McALLEN, Texas (Legal Newsline) - A South Texas developer has been charged by Texas Attorney General Greg Abbott with defrauding first-time home buyers by unlawfully selling homes saddled with undisclosed liens.
Abbott names the McAllen, Texas-based Grande Valley Homes LLC, doing business as Casa Linda Homes, in the lawsuit, announced Monday. Casa Linda Homes sells and finances residential real estate property, focusing on first-time home buyers, particularly those in the Rio Grande Valley, San Antonio and Houston areas with poor credit histories, he said.
The state's enforcement action alleges that Casa Linda Homes sold first-time buyers residential properties encumbered with a lien for delinquent property taxes, a lien of a third-party lender or a mechanic's lien for labor or materials used to improve the property.
Casa Linda Homes did not disclose these liens when buyers entered into their earnest money contracts, according to documents filed with the Cameron County District Court. When the undisclosed debts were not paid by Casa Linda Homes, creditors who were owed money began foreclosure proceedings or filed lawsuits against the home buyers.
Multiple Casa Linda Homes properties encumbered by undisclosed liens have been identified by Abbott's office. State investigators believe that additional encumbered properties have not yet been identified. The investigators also believe that Casa Linda Homes has changed its name and now operates as First Compass Homes.
Abbott's enforcement action is seeking an injunction to prevent Casa Linda Homes from selling houses lacking a clear title. The state is also seeking to prevent the company from selling houses not covered by title insurance. Civil penalties of $20,000 per violation of the Texas Deceptive Trade Practices Act are also sought.