Texas A.G. begins legal action against alleged foreclosure scheme
DALLAS (Legal Newsline) - Texas Attorney General Greg Abbott has begun legal action against two unlicensed Dallas-based businesses to obtain restitution for victims of an alleged fraudulent mortgage rescue scam.
An agreed temporary injunction has been granted by Dallas County Judge James M. Stanton barring Markus Bailey and Tyrone Bailey from operating the unlicensed businesses Behind On Mortgage and Behind On Mortgages USA.
The defendants, who had never obtained a license as mortgage brokers from the Texas Department of Savings and Mortgage Lending, were found to have solicited distressed homeowners who were behind on their mortgage payments.
The agreement also requires the defendants to reimburse all customers from whom it collected unlawful fees or place those monies in a trust pending final judgment.
Abbott also contends that the defendants violated other provisions of the Texas Business and Commerce Code by failing to provide a required option to cancel the in-residence solicitation to homeowners. Additionally, the defendants are accused of violating the Texas Finance Code by failing to obtain a license.
Abbott's civil suit against the Baileys seeks, in addition to restitution, penalties of to $20,000 per violation of the Texas Deceptive Trade Practices Act as well as attorneys fees.
The defendants had previously been the subject of a temporary restraining order on Nov. 2 that halted their businesses' deceptive practices that allegedly harmed struggling homeowners.
Homeowners facing foreclosures were visited by the Baileys who pitched the homeowners a plan to obtain new loans, renewals, extensions of time to pay and modification of existing mortgage loans. The defendants, in return, required at least $1,000 in advance from the homeowners and demanded that no contact with or future payments be paid to their original mortgage servicers.
The homeowners' fees were retained by the defendants for services. No measurable foreclosure relief was provided and the defendants did not negotiate with mortgage servicers, leading many of the homeowners to ultimately lose their homes to foreclosure action, Abbott says.
Despite a late October cease and desist order the Department of Savings and Mortgage Lending, the defendants continued to operate unlawfully leading to the November temporary restraining order, Abbott says.