A recent law passed by the Texas Legislature has quietly hit the books, one that promises to have a significant and adverse effect on Texas consumers’ ability to obtain financing for the purchase of residential property. The legislation serves to place further limitations on a prospective purchaser’s financing options, at a time when the current negative banking environment already has severely restricted the viability of real estate transactions. 

Today’s market environment has made it extremely difficult for sellers and buyers of real estate to consummate a transaction under normal procedures. Due to a severe drop in employment rate, tighter lending standards by mortgage companies, and the lingering effects of the recession on all aspects of the U.S. economy, sellers and buyers are resorting to alternative ways for a buyer to get into a house they can’t qualify for, or conversely, a seller to get out of a mortgage they can...