The Texas Attorney General is taking a close look at questionable mortgage practices by putting a freeze on hundreds of foreclosures.
The Attorney General sent out a letter, demanding that affected companies immediately suspend all foreclosures, all sales of foreclosed properties, and all evictions.
"We are asking loan servicing companies across the state of Texas to put a stop to any further foreclosure proceedings at least until October 15th," says Attorney General Abbott, "This involves 30 lean servicing companies across the state of Texas."
Companies with Texoma ties including JP Morgan Chase, Wells Fargo, American General Finance, and Bank of America.
At issue is the questionable practice of "robosigning", when employees automatically sign documents without reading them.
The Attorney General also says "robosigners" would sign thousands of documents a month, falsely claim personal knowledge of facts, and improperly notarize documents.
Wichita Falls Attorney Monte J. White told Newschannel 6 that "the Attorney General is making sure that the mortgage is correct--to the penny correct-- and the freeze will ensure that homeowners won't get a false statement in the mail."
But White also warns homeowners may end up getting burned by the freeze as time goes by saying that "those who are behind in their payments and the foreclosure proceeding is stopped for a while, may end up getting further behind, and could be hurt in the long run."
Yet Tommy McCulloch, the President of Fidelity Bank which is a company that was not named in the suit, explains that the freeze targets the bigger corporations.
He says the Attorney Generals decision will have "minimal impact in Wichita Falls because the freeze won't affect some of the smaller local banks who make loans and then sell those loans in the secondary market."
The 30 companies have until October 15th to respond to the Attorney General's demands, which include identifying all agents and all foreclosures affected by "robosigning."