the only state that does not allow borrowing against the equity in a home.

The momentum for changing the Texas Constitution seems to originate from an interim committee's December report to the state Senate.

"The Legislature should adopt a joint resolution putting a constitutional amendment before the voters so that the people of Texas may decide whether they want home equity lending in our state," the report said.

Bills in Texas' House of Representatives and Senate will be discussed by subcommittees within the next few weeks. In order for the constitution to be overhauled, two-thirds of each chamber most vote in its favor. Then, voters can ratify the change on Election Day with a majority vote.

State Rep. Debra Danburg of Houston, sponsor of the House bill, said this legislative session - Texas legislatures convene every two years - may be "the best chance we have ever had" to ratify home equity lending.

"My discussions with members convinces me that some members who did not feel comfortable with this in the past now feel comfortable with it," she said.

Should home equity lending become legal, the potential for bankers would be tremendous. Texas had a population of more than 18 million in 1993, according the U.S. Census Bureau. Nearly 1,000 banks are in Texas, according to the Texas Bankers Association. And, according to the Senate report, at least $100 billion of home equity remains untapped. The report estimates that home equity lending would infuse about $5 billion into the state's economy.

A recent survey by the American Financial Services Association, a trade group, found that 13% of all homeowners had home equity loans last year, up from 11% five years earlier.

Home equity lending in Texas has been a hotly argued issue for years. In the last Congressional session, it was a topic of debate during the legislative haggling over the interstate banking bill and the Fair-Credit Reporting Act, which failed to become law.

There is some opposition to home equity lending by Texas consumer groups. They contend that home equity lending would open borrowers to unfair lending practices and foreclosure rates would rise, especially during economic down cycles, among other reasons.

But Gayle Riley Vickers, assistant general counsel, Texas Bankers Association, said public opinion on home equity lending is changing.

"A lot of people have equity in their homes and they are good credit risks, and they see it as a good source of money.

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