{"id":400,"date":"2010-10-06T13:43:35","date_gmt":"2010-10-06T20:43:35","guid":{"rendered":"http:\/\/neighborhoods-in-austin.com\/tx\/?p=400"},"modified":"2010-10-06T13:43:35","modified_gmt":"2010-10-06T20:43:35","slug":"texas-attorney-general-moves-to-stop-foreclosures","status":"publish","type":"post","link":"http:\/\/neighborhoods-in-austin.com\/tx\/texas-attorney-general-moves-to-stop-foreclosures\/","title":{"rendered":"Texas Attorney General Moves to Stop Foreclosures"},"content":{"rendered":"

\"\"<\/a>In a bizarre twist to the mortgage crisis that has swept across the U.S. in recent months, the Attorneys General for dozens of states\u00a0are taking steps to halt foreclosures in the their states.\u00a0\u00a0<\/p>\n

Most recently, the Texas Attorney General<\/a>, \u00a0Greg Abbott, sent a letter<\/a>\u00a0to thirty or so mortgage-loan servicers doing business in Texas.\u00a0\u00a0Here is a\u00a0list of the mortgage companies receiving letters <\/a>from the AG’s office.\u00a0 The letter demands that the recipients\u00a0immediately halt:\u00a0\u00a0<\/p>\n

\u00a0\u00a0\u00a0\u00a0 1. all foreclosures;<\/p>\n

\u00a0\u00a0\u00a0\u00a0 2. all sales of properties previously foreclosed upon; and<\/p>\n

\u00a0\u00a0\u00a0\u00a0 3. all evictions of persons residing in previously foreclosed upon properties.<\/p>\n

The AG is\u00a0demanding\u00a0that the banks\u00a0cease these activities until a review of their internal processes\u00a0can be conducted.\u00a0<\/p>\n

Whether or not the AG has the actual authority to stop anything is arguable.\u00a0 After all, these are banks with contractual agreements with their customers (in the form of deeds of trust<\/a>) that spell out what the parties to that contract can and can’t do.\u00a0 What is clear in most deeds of trust is that\u00a0“if you don’t pay, you can’t stay.”\u00a0 That is, if you don’t make your mortgage payment then the mortgage company has the contractual right (with proper notice and opportunity to cure any default) to foreclose on the lien that secures your repayment.\u00a0<\/p>\n

The AGs are not saying that foreclosures in and of themselves are evil and their citizens\u00a0should be above the law and beyond their contractual agreements.\u00a0 That would be silly.\u00a0<\/p>\n

What they are <\/em>saying though\u00a0is that there\u00a0appears to be\u00a0evidence that some of these foreclosures may not be being handled in a lawful manner.\u00a0 In that case, they may be invalid, unlawful, and\/or most significantly, give rise to claims of fraud.\u00a0\u00a0The allegations are that of\u00a0widespread sloppiness, corner-cutting and perhaps outright fraud in the way some banks are processing the multitude of delinquent loans, foreclosures, loan modifications, evictions and the like that have inundated their industry over the last few years.<\/p>\n

Specifically, Mr. Abbott’s office charges these banks with, among other things:\u00a0 \"\"<\/a><\/p>\n

\u00a0\u00a0\u00a0\u00a0 Signing thousands of documents a month without even reading them;<\/p>\n

\u00a0\u00a0\u00a0\u00a0 Making affidavits to facts they couldn’t possible be aware of;<\/p>\n

\u00a0\u00a0\u00a0\u00a0 Notarizing documents before they are signed by the party; and<\/p>\n

\u00a0\u00a0\u00a0\u00a0 Signing documents with inaccurate statements about loan balances, changes, payments, etc.<\/p>\n

So what\u00a0can the Attorney General do about all is?\u00a0<\/p>\n

Well, what the office does <\/em>have the right to do is bring lawsuits against companies and individuals who\u00a0are alleged to have committed fraud against the state’s citizens.\u00a0 So what Mr. Abbott’s office has done is send a demand letter to these loan servicers saying basically ”\u00a0it has come to our attention that you may have engaged in\u00a0certain conduct and if you have we may sue you on behalf of our constituents for engaging in deceptive trade practices in our state”.\u00a0 (That’s not exactly what was said, but you get the point.)\u00a0 The demand letter is a required step under the Texas Deceptive Trade Practices Act before a lawsuit can be filed.<\/p>\n

Whether lawsuits will be filed or not, whether the loan servicers will be able to properly document their files, whether any missteps were made, etc., will remain to be determined.\u00a0 But it seems highly unlikely\u00a0that the recipients of the letter will be able (by any stretch of the imagination) to meet the\u00a010-day deadline issued for producing the documentation demanded by the AG’s office.\u00a0 That would seem to suggest that this move was merely a formality and a necessary first step in a grander plan.<\/p>\n

The processes for approving short sales, loan modifications, foreclosures, and the like these days is ludicrous at best.\u00a0 I have just negotiated my way through one recently for a client and it was\u00a0a joke how many twists and turns we took.\u00a0 That story will be the subject of another blog.\u00a0 But the point is that there are literally millions of stories just like mine waiting to be told. It’s an enormous problem waiting for a solution.\u00a0<\/p>\n

In its unprecedented move, the AG’s office has certainly added to the drama of this unfolding story.\u00a0 Whether it will be part of the solution remains to be seen.\u00a0\u00a0 At the moment it would appear that\u00a0it’s business as usual.\u00a0 See this video report regarding foreclosure activity as recently as yesterday in Houston’s massive Harris County<\/a>.<\/p>\n

<\/embed><\/object><\/p>\n

Stay tuned.<\/p>\n","protected":false},"excerpt":{"rendered":"

In a bizarre twist to the mortgage crisis that has swept across the U.S. in recent months, the Attorneys General for dozens of states\u00a0are taking steps to halt foreclosures in the their states.\u00a0\u00a0 Most recently, the Texas Attorney General, \u00a0Greg Abbott, sent a letter\u00a0to thirty or so mortgage-loan servicers doing business in Texas.\u00a0\u00a0Here is a\u00a0list […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[5,35],"tags":[102,101,100,103],"class_list":["post-400","post","type-post","status-publish","format-standard","hentry","category-austin-texas-homes","category-real-estate-sales","tag-attorney-general-greg-abbott","tag-foreclosures-in-austin","tag-foreclosures-in-texas","tag-mortgage-crisis"],"acf":[],"_links":{"self":[{"href":"http:\/\/neighborhoods-in-austin.com\/tx\/wp-json\/wp\/v2\/posts\/400","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/neighborhoods-in-austin.com\/tx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/neighborhoods-in-austin.com\/tx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/neighborhoods-in-austin.com\/tx\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"http:\/\/neighborhoods-in-austin.com\/tx\/wp-json\/wp\/v2\/comments?post=400"}],"version-history":[{"count":24,"href":"http:\/\/neighborhoods-in-austin.com\/tx\/wp-json\/wp\/v2\/posts\/400\/revisions"}],"predecessor-version":[{"id":428,"href":"http:\/\/neighborhoods-in-austin.com\/tx\/wp-json\/wp\/v2\/posts\/400\/revisions\/428"}],"wp:attachment":[{"href":"http:\/\/neighborhoods-in-austin.com\/tx\/wp-json\/wp\/v2\/media?parent=400"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/neighborhoods-in-austin.com\/tx\/wp-json\/wp\/v2\/categories?post=400"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/neighborhoods-in-austin.com\/tx\/wp-json\/wp\/v2\/tags?post=400"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}