A multifaceted collaboration led to the successful settlement of a Federal Case against landlord/mortgage lender HMK.
The settlement enables vulnerable people to escape the predatory loan conditions that jeopardized the security of their homes.
In 2018, Legal Aid of NorthWest Texas and Texas Legal Services Center filed a federal lawsuit alleging the landlord/mortgage lender HMK violated a number of consumer protection laws, including the Truth in Lending Act. The lawsuit also claimed that HMK induced the plaintiffs, who are West Dallas residents, into signing illegal contracts containing predatory terms without their knowledge or the required disclosures from HMK.
All parties settled in June when HMK dropped the controversial restrictions in mortgages it granted in 2017 — a huge victory for the 150 low-income families involved. The original terms included a "due-on-demand" clause that allowed the lender to call the loan at any time, for any reason or no reason at all. These terms stayed in effect for the entire life of the loan, which could have left the families on the streets, even if they had paid off 95% of the mortgage.
We want to thank Thomas Melsheimer, Matthew Orwig, Alex Wolens, and Ahtoosa Amini Dale from Winston & Strawn's Dallas office for their assistance in this case. Ahtoosa and Alex developed the trial documents, such as jury charges, that allowed us to convince the defendants to meet all our clients' demands and ultimately avoid trial. Without Winston & Strawn's involvement, these families may have never realized the security of true homeownership, which is particularly critical during this ongoing health crisis.