Draftcatfrelease 22807

By Eleanor Sims,2014-05-13 17:43
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Draftcatfrelease 22807

    Public Citizen’s Texas Office

    Award Winning Advocacy

    Public Citizen Texas office: Air Quality 2006 Conference “Outstanding Non-Profit Organization Award Tom “Smitty” Smith, State Director: Campaign for People’s “Thomas Paine Award U.S. EPA’s “Award of Excellence 2001 Austin Chronicle Best of Austin “Best People’s Lobbyist Public Citizen’s Solar Austin Campaign: Livable City “Vision Award Interstate Renewable Energy Council “Innovation Award 2004 Austin Chronicle Best of Austin “Best Grassroots Effort Texas Renewable Energy Industries Association “Special Recognition Award

    May 13, 2010

Dear Representative:

Texas consumers are at a disadvantage due to ineffective state action against home mortgage

    lenders whose deceptive practices have forced thousands of them into foreclosure. Texas

    Attorney General Greg Abbott has dropped the ball on enforcement, and the few efforts made

    last year to address subprime mortgage lending have been ineffectual and targeted consumers for

    the failure as much as corporations.

The need for action by Texas’ AG was highlighted last week by the Illinois and California

    Attorneys General filing separate civil suits against Countrywide Financial Corp, its chief

    executive and its president. Among the complaints are allegations that the home mortgage

    lender violated state law by using deceptive practices to convince people to apply for home loans

    they couldn’t afford.

Enforcement action is especially needed in Texas since a press release by the California AG

    stated that his investigation revealed Countrywide operated an office out of Plano, Texas that

    was devoted to making routine underwriting exceptions.

Texas law includes a Deceptive Practices Act, yet the statute has not been enforced against


In October and November of 2007, Attorney General Abbott officially recommended five

    measures to “address the growing housing crisis”. Attorney General Abbott recommended

    lenders review foreclosure cases before sending them to collection, create customer-complaint

    groups and improve communication with customers. He concluded, “Mortgage lenders, loan

    servicers, and public officials must work cooperatively on behalf of Texas homeowners who are

    affected by the looming house crisis,” in a November 2007 press release.

    Public Citizen ? Texas Office

    1002 West Avenue, Suite 300 ? Austin, TX 78701

    Phone: 512.477.1155 ? Fax: 512.797.8302

Upon AG Abbott’s announcement, the Dallas-based real estate news agency RealtyTimes

    decried his work-together-with-mortgage-lenders approach as hopeless. Illinois and California

    have proven that states, like Texas, that have statutes prohibiting deceptive practices can enforce

    the statutes to attempt to obtain a remedy for victims.

The Texas AG has rarely mentioned subprime lending since November of 2007. In a November

    2007 press release, Attorney General Abbott stated that Texas settled with subprime lender

    Ameriquest, returning $21 million to Texans. However, the release went on to proclaim, “a

    growing number of scam artists are duping lenders, mortgage companies and other businesses in

    the mortgage industry.” The release stated that people who attempt to obtain mortgage loans

    with false information commit mortgage fraud and that in order to deal with people who attempt

    to rip-off of mortgage lenders, the Texas AG is a member of the Texas Mortgage Fraud Task

    force. Texas should not officially blame victims for record-setting foreclosure levels.

Illinois’ suit against Countrywide seeks restitution to consumers for loans originating with

    deceptive practices as well as 90 days to review loans in foreclosure to determine whether there

    exist affordable alternatives. We hope you will urge our State’s Attorney to investigate Countrywide and take any necessary action. Please find the attached letter and materials Public

    Citizen sent to Attorney General Abbott regarding this matter.

On behalf of the Citizens of Texas,

Kimberly Jarrett Tom “Smitty” Smith

    Consumer Protection Researcher State Director

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