Houston judge had 3 home equity loans on house that was torched

HOUSTON Over five years, Texas Supreme Court Justice David Medina took out three high-interest, adjustable rate home equity loans amounting to nearly the full value of his home, which later burned in an arson fire. A Houston Chronicle review of the investigation leading to grand jury indictments against Medina and his wife show the details of the family’s serious financial problems before the home in northern Houston suburb of Spring burned last summer.

The Harris County District Attorney’s Office dismissed the indictments one count of evidence tampering against the justice and one count of arson against his wife Francisca citing a lack of evidence. But prosecutor Vic Wisner said the Medinas were still under investigation. The Harris County Fire Marshal’s Office said it became suspicious of the house fire after discovering a mortgage company sued in June 2006 to foreclose on the home and they discovered an accelerant in the rubble.

Investigators ruled it was intentionally set. Medina has denied that he or his family had any involvement in the fire. Medina bought the 5,100-square-foot home in 1992 shortly after it was built, according to county property records. The records did not list the purchase price, but the Harris County Appraisal District’s first appraisal of the home, in 1993, was $173,900. District officials said that would have been close to the purchase price.

The Chronicle ’s review of court records in the case found that Medina first obtained a cash-out refinance loan in September 1998. The loan was for $204,750, almost $4,000 more than the official appraised market value. But because state law limits home equity loans to 80 percent of the home’s fair market value, a private appraisal of at least $250,000 would have been required for the loan to be proper. In December 2001, Medina obtained a second refinance loan for $232,000.