Very interesting question.  First let me say that I am not licensed to practice law in Texas.  Given the complex requirements for such loans, it would be advisable to consult with a Texas attorney who is well versed in real estate/mortgage law.

But, from a cursory review, it appears that the Texas Constitution (Sec. 50, Art. XVI) provides various protections from forced sale.  It states "the homestead of a family, or of a single adult person, shall be, and is hereby protected from forced sale, for the payment of all debts except for...." and it goes on to list various exceptions (e.g. purchase money, taxes due thereon, an owelty of partition, refinance of a lien, home improvements, an extension of credit, etc.). 

If it is an extension of credit, it must be closed at the office of the lender, an attorney at law, or a title company (along with several other requriements). 

A refinance of debt secured by a homestead... that includes the advance of additional funds may not be secured by a valid lien against the homestead unless: (1) the refinance of debt is an extension of credit as described (which requires the closing at the office of the lender, an attorney at law or a title company); or (2) the advance of all the additional funds is for reasonable costs necessary to refinance such debt or for a purpose such as paying taxes or home improvements.

If there is other cash-out, it would appear that all of the requirements for an extension of credit must be complied with in order to have a valid lien against the homestead.

Though it seems like a simple question, as you can see, it is rather complicated.  Is the property a "homestead?"  Did the loan close at the office of the lender?  And, what were the cash-out funds used for?

Texas has some of the strongest protections for homeowners.  It may be worth speaking to a Texas attorney who is more familiar with the requirements, and how Texas courts have interpreted these Constitutional provisions.