The Texas Department of Savings and Mortgage Lending issued the orders to HomeTex Enterprises and Jeff Evans, who is listed as its property director, and who residents say lured them into unfavorable housing contracts. The department also ordered another mortgage firm flagged by residents, the Lending Group LLC, to turn over records.
About 40 to 45 homes in the Dove Springs area are believed to be involved in the deals. According to the complaint in a 2014 foreclosure lawsuit involving a Round Rock couple, the real estate group manages a portfolio of more than 300 houses and duplexes in Central Texas.
An attorney for Evans could not be immediately reached for comment.
Austin civil rights attorney Brian McGiverin said he and other lawyers representing the residents are pleased to see progress in the inquiry. The dredging up of documents could help uncover wrongdoing, he said.
“I think the department has gathered as much as it could from speaking to residents,” he said. “The subpoena (against the Lending Group) will get at their books and record keeping, and it is the next full step to flesh out a full picture about how they have been operating.”
Lawyers with Texas RioGrande Legal Aid have said a rotating cast of four firms, all owned and controlled by the same people, targeted Latino and Spanish-speaking buyers in the Southeast Austin neighborhood, many of whom didn’t qualify for traditional loans.
Legal aid attorneys allege the group took advantage of an informal sales process — buyers were often unrepresented by a real estate agent, title company or attorney — and signed people up for financing packages that included large balloon payments. Some buyers told lawyers they did not realize a payment for the remaining balance on the home would come due within a few years, while others believed the balloon payment would be far lower than it turned out to be. In some cases, according to attorneys, homeowners were promised a chance to refinance balloon payments but were then denied at the critical moment, resulting in default.
Residents began organizing against the firms in October, and the home deals have attracted the attention of several state and local officials including state Sens. Kirk Watson, D-Austin, and Judith Zaffirini, D-Laredo, and Austin City Council Member Delia Garza, who represents Dove Springs.
Some 20 Dove Springs residents gathered Monday evening to share stories of being allegedly scammed out of their homes by an unsavory real estate practitioner, calling on state regulatory agencies to take action.
The homeowners – most of them only Spanish-speaking – accuse Jeff Evans of taking advantage of their lack of English language comprehension, leading them to agree to financially prohibitive mortgage terms without realizing what they were signing up for. One resident said his balloon mortgage payments increased exponentially after the fifth year – something not adequately explained to him, he claims – causing him to lose his home. Another said Evans insisted he buy expensive insurance or risk losing his home. Others spoke of being stuck with thousands of dollars in late fees.
“These people are being cheated,” said Brian McGiverin, an attorney with the Dietz, Lawrence, and McGiverin Law Center. Evans “has been flying under the radar, and we’re putting him on the radar.” To that end, those gathered at the Southeast Branch Library filled out forms detailing their plight to be forwarded to state regulators. Representatives of Senators Judith Zaffirini and Kirk Watson were on hand, along with lawyers from Texas RioGrande Legal Aid and UT-Law students. “People like Jeff Evans are supposed to follow a set of rules when they want to do business,” McGiverin said. “You all have been victims of broken laws, and the government wants to do something to protect you. The only way to do that is for them to hear from as many of you as possible.”
Rafael Gomez, a homeowner for barely a year, described being made to pay $650 for paperwork related to his title he still hasn’t seen. Moreover, property insurance he was told was required rose from $1,200 monthly to $2,361 – on top of the $1,231 mortgage payment for his family’s three-bedroom home.
Salvador Villegas said he, his sister, and elderly mother were all evicted following an inability to cover late fees. “They went to $1,500 in a span of two months,” he said of his sister’s experience.
At press time, Evans’ attorney, Jason P. Gorman, had not returned a call seeking comment.
DLM attorney Brian McGiverin has been working with legal aid attorneys and Austin Interfaith to uncover mistreatment of homeowners in Austin’s Dove Springs neighborhood.
Austin Homeowners Say Mortgage Lenders Misled Them
Dozens of Austinites say they’ve paid thousands of dollars thinking that money was going toward buying their homes. Then they got a notice that they are in foreclosure. As our Jeff Stensland explains, attorneys are looking at why this is happening in a specific part of town.
For many, the American Dream is a good education, a career and the chance to own a home.
A woman we will call Maria, thought she was on her way to realizing her American Dream, that is until the mail came.
“One day, I just received a foreclosure notice. It said he wants something like $15,000 to $20,000 cash to continue the contract,” her son translated from her native Spanish.
Maria told TWC News that she signed a contract in 2008 to buy a home in a Southeast Austin neighborhood.
“He was asking $2,500 for a down payment with a monthly payment of $1065.52 a month. That includes the rent, the insurance and taxes and everything. They had a loan life for 30 years,” she said.
Tax records show Jason Lippman owns the house that Maria lives in. He lives in West Austin.
TWC News reached out to him, his business partner and his attorney but haven’t heard back.
“They are part of a regulated industry, but they are ignoring those regulations,” said Attorney Brian McGiverin.
McGiverin says the lenders are ignoring those regulations and targeting the Dove Springs neighborhood.
On Monday night, those attorneys met with the families.
Time after time, families say they were on the way to home ownership only to learn they were only paying interest on a high-interest loan.
“There are laws in place that are designed to protect homebuyers from getting loans that are going to be predatory,” said McGiverin.
Now, Maria hopes the state will take action to keep her in the house she’s already paid $80,000 to call home.
Attorneys say they’ve been in talks with the Texas Department of Savings and Mortgage Lending.
They plan to hand over dozens of complaints to the agency, so the high-interest mortgages can be investigated.
Several dozen Dove Springs residents gathered Monday night to call for a state agency to investigate a local real estate group they blame for deals under which neighbors lost their homes, or have been threatened with foreclosure or eviction.
On Monday evening, Texas RioGrande Legal Aid and Austin Interfaith, as well as a representatives from the offices of state senators Kirk Watson and Judith Zaffirini and Austin City Council Member Delia Garza, who represents Dove Springs, met residents in the neighborhood seeking more information.
Attorneys are seeking to bring the residents’ allegations to investigators with the Texas Department of Savings and Mortgage Lending.
“The scale is remarkable,” said Austin civil rights attorney Brian McGiverin. “This company offered what seemed like a good deal at the time.”
Legal aid attorneys said they are investigating whether a rotating cast of four firms, all owned and controlled by the same people, targeted Latino and Spanish-speaking buyers in the Southeast Austin neighborhood, many of whom didn’t qualify for traditional loans, reaching them through fliers posted around the neighborhood.
Molly Rogers, a staff attorney with Texas Rio Grande Legal Aid and manager of its foreclosure prevention team, said the firms in question are HomeTex Enterprises LLC, F&S Capital LLC, Tenzing Investments LLC and The Lending Group LLC.
Residents on Monday night said that Jeff Evans, listed as the property director for HomeTex Enterprises on his LinkedIn page, lured them into unfavorable housing contracts.
Evans could not be reached late Monday. An attorney who has represented associates of HomeTex did not respond to a request for comment Monday afternoon.
Legal aid attorneys allege the group took advantage of an informal sales process — buyers were often unrepresented by a real estate agent, title company or attorney — and signed people up for financing packages that included large balloon payments. According to Rogers, some buyers did not realize a payment for the remaining balance on the home would come due within five or so years, while others believed the balloon payment would be far lower than it turned out to be. In some cases, according to attorneys, homeowners were promised a chance to refinance balloon payments but were then denied at the critical moment, resulting in default.
Several residents at the meeting said they signed contracts without fully understanding them after receiving assurances from Evans.
Rogers said that was common among the Dove Springs residents, many of whom she said thought were buying homes, but were “actually being treated more like renters.”
Several of the residents gathered Monday night said they contacted Evans after seeing signs around the neighborhood advertising home ownership for small down payments or rent-to-own opportunities.
Rogers said that in many cases, residents paid hefty down payments and then put in thousands of dollars in repairs and improvements on homes they were then forced to leave.
Martha Leal, 56, said she paid more than $10,000 for a down payment as well as thousands for tile flooring and a new porch while she tried to improve her credit score as part of a rent-to-own contract.
She said the contract called for her to get her credit into good enough shape to purchase the house within five years. But when she missed a February deadline, she says Evans threatened to remove her option to buy; she said the deadline has since been moved to December.
“It’s not fair,” she said. “It’s very scary.”
Attorneys are seeking to file a formal complaint with the Texas Department of Savings and Mortgage and are hoping that the City of Austin will step in to help residents, though it was unclear Monday night how that would happen.