FORBEARANCE AGREEMENT

Exhibit 4.2

FORBEARANCE AGREEMENT

           FORBEARANCE AGREEMENT , dated as of February 6, 2008 (this “ Agreement ”), among (a) Home Solutions of America, Inc., a Delaware corporation (the “ Borrower ”), (b) each of the lenders party hereto (individually, together with its successors and assigns, a “ Lender ” and collectively, the “ Lenders ”), (c) each of the Debtors set forth in the Pledge and Security Agreement dated as of November 1, 2006 (collectively, the “ Debtors ” or each, a “ Debtor ”), (d) the Guarantors (as such term is defined in the Credit Agreement) (collectively, with the Debtors and the Borrower, the “ Credit Parties ” and each, individually, a “ Credit Party ”) and (e) Texas Capital Bank, National Association, as Lender, Administrative Agent, Arranger and Sole Bookrunner (the “ Agent ”).

WITNESSETH :

          WHEREAS, on or about November 1, 2006, the Borrower, the Agent, and the Lenders party thereto entered into the Credit Agreement dated as of November 1, 2006 (as it may be amended from time to time, the “ Credit Agreement ”). ¹

          WHEREAS, pursuant to the Credit Agreement, the Lenders agreed to make available a Revolving Credit Commitment in an aggregate principal amount at any time outstanding up to, but not exceeding, $45,000,000 (the “ Revolving Loan ”) subject to termination as set forth in the Credit Agreement.

          WHEREAS, pursuant to the Credit Agreement, the Lenders agreed to make Term Loan Advances in the aggregate principal amount up to, but not exceeding, $15,000,000 (the “ Term Loan ”) subject to termination as set forth in the Credit Agreement.

          WHEREAS, pursuant to the Credit Agreement, the Lenders have issued the following two letters of credit: (i) LC 676 in the original amount of $2,000,000 and (ii) LC 796 in the original amount of $500,000.

          WHEREAS, on or about November 1, 2006, the Debtors executed a Guaranty Agreement pursuant to which the Debtors guaranteed the prompt payment and performance of the Borrower’s obligations under the Credit Agreement.

          WHEREAS, on or about November 1, 2006, the Agent, the Lenders, the Borrower, and the Debtors executed a Pledge and Security Agreement (the “ Pledge Agreement ”) pursuant to which the Borrower and each Debtor pledged, assigned and granted to the Agent, the Lenders and each of their Affiliates, a security interest in all of such Borrower’s or Debtor’s right, title and interest in and to the Collateral (as such term is defined in the Pledge Agreement) to secure the prompt and complete payment and performance of the Secured Obligations (as such term is defined in the Pledge Agreement).

          WHEREAS, Fireline Restoration, Inc. (“ Fireline ”), a Subsidiary of the Borrower, is a Debtor under the Pledge Agreement.

          WHEREAS, on or about July 24, 2007, Fireline, a general contractor, entered into a settlement agreement (the “ Settlement Agreement ”) with Vista Royale Association, Inc. (“ Vista Royale ”) pursuant to which Vista Royale assigned to Fireline, subject to certain limitations set forth in the Settlement Agreement, Vista Royale’s right to claim in certain suits and to receive from the Florida Insurance Guaranty Association (“ FIGA ”) monies (the “ Settlement Proceeds ”) to be paid to Vista Royale in settlement of Vista Royale’s insurance claims (the “ Assigned Claim ”).

          WHEREAS, in or about August 2007, Fireline, Vista Royale, and the Borrower entered into an addendum to the Settlement Agreement (the “ Addendum ”). The parties to the Addendum agreed that any monies remaining after the Settlement Proceeds were applied in the manner set forth in the Addendum would be remitted to Fireline (such remaining amount, the “ Vista Proceeds ”).

          WHEREAS, on or about January 22, 2008, Fireline, the Borrower and Vista Royale entered into a settlement with FIGA concerning the Assigned Claim (the “ FIGA Settlement Agreement ”).

          WHEREAS, on or about October 17, 2007, the Borrower, the Agent (in its individual capacity and as Agent), and the Lenders party thereto entered into a consent agreement (the “ Consent Agreement ”) pursuant to which the Agent and the Lenders party thereto consented to the entry by the Borrower into the RGA Transaction (as such term is defined in the Consent Agreement).

           WHEREAS, in the Consent Agreement, the Borrower agreed that, notwithstanding any other provision of the Consent Agreement or any other Loan Document, the Borrower would repay the Obligations in full on or before December 31, 2007 (the “ Final Payment ”).

          WHEREAS, in the Consent Agreement, Fireline agreed that the Agent has a Lien on the FIGA Receivables (as such term is defined in the Consent Agreement), and that Fireline would take the steps set forth in Section 3.3 of the Consent Agreement.

          WHEREAS, the Borrower did not make the Final Payment on or before December 31, 2007.

          WHEREAS, failure by the Borrower to make the Final Payment on or before December 31, 2007 constituted an Event of Default under the Credit Agreement (the “ Payment Breach ”).

           WHEREAS, in addition to the Payment Breach, other Events of Default, including but not limited to an Event of Default arising from the Borrower’s failure to deliver its Borrowing Base Report for any applicable period after August 31, 2007, exist under the Credit Agreement (collectively, with the Payment Breach, the “ Existing Events of Default ”).

           WHEREAS, as of December 31, 2007, the outstanding principal balance on the Revolving Loan was $37,611,166.10 (the “ Current Revolving Loan Commitment ”) plus interest.

           WHEREAS, as of December 31, 2007, the outstanding principal balance on the Term Loan was $10,000,000 plus interest.

           WHEREAS, as of December 31, 2007, the Letter of Credit Liabilities in respect of issued and outstanding Letters of Credit totalled $2,385,471.69.

           WHEREAS, as of the date of the execution of this Agreement, Fireline is in the process of entering into a settlement agreement with Delmar Condominium Association (“ Delmar ”) pursuant to which Fireline expects it or certain other Credit Parties will receive certain proceeds (the “ Delmar Proceeds ”) in settlement of its claims against Delmar.

           WHEREAS, the Borrower currently anticipates receiving a Federal Income Tax refund (the “ Federal Income Tax Refund ”), subject to negotiation with the Internal Revenue Service, on or before April 15, 2008.

           WHEREAS, the Borrower has requested, and the Lenders have agreed, subject to the terms and conditions of this Agreement, to forbear during the Forbearance Period (as defined below) from exercising rights and remedies under the Loan Documents with respect to the Existing Events of Default.

          NOW, THEREFORE, in consideration of the premises and the agreements hereinafter contained, and for other good and valuable consideration, the parties hereto hereby agree as follows:

          1. Forbearance. During the period from the Effective Date (as defined below) through July 1, 2008 (the “ Forbearance Period ”), the Lenders hereby agree to forbear from exercising rights and remedies under the Loan Documents with respect to the Existing Events of Default; provided that the Forbearance Period shall automatically and immediately terminate, and the Lenders shall be entitled to exercise any and all rights and remedies under any Loan Document and applicable law without further notice, upon the occurrence of any of (i) any Default or an Event of Default (other than with respect to the Existing Events of Default) under any Loan Document or (ii) the failure by any credit party to satisfy the terms and conditions set forth in this Agreement (excluding the conditions set forth in Section 17 of this Agreement, which conditions shall constitute conditions to the effectiveness of this Agreement) (a “ Forbearance Event of Default ”).

          2. Maturity . Notwithstanding any other provision of this Agreement or any other Loan Document, the Borrower irrevocably and unconditionally covenants and agrees (a) to indefeasibly repay the Obligations in full, subject to and in the manner prescribed below, on or before July 1, 2008 (the “ Maturity Date ”) and (b) the Term Loan Commitment and the Revolving Credit Commitment will terminate on or before the Maturity Date as provided in this Agreement. The Borrower further agrees that any and all obligations to issue Letters of Credit under the Credit Agreement will terminate, and all outstanding Letters of Credit will be cash secured by the Borrower, on or before June 30, 2008.

          3. Control Agreements; Cash Sweeps .

               (a)  Establishment of Central Account. By February 15, 2008 (or by such later date as may be agreed by the Agent in its sole discretion), the Credit Parties shall execute control agreements (the “ Control Agreements ”) requested by the Agent and Lenders providing for a central sweep account at Texas Capital Bank, National Association (the “ Central Account ”) of all funds received by the Credit Parties deposited at any of the Credit Parties’ depository banks (the “ Collection Accounts ”). The Credit Parties represent and warrant that all of their depository accounts are listed on Schedule 3(a) annexed hereto.

               (b)  Remittance of Funds. The Credit Parties shall instruct all Account Debtors (as such term is defined in the Pledge Agreement) or obligors under the Receivables (as such term is defined in the Pledge Agreement) to remit all collections in respect thereof to such Central Account or to such other Collection Account as shall be reasonably designated by the Agent. The Credit Parties hereby agree that (i) all good funds on deposit in each of the Collection Accounts shall be swept pursuant to standing instructions (by wire or ACH transaction) on a daily basis to the Central Account and (ii) all collections and other amounts received by the Credit Parties from any Account Debtor or any other source shall, promptly upon receipt, be deposited into the Central Account. Each Credit Party shall cause its Affiliates, officers, employees, agents, directors or other Persons acting for or in concert with the Credit Party (each a “ Related Person ”) to (i) hold in trust for the Agent, for the benefit of itself and the Lenders, all checks, cash and other items of payment received by the Credit Party or any such Related Person on behalf of such Credit Party of any checks, cash or other items of payment, and (ii) within one (1) Business Day after receipt by the Credit Party or any such Related Person on behalf of such Credit Party of any checks, cash, or other items of payment, deposit the same into a Collection Account. The Credit Parties and each Related Person thereof acknowledge and agree that all cash, checks or other items of payment constituting the proceeds of Collateral are part of the Collateral.

               (c)  Crediting Payments. Upon the terms and subject to the conditions set forth in the Control Agreements, all amounts received in the Collection Accounts shall be wired each Business Day into the Central Account. Upon the occurrence of a Default or Event of Default (except with respect to the Existing Events of Default) under any Loan Document or a Forbearance Event of Default under this Agreement, the receipt of any funds by the Agent (whether from transfers to Agent from the Collection Accounts or otherwise) immediately shall be applied to provisionally reduce the Obligations outstanding under the Credit Agreement, but shall not be considered a payment on account unless such collection item is a wire transfer of immediately available federal funds and is made to the Central Account or unless and until such collection item is honored when presented for payment. Should any collection item not be honored when presented for payment, then the Credit Party shall not be deemed to have made such payment and interest shall be recalculated accordingly. Any collection item shall be deemed received by the Agent only if it is received into the Central Account on a Business Day on or before 11:00 a.m. Central time. If any collection item is received in to the Central Account on a non-Business Day or after 11:00 a.m. Central time on a Business Day, it shall be deemed to have been received by the Agent as of the opening of business on the immediately following Business Day.

          4. Remittance of Delmar Proceeds . Within three (3) Business Days after any Credit Party’s receipt of the Delmar Proceeds, and in any event no later than March 31, 2008, such Credit Party shall remit to the Agent the Delmar Proceeds; provided , however , so long as (i) no Default or Event of Default has occurred or is continuing under any Loan Document (except with respect to the Existing Events of Default) and (ii) no Forbearance Event of Default (as defined below) has occurred or is continuing under this Agreement, the Credit Party shall be entitled to retain thirty-five percent (35%) of the first $5,000,000 of the Delmar Proceeds plus the next $700,000 after the first $5,000,000 (the “ Retained Delmar Amount ”). In no event, however, shall the Retained Delmar Amount exceed the sum of $1,750,000 of the first $5,000,000 plus the next $700,000 after the first $5,000,000 is collected, or $2,450,000 in the aggregate. From and after the occurrence of a Default or Event of Default under any Loan Document (except with respect to the Existing Events of Default) or Forbearance Event of Default under this Agreement, any Credit Party in possession of the Delmar Proceeds shall, within three (3) Business Days after any such occurrence, remit to the Agent any portion of the Delmar Proceeds not previously remitted to the Agent (including, but not limited to, the Retained Delmar Amount). The Agent shall apply any Delmar Proceeds received from any Credit Party to reduce the Borrower’s outstanding obligations under the Revolving Credit Advances and, as set forth in Section 11 below, to permanently reduce the Current Revolving Loan Commitment.

          5. Remittance of Federal Income Tax Refund . Within three (3) Business Days after any Credit Party’s receipt of the Federal Income Tax Refund, and in any event no later than April 15, 2008, such Credit Party shall remit to the Agent the Federal Income Tax Refund; provided , however, so long as (i) no Default or Event of Default has occurred or is continuing under any Loan Document (except with respect to the Existing Events of Default) and (ii) no Forbearance Event of Default (as defined below) has occurred or is continuing under this Agreement, such Credit Party shall be entitled to retain twenty-five percent (25%) of the first $5,000,000 of the Federal Income Tax Refund (the “ Retained Federal Income Tax Amount” ). In no event, however, shall the Retained Federal Income Tax Amount exceed $1,250,000. From and after the occurrence of a Default or Event of Default under any Loan Document (except with respect to the Existing Events of Default) or Forbearance Event of Default under this Agreement, the Credit Party shall, within three (3) Business Days after any such occurrence, remit to the Agent any portion of the Federal Income Tax Refund not previously remitted to the Agent (including, but not limited to, the Retained Federal Income Tax Amount). The Agent shall apply any Federal Income Tax Refund received from the Credit Party to reduce the Borrower’s outstanding obligations under the Revolving Credit Advances and, as set