Case Alleging Lending Violations Moves Closer to Being Heard by Jury

[Joint Press Release with Legal Aid of NorthWest Texas]

AUSTIN, TX, April, 28 2020 — A federal judge issued a ruling today ensuring that West Dallas homeowners will have a trial on whether a lender violated numerous consumer protection laws. In denying HMK Mortgage, LLC’s motion for summary judgment, Judge Brantley Starr removed the last barrier to a jury hearing the plaintiffs’ claims in a lawsuit filed nearly two years ago. The trial is set for late June.


“I am very happy with the court's decision today,” says Roberto Barahona, one of the homeowners who are plaintiffs. “The only thing that we have wanted since the beginning is an opportunity to tell our story so that the jury is able to decide on what is fair and right.”


In 2018, lawyers from Legal Aid of NorthWest Texas (LANWT) and Texas Legal Services Center (TLSC) filed a federal lawsuit alleging HMK violated a number of consumer protection laws, such as the Truth in Lending Act. The lawsuit claims 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. 


The lawsuit also alleges that HMK took advantage of the plaintiffs, whose first language is not English. Barahona, who primarily speaks and reads Spanish, was not presented with any documents in Spanish nor given the opportunity to have any English documents translated prior to signing them.


“It is important to hold private sellers accountable when they prepare contracts, especially in transactions with inexperienced, low-income buyers whose first language is not English,” says LANWT Attorney John Hasley. 


While private-seller loans make home ownership possible for low-income people, care needs to be taken when entering into these types of agreements.


"Beware of any lender like HMK that asks you to sign a mortgage loan without providing you with copies of the terms several days ahead of time," advises TLSC Attorney Wayne Krause Yang. "The law requires lenders to provide potential homeowners with a copy of important disclosures seven and three days before closing—allowing the buyer to take the documents to somebody who can explain the complex terms to them."


The court’s order and other pleadings, along with interviews, are available upon request. Please contact Shelby Jean at jeans@lanwt.org or 817-339-5384, or Meghan Lee at mlee@tlsc.org or 281-705-4973 for more information.

 

About Texas Legal Services Center

Texas Legal Services Center is a statewide nonprofit organization whose mission is to provide high-quality legal representation, advice, advocacy, and education at no cost to underserved people across the state. With more than a dozen practice areas, our work touches almost every aspect of civil law that impacts low-income Texans.

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Meghan Lee, Communications

communications@tlsc.org

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