Texas Attorney General Sends Demand Letter to Halt Foreclosures

October 6, 2010

The Texas Attorney General Greg Abbott has sent a demand letter to 30 banks asking that these institutions immediately “suspend all foreclosures, all sales of properties previously foreclosed upon, and all evictions of persons residing in previously foreclosed upon properties” until these institutions have reviewed files and taken appropriate steps to rectify possible past errors in documentation. This is in response to certain employees engaging in “robosigning” of documents.

 

Specific problems cited include the signing of thousands of documents per month and the signing of documents without reading them. Many banks have already suspended foreclosure proceedings in 23 other states, and it was just a matter of time before Texas entered that group of states.

 

This demand letter does not mean that the banks will stop their foreclosure process. It is merely a request. Many banks will voluntarily honor the request, but there may in fact be some that continue to proceed forward with the process without delay. We have provided you with a list of the banks that have received the request.

 

What this means is that there could be possible delays both to homeowners who are in the process of being foreclosed upon as well as buyers who are attempting to purchase bank owned properties. Here are some of the possible scenarios:

 

  • Foreclosures: Institutions that honor the AG’s request will likely postpone foreclosures that have already been posted and will likely not post additional foreclosures until the dispute has been resolved.

  • Foreclosed properties that are listed for sale: Institutions that honor the AG’s request will likely not enter into a sales contract for a listed foreclosure until the dispute has been resolved.

  • Foreclosed properties that are under contract for sale: Institutions that honor the AG’s request may delay closing a sales contract for a listed foreclosure under contract until the dispute has been resolved.

  • Short sales: Institutions that honor the AG’s request may choose to delay closing on a pending short-sale transaction until the dispute has been resolved.

  • Evictions of persons residing in previously foreclosed upon properties: Institutions that honor the AG’s request will likely not evict previous homeowners who continue to live in the foreclosed house until the dispute has been resolved. The institutions could, however, attempt to convince the occupant to leave the property by offering cash for keys.

  • Commercial vs. residential properties: The demand letter makes no distinction between commercial and residential properties.

 

Welcome to the ever changing world of real estate. We’ll keep you posted as we get updates to this situation. If you have any questions please don’t hesitate to call or email and, as always, I hope this information helps.

Stacy Jones is a REALTOR you can trust

 

 

 

 

 

 

 

 

 

Stacy Jones
832-722-7731

 

Stacy is a licensed REALTOR® and the team leader of The Jones Team, a group of REALTORS® in Katy, who work together to provide exceptional service for their clients. Stacy and his team specialize in the areas west of downtown Houston. These incredible real estate agents can help you buy or sell a home in locations such as Katy, Cypress, far West and Northwest Houston, Richmond, Fulshear, Sugar Land, Spring Branch, Memorial, Spring, Tomball, The Woodlands, and Magnolia. Whether you are in the market to sell a home, buy a home, have a question about home appraisal value, need advice about home staging ,or have any other real estate related questions, Stacy and The Jones Team are available to help.

*Information obtained from Texas Association of REALTORS

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