Lubbock area could be affected by foreclosure halt - KCBD NewsChannel 11 Lubbock

Lubbock area could be affected by foreclosure halt

By Tiffany Pelt - email

LUBBOCK, TX (KCBD) – Texas Attorney General Greg Abbott is stopping foreclosures by 30 mortgage companies in Texas because of the possibility of  paperwork not being reviewed  correctly.  Some are concerned this foreclosure freeze could affect Lubbock and the real estate market.

The letter sent by the Attorney General stated all 30 companies must identify any employees involved in "robo-signing" by October 15th. That's where individuals within the company sign thousands of foreclosure documents without reviewing the information.

"They're sworn affidavits so if they haven't read them and submitted them as factual and they're not factual then it could be potential fraud," said Michael Kleinstub, with Lubbock's Safe at Home Property Solutions.

There are no locally owned companies on the list. Prime West Mortgages president Ron Rogers said that's partly because the smaller companies are not overwhelmed with foreclosure documents – what causes robo-signing in the first place.

Rogers also believes the foreclosure freeze won't have that big of an impact on Lubbock.  "I believe that because home sales for example have been fairly strong, especially compared to the rest of the state rest of the nation. Home values have held up," said Rogers. "In Lubbock we're somewhat insulated and have been for most of the economic crisis."

In Lubbock the foreclosure rate is low, with only a little more than 200 homes being foreclosed last month. The problem is some of those are serviced by bigger companies like WellsFargo and Bank of America that are on the list. "I can promise you a bunch of them were probably robo-signed," said Kleinstub.

Kleinstub, who works closely with homes that are about to be foreclosed said although the direct impact to Lubbock might not be that great, the real estate market over all will definitely feel the sting. "It affects the realtor who's trying to sell that property now that has been foreclosed on. It affects the title companies not being able to issue insurance on it and it affects the person who wants to buy the house because they can't get insurance," he said.

Read a copy of the letter (click here)

See the complete list of companies (click here)

Copyright 2010 KCBD. All rights reserved.

 

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