Most forms of home equity lending will remain illegal in Texas - at least for the next two years.

The massive campaign by bankers and consumers to amend Texas's constitutional prohibition of home equity lending has failed. It will be another two years - the next time the Lone Star State's legislature convenes - before the amendment can be considered again.

"It's back to the drawing board," said Rob Norcross, a spokesman for the Texas Conference for Homeowners' Rights, a group formed in 1992 specifically to lobby for home equity lending.

Home equity lending - except for home improvement - has been illegal in Texas for 156 years but is allowed in every other state.

Lenders have dreamed of making home equity loans in Texas for at least a dozen years. According to a report prepared by the state Senate, a minimum of $100 billion of home equity remains untapped.

This latest stab at changing the Texas constitution was buried in the House Financial Institutions Committee. The Speaker of the House, Pete Laney, an opponent of the home equity bill, had said that he would allow a floor vote on the matter if proponents could present a list of 100 representatives committed to the legislation.

Mr. Norcross said proponents were about a dozen votes short. The committee never voted on whether the entire House should decide whether home equity lending deserved to be considered by voters in a November referendum.

The legislature closed on Monday until 1997.

Several trade groups had launched an aggressive campaign to legalize home equity lending in Texas. An advertising campaign was initiated earlier this month.

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