Foreclosure: Texas Trying To Swim And Not Drown In The Foreclosure Pool

The Attorney General of Texas, Abbott is not happy about just standing and watching the threatening foreclosure clouds. He and few others like him want to do something. Foreclosures in Texas are as big as the state. In September the number touched 14,000 making Texas rank 9th in foreclosure ratings across the country.

As a preliminary step the Attorney General asked three of the largest lenders in the state for a meeting to thrash out the foreclosure problem and bail out the sinking victims. It was stressed that lenders, loan agents and public officials must all work at tandem with the sole object of helping those about to lose their houses and homes. The housing industry is one of the pillars of the economy of Texas and therefore it is to the interest of all concerned that it is put back on rails.

The mortgage companies could help by converting the floating loans to fixed ones. In the long run this will benefit lenders, loan agents and of course the house owners. Foreclosures are a hassle for lenders as well. Secondly the lenders were requested to be friendlier in their approach and not start off on the wrong foot by initiating intimidating tactics from the start. They should be ready to talk with and find out the difficulties of the defaulting borrowers.

By reviewing each particular case there would be a better chance for mortgage houses to collect their dues causing money to flow again. Thirdly the lenders were told to warn the consumers well ahead if there was going to be rise in the ARM’s. Fourthly they should do away with penalties and fees while tackling those consumers who cannot meet the bare essentials of the loan. To enforce all this an in-house resolution committee should be set up to see to the complaints pouring into the office of the Attorney General.

Abbott made the right noises and steps but the Texas Attorney General is a state official while federal laws control the mortgage lenders who have precipitated this foreclosure fiasco. Wherever there is a clash it is the federal rule that prevails. On the positive side Abbott’s measures exposed the fact that American borrowers are practically unprotected and without a change in the legal structure, the offending lenders can always hide behind the federal veil.

Related Posts

None Found