Paul Krugman points to this clear explanation by Alyssa Katz why Texas has escaped the worst of the housing crisis: tight regulation prohibiting cash-out mortgage refinancing and imposing a strict 80% maximum mortgage.
The reason isn´t a secret Austin cabal of Keynesian technocrats, but history:
The roots of this fierce resistance to debt’s temptations go deep in Texas history. Seven years before the republic joined the union in 1845, a bank panic and resulting foreclosures lost many homesteaders their property. Drawing from Mexican codes protecting landholders—much beloved by flocks of U.S. debtors who had taken refuge from creditors by relocating to Texas homesteads—the new constitution of the state of Texas forbade lenders from peddling mortgages to homesteaders.
So regulation is OK as long as it´s based on paternalistic Hispanic codes to protect the landed aristocracy. (I suspect, but can´t prove, a distant origin in the laws of old Castile, when borrowers would have been Old Christians and lenders conversos.) The Salamanca school of theologian-jurists produced an advanced theory of interest – time preference and all – in the 17th century, bypassing the knee-jerk Biblical ban on usury, so Spanish kings and viceroys had access to pretty good policy analysis if they wanted it.
For another counter-intuitive example of enlightened strong-government Texas policy, see the renewable electricity market.
The Texas regulations are presumably constitutional. Nothing stops California or Massachusetts from copying them.