Lawsuit filed against Texas man's home ownership scheme
Greg Abbott (R)
AUSTIN, Texas (Legal Newsline) - Texas Attorney General Greg Abbott has filed suit against a realty company that defrauded Hispanic home buyers.
The lawsuit, filed in Travis County against Hernandez Realty, Inc., real estate broker and owner Jose Fernando "Fern" Hernandez and his wife, Odessa S. Hernandez, claims that the defendants falsely promises customers home ownership when, in actuality, the homes were owned by the defendants.
Hernandez's real estate brokerage advertisements on Spanish-language television and radio promoted new home sales in Travis and Williamson counties.
Potential home buyers who responded to the advertisements were taken to look at new homes by Mr. Hernandez or his sales representatives. When clients found a home they wanted or a model home similar to what they wanted, Hernandez would explain the purchase process.
For Spanish-speaking clients who did not qualify for traditional financing, Hernandez would offer financing through a group of investors. The clients were told to make monthly payments to the investors for a year, at which point the house would be transferred to the home buyer.
An investigation into Hernandez's practices revealed that there were no investors. Hernandez himself would close on the houses with either himself or his wife acting as the official buyer. They would then take the title to what the home buyer thought was their property.
Hernandez was also found, through the course of an investigation, to have failed to provide documentation to his customers that verified their purchase of the home.
At least six properties were found to be leased to individuals who thought they owned the homes in which they resided but that were instead in Hernandez's name.
A couple in one instance gave Hernandez a down payment of $23,000 for a home, though that customer did not actually own the home and was instead given a lease/option arrangement for the house they thought they had purchased.
In another case revealed by the investigation, a Spanish-speaking customer who provided a $4,375 certified check as a down payment on a house never took the title to the property as the home was purchased in Odessa Hernandez's name.
The homeowner was provided a contract written in English nearly a year later. After the buyer took the contract to someone who could read English, the buyer learned that his purchase of the home was not memorialized in the document, but rather it gave the buyer a lease with an option to buy the home.
When the buyer confronted Hernandez about the contract, Hernandez explained that the $4,375 check was the payment for option and not a down payment. Hernandez told the buyer that financing would have to be obtained from someone else if he wanted to buy the house.
The customer later learned that an additional $7,500 was needed to transfer the title to his name. The buyer refused to pay more and moved from the house.
The attorney general's office is seeking restitution for home buyers affected by Hernandez's actions and a civil penalty of up to $20,000 for each violation of the Deceptive Trade Practices Act.