Texas AG wants to stop foreclosures in Texas

HOUSTON A lot depends on when you will get that final foreclosure notice.

The attorney general asked that foreclosures and sales of foreclosed homes be stopped voluntarily by more than two dozen lenders. The request was ignored on Tuesday.

It's where foreclosed homes find a new buyer. On the first Tuesday of the month, lenders auction off homes to the highest bidder on the Harris County Courthouse steps. Buyers there say they've seen cases of homes that were sold before homeowners could react to a foreclosure deadline.

"I was involved in short sale where the property owner had a valid contract for purchase and the bank never got back to them in time and proceeded with the foreclosure," said Jason Ezer, who's buying foreclosed homes.

In more than two dozen states, lenders have voluntarily stopped foreclosure sales after it was claimed mortgage company employees were not verifying foreclosure documents and simply signing off on foreclosures without even reading through the information to see if it was correct.

And now, state Attorney General Greg Abbott wants those same lenders to put a hold on foreclosures and even foreclosure sales in Texas while the companies review their procedures. Those bidding on foreclosed homes say they did not know about the request.

"We would not be here if that was the case, but we are here," said Daniel Cole, who is buying a foreclosed home. "This is how we make our living."

Real estate attorneys tell us the AG does not have the power to call off foreclosure sales in Texas without a court order. The attorney general on Tuesday said he is investigating allegations of wrongful foreclosures and the agency is prepared to go to court if necessary to make sure lenders are complying with state law.

Buyers at the sale say while there may be some local foreclosures that happen by mistake, most do not.

"People who typically get foreclosed are not paying the bills and banks," said Rick Henderson, who's buying a foreclosed home. "They are not the bad guy per se; they are just doing what they have to do to take care of their business."

The AG asked 30 companies to stop foreclosures and review their practices to make sure no one loses a home due to clerical errors. We contacted the largest lenders on the list and so far only wells Fargo has responded. They told us they have no plans to stop foreclosures in Texas.

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