Wood v. HSBC Bank USA, N.A., 505 S.W.3d 542

In 2004 the Woods obtained a $76,000 home‑equity loan secured by their homestead; they later alleged the closing fees exceeded the 3% constitutional cap in Tex. Const. art. XVI, § 50(a)(6)(E).
The Woods notified the current note holder (HSBC) and servicer (Ocwen) of alleged constitutional noncompliance; the lenders did not cure within 60 days.
In 2012 the Woods sued seeking to quiet title (declaring the lien invalid under § 50(c)) and a declaratory judgment forfeiting all principal and interest under § 50(a)(6)(Q)(x); the trial court granted summary judgment for the lenders.
The court of appeals held such liens are voidable and subject to the four‑year residual limitations period; the Texas Supreme Court granted review.
The Supreme Court held that under § 50(c) a lien securing a constitutionally noncompliant home‑equity loan is not valid until cured, so no statute of limitations bars a quiet‑title action; however, the Court held the Woods’ constitutional forfeiture claim is foreclosed by Garofolo and must be pursued, if at all, as a contract/breach‑of‑loan‑terms claim.

Issue	Plaintiff's Argument (Woods)	Defendant's Argument (Lenders)	Held
Whether a statute of limitations bars a quiet‑title action to invalidate a lien securing a constitutionally noncompliant home‑equity loan	A § 50(c) lien that fails constitutional requirements is invalid until cured, so no limitations period applies to quiet‑title to remove an invalid lien	Such liens are voidable (can be validated by cure) and thus subject to the four‑year residual statute of limitations from loan closing	Held: lien is invalid until cured; no statute of limitations applies to quiet‑title under § 50(c)
Whether borrowers can obtain a declaratory judgment under the Constitution forfeiting all principal and interest	Forfeiture is available under § 50(a)(6)(Q)(x) when lender fails to cure within 60 days; plaintiffs seek declaratory relief on that ground	Lenders argued issue not properly before Court and that forfeiture is not a standalone constitutional remedy	Held: forfeiture claim as a constitutional cause of action is foreclosed by Garofolo; forfeiture must be pursued as a contract/breach‑of‑loan‑terms remedy, not by direct constitutional declaratory action

Doody v. Ameriquest Mortgage Co., 49 S.W.3d 342 (Tex. 2001) (holding a lender’s compliance with § 50 cure provisions can validate a previously noncompliant home‑equity lien)
Garofolo v. Ocwen Loan Servicing, 497 S.W.3d 474 (Tex. 2016) (section 50(a) does not create independent substantive constitutional causes of action; forfeiture is a term of the loan and must be enforced via contract remedies)
LaSalle Bank Nat’l Ass’n v. White, 246 S.W.3d 616 (Tex. 2007) (acknowledging invalidation of noncompliant lien and equitable subrogation principles)
Priester v. JP Morgan Chase Bank, 708 F.3d 667 (5th Cir. 2013) (held four‑year limitations period applies to claims challenging constitutional compliance of home‑equity liens)
Slaughter v. Qualls, 162 S.W.2d 671 (Tex. 1942) (void instruments can be attacked at any time; contrast with voidable instruments subject to limitations)