# Staub v. BBVA USA Supreme Court of Texas, No. 24-1057 **Staub v. BBVA USA, No. 24-1057 (Tex. May 29, 2026). Holding: The forfeiture remedy in Article XVI, Section 50(a)(6)(Q)(x) applies to a lender's breach of the constitutional obligations enumerated in Section 50(a)(6), not to every breach of a home equity loan agreement, so Young could not obtain forfeiture of the loan amount for BBVA's overcharge.** Practice areas: financial services, texas constitution ## Key issues - The home-equity forfeiture remedy in Article XVI, Section 50(a)(6)(Q)(x) applies only to a lender's breach of constitutionally mandated loan terms, not to every breach of a home equity loan agreement. - A lender that overcharged about $10,000 in interest on a roughly $700,000 line of credit, then tendered the overcharge plus interest, did not forfeit the entire loan amount. ## Factual History In early 2018 BBVA USA offered Parker Young a home equity line of credit with a promotional rate 0.26% below the Wall Street Journal prime rate, conditioned on drawing on the line and holding a $25,000 balance on the fifteenth day after closing, a condition that did not apply to loans secured by a Texas homestead (Opinion, PDF p. 3). Young obtained a loan under the promotion in May 2018 secured by his homestead, and as the Constitution requires, the agreement states that BBVA forfeits the loan amount if it fails to comply with its obligations and does not correct the failure within sixty days of the borrower's notice, "but only to the extent required by Section 50(a)(6)" (Opinion, PDF p. 3). In late 2020 Young found that BBVA had charged him a higher interest rate than agreed because it wrongly applied the balance condition, and BBVA did not respond when he pointed out the condition did not apply to homestead loans (Opinion, PDF pp. 3-4). By then Young had paid about $253,000 and owed about $448,000, and BBVA had overcharged him about $10,000 in interest on a line of about $700,000 (Opinion, PDF pp. 2, 4). ## Procedural History After sixty days passed, Young sued BBVA for breach of contract, seeking forfeiture of the loan amount and interest or, alternatively, actual damages (Opinion, PDF p. 4). BBVA admitted its error and tendered the overcharge plus interest, but the parties disagreed on whether it must also forfeit the loan, with Young estimating his damages at over $600,000 and BBVA at about $9,500 plus attorney's fees (Opinion, PDF p. 4). On cross-motions for summary judgment the trial court held Young was not entitled to forfeiture, and the Fifth Court of Appeals (Dallas) affirmed, relying on *Garofolo v. Ocwen Loan Servicing* and holding that the remedy covers constitutional, not contractual, obligations (Opinion, PDF pp. 4-5). The vehicle in this Court is a petition for review filed by Janice Staub and Young, argued February 10, 2026, and decided May 29, 2026 (Opinion, PDF pp. 1, 20). ## Issues Presented The question is whether a borrower may invoke the forfeiture remedy of Article XVI, Section 50(a)(6)(Q)(x) for any lender breach of a home equity loan agreement or only for breaches of constitutionally mandated conditions (Opinion, PDF p. 2). Petitioners ask whether forfeiture is available when the contract incorporates Section 50(a)(6), the lender admits it breached by charging an excessive rate and misapplying payments for years, the lender could have cured by offering to refinance, and it failed to cure within sixty days (Brief on the Merits (Petitioner), PDF p. 12). BBVA adds whether forfeiture is available where the only purported cure, refinancing, would not have resolved a billing error unrelated to the loan's terms (Brief on the Merits (Respondent), PDF p. 11). ## Standard(s) of Review The Court interprets the Constitution relying heavily on its literal text and reading Section 50(a)(6)'s provisions together as a whole, and seeks to give effect to the intent of the voters who adopted it, including by considering the contemporaneous explanations of the Legislature that proposed it (Opinion, PDF pp. 7-8, 12-13). ## Legal Arguments **Whether forfeiture applies to any breach of a home equity loan agreement.** **Young and Staub (Petitioners):** The plain meaning of the lender's "obligations under the extension of credit" encompasses all of a lender's obligations under the loan, not just the few provisions the Constitution requires, and in *Garofolo* the Court held that a breach of a loan agreement incorporating the forfeiture provision triggers forfeiture if one of the six cures could have remedied it (Brief on the Merits (Petitioner), PDF p. 21; Petition for Review (Petitioner), PDF p. 18). **BBVA (Respondent):** For 27 years Texas courts have construed the remedy as limited to breaches of constitutionally mandated terms; BBVA included all required terms and breached none, petitioners read an isolated phrase out of context, and forfeiture is available only if one of the six curative measures would actually cure the breach, which the refinancing cure would not (Brief on the Merits (Respondent), PDF pp. 11, 19; Response to Petition (Respondent), PDF p. 17). ## Stated Reasons the Court Should Take the Case Petitioners argued that the court of appeals' reading conflicts with the plain, unambiguous constitutional language, and with *Garofolo* (Petition for Review (Petitioner), PDF p. 18). BBVA answered that petitioners cite no case supporting their view and manufacture a conflict (Response to Petition (Respondent), PDF p. 17). ## Oral Argument - **Conceded breach of a loan term.** Asked about noncompliance, BBVA's counsel said it did not comply with a HELOC term, a wrong interest rate since reimbursed, but that this did not violate section 50. (Oral Argument, 0:42:57; 0:43:27) - **Catch-all provision.** Asked why the forfeiture provision should not be read in light of the Constitution's own priorities, petitioners' counsel said it lists five specific items and then a sixth catch-all. (Oral Argument, 0:17:46; 0:19:19) - **Twenty-five obligations.** Asked the scope of what is necessary to comply, BBVA's counsel said the key language returns to the 25 listed obligations a lender must meet. (Oral Argument, 0:26:55) - **Loan agreement terms.** Asked whether deferring under the agreement's option B triggers forfeiture if not cured, petitioners' counsel said the test is whether the lender violated the loan agreement's terms. (Oral Argument, 0:14:55) - **Wrong interest rate.** Asked if it is strange that charging the wrong rate is not among the 25 items, BBVA's counsel said no; they are procedural guardrails ensuring borrowers are treated fairly. (Oral Argument, 0:43:52; 0:44:00) - **Supplemental statutes.** Asked about a statute adding obligations that trigger forfeiture, BBVA's counsel said he did not know, but a statute cannot overcome the Constitution's list of lender obligations. (Oral Argument, 0:41:36; 0:42:04) - **Regulations.** Asked what regulations have to do with it, petitioners' counsel said the question is the Texas Constitution, so what an agency says should not matter. (Oral Argument, 0:11:40) - **No cases.** Asked whether technical violations have arisen in decades under the provision, BBVA's counsel said no case has made this argument, and the loans are paid-for homes used as collateral. (Oral Argument, 0:34:21; 0:35:08) ## Practice Area Tags financial-services, texas-constitution ## Procedural Posture/Vehicle Petition for review from the Fifth Court of Appeals (Dallas) after cross-motions for summary judgment; argued February 10, 2026, and decided May 29, 2026 (Opinion, PDF pp. 1, 4, 20). ## Amicus Involvement - [Independent Bankers Association of Texas, et al.](https://search.txcourts.gov/SearchMedia.aspx?MediaVersionID=099cd8f5-611c-4aab-88ef-f0915c10a08e&coa=cossup&DT=BRIEFS&MediaID=e1b6f955-79ad-419b-99c8-0548bd2b3a3f) support BBVA: an inadvertent lender mistake unrelated to a constitutional requirement cannot support forfeiture of an otherwise valid home equity loan. - [Texas Bankers Association](https://search.txcourts.gov/SearchMedia.aspx?MediaVersionID=789eb20b-e610-4a92-8529-2db80f6c1321&coa=cossup&DT=BRIEFS&MediaID=5f49d842-86f6-4cde-a1e3-1f11cbacd9ec) filed an amicus brief. ## Holding The forfeiture remedy in Article XVI, Section 50(a)(6)(Q)(x) applies to a lender's breach of the constitutional obligations enumerated in Section 50(a)(6), not to every breach of a home equity loan agreement, so Young could not obtain forfeiture of the loan amount for BBVA's overcharge (Opinion, PDF pp. 2, 12, 20). ## Court's Reasoning **Text and structure.** "Obligations under the extension of credit" appears in a section that outlines the terms a home equity loan must include for the lender to have a forced sale on default, so it is naturally read to refer to the terms and conditions found within Section 50(a)(6), and a reference to "the extension of credit" does not import outside documents into the Constitution (Opinion, PDF pp. 8-9). *Sims v. Carrington Mortgage Services* addressed what counts as a new extension of credit, not the reach of the remedy (Opinion, PDF p. 9). **Curative measures.** The six cures address only constitutional breaches, the refinancing cure in subparagraph (f) is expressly confined to them by the phrase "with any modifications necessary to comply with this section," and *ejusdem generis* points the same way, so the refinancing cure cannot correct BBVA's billing error (Opinion, PDF pp. 10-12). The required written notice summarizes constitutional rights, so it does not mislead borrowers (Opinion, PDF p. 12). **History.** The 1997 amendment responded to the federal tax change and preemption litigation, and the drafters' bill analyses and the House Research Organization's analysis described the forfeiture remedy as aimed at enforcing constitutional obligations (Opinion, PDF pp. 13-16). The reading also fits Texas policy favoring freedom of contract and disfavoring forfeiture (Opinion, PDF p. 17). **Precedent.** *Garofolo* held that Section 50(a)(6)'s terms and conditions are not substantive constitutional rights and that a post-origination breach of them may give rise to a contract claim for which forfeiture can sometimes be an appropriate remedy, and *Garofolo*'s description of the remedy as "arguably open-ended" does not extend it outside the Constitution; earlier cases such as *LaSalle Bank v. White* describe forfeiture for violations of the terms of Section 50(a)(6) (Opinion, PDF pp. 17-19). In nearly three decades the Court's cases reflect a common interpretation that the remedy applies exclusively to constitutional violations (Opinion, PDF p. 19). ## Disposition Court of appeals' judgment affirmed (Opinion, PDF p. 20). ## Vote Breakdown Justice Bland delivered the opinion of the Court, with no separate writings (Opinion, PDF p. 1). --- Source: The SCOTX Report, https://scotxreport.com/cases/24-1057. AI-generated summary of the Court's opinion, orders and the parties' briefs, with pin cites to the page of each document; verify against the Court's own documents at search.txcourts.gov.