from the Office of State Senator Craig Estes, District 30

For Immediate Release
December 10, 2008
Contact: Jody Withers
512-463-0130 or 512-297-0141

State Senator Craig Estes files legislation to crack down on foreclosure rescue scam artists

Austin - State Senator Craig Estes (R-Wichita Falls) joined Texas Attorney General Greg Abbott at a joint news conference today to announce the filing of the Foreclosure Rescue Fraud Prevention Act.

"I am proud to join General Abbott in this effort to stop foreclosure rescue fraud, and provide meaningful reforms to protect homeowners," said Estes. "This morning I filed Senate Bill 354, and I hope to get this bill on a fast-track to final passage to help save homeowners from this type of fraud."

Estes noted that a recent report by the American Mortgage Bankers Association indicates that at least one in ten Texas homeowners are at-risk for foreclosure.

"While most homeowners may never feel the threat of home foreclosure, it is an issue that can impact all of use when it strikes our neighbors, friends, and family," added Estes.

Foreclosure rescue fraud can take many forms, but most commonly it starts with a promise to homeowners to help save the home from a pending foreclosure, but results in either the homeowner losing their money with no help in preventing the foreclosure or worse - losing the home outright to the scam artist.

Senate Bill 354 would help protect homeowners from foreclosure prevention fraud through three key provisions. First, SB 354 would require all agreements to be in writing and provided in plain language clarifying rights and responsibilities. Second, SB 354 would require any sale of the property to an equity buyer promising to help save the home to equal at least 82 percent of the fair market value, and will provide a five-day cooling-off period allowing the homeowner to cancel the sale without penalty. Third, SB 354 would add violations of these provisions to the Deceptive Trade Practices Act.