A Halt on Foreclosures in Texas?

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Earlier this month, the Texas Attorney General issued a letter to 30 mortgage loan servicers doing business in Texas to stop foreclosures and sales of foreclosed properties. The letter demands a halt to all foreclosures, all sales of properties previously foreclosed upon, and all evictions of persons residing in previously foreclosed upon properties, until mortgage companies have completed a review of their processes, including whether employees or agents “robosigned” affidavits and other documents recorded in Texas.

Demand letters were sent to:

  • American Home Mortgage Servicing, Inc.
  • American General Finance, Inc.
  • AmTrust Mortgage Corporation
  • Aurora Loan Servicec, Inc.
  • Bank of America
  • Carrington Mortgage Services, LLC
  • Cenlar, FSB
  • JP Morgan Chase & Co.
  • CitiMortgage, Inc.
  • EMC Mortgage Corporation
  • First Horizon National Corp.
  • Ally Financial, Inc./GMAC
  • Home Loan Services
  • HomEq Servicing, Inc.
  • HSBC North America Holdings, Inc.
  • Litton Loan Servicing, Inc.
  • MGC Mortgage, Inc.
  • Midland Mortgage Company
  • MorEquity, Inc.
  • National City Mortgage c/o PNC Financial Services Group, Inc.
  • Nationstar Mortgage Company
  • Ocwen Loan Servicing, LLC
  • OneWest Bank Group LLC
  • PHH Mortgage Services Corporation
  • Saxon Mortgage Services, Inc.
  • Select Portfolio Servicing, Inc.
  • Vanderbilt Mortgage and Finance, Inc.
  • Washington Mutual
  • Wells Fargo & Company
  • Wilshire Credit Corporation

How will this demand letter affect transactions?

If any of these institutions choose not to respond to the demand letter, the transactions in which that institution is a steward of should continue as if no letter had been sent. If an institution does choose to respond to the demand letter, the transaction could be affected in one of the following ways:

  1. They (the institution) could recall posted foreclosures and halt any additional foreclosure postings until the problem has been resolved.
  2. They could halt entering into sales agreements for properties that are foreclosed and listed for sale.
  3. They could delay closing on foreclosed properties that are currently under contract of sale.
  4. The closing dates for short sales could be delayed until a resolution has been determined.
  5. Evictions for tenants at sufferance on foreclosed homes may be delayed until a resolution has been found.

In my opinion, this turn of events will serve to only delay foreclosures, causing a looming backlog which will likely surge onto the market at some time in the future. As everyone knows, a surge of extra supply with limited demand, particularly with distressed sales, will only help drive market prices down as individual sellers are forced to compete with lenders who need to get REO property off their books in a hurry.



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Comments

  1. I quailified for a modification completed it and went under review,was denied yet was told i could reapply again and again,so i was approved again made my payments on time again and was denied,I knew I had a IRS lean on property,and a simple title search tells that,yet now they are saying because of the lean i can’t qualifie for a modification,and that makes sense,yet i paid 6- $3500 payments before i was told that,I would have tried to clear it or put the property up for sale instead of waiting till the last minute to save it,now they say days before the sale date I don’t qualifie,none of my payments went towards the past due or principle,they say it went into a special account to pay fees,I heard about the MERs scam and went to the court house and found the original mortgage holder reasignded loan to the present national lean holder through MERS and it was never registered at clerks office,from what I’m hearing thats illegal,my sale date is feb 1 my mortgage company says they requested a 30 day delay,yet i have to call 4 days before sale to see if it’s approved,I think I may have to take a pre forcloser class and file a chapter 13 at the last minute to stop the sale,is there any other option this late in the game,I want to stop it with a demand letter for them to prove they hold the mortgage, without me having to bend over for a lawyer,I want a lawyer,yet I want to stop sale first so I don’t go in distressed,I can file chapter 13 to buy time as the last resort,any sugestions. timpinelake at yahoo dot com

    • Tim, this sounds very complex. I recommend that you seek the advice of an attorney. I would certainly point out to the attorney that a publicly recorded document that would establish a chain of title for your property was possibly omitted by the lien holder during the transfer or assignment to the national mortgage company. If that’s the case, your attorney may be able to temporarily hold them off which would give you more time to put the property up for a short sale. However, ultimately, a lack of payments on your part to service your mortgage would prompt a foreclosure sale in most cases. The fact that you have been attempting to modify the loan but are unable to get it completed was a good strategy initially, but unfortunately, it’s not working out. Perhaps try a different lender and pursue a short sale at the same time if you can buy some time?

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