Several dozen Dove Springs residents are calling for a state agency to investigate a local real estate group they blame for deals under which neighbors lost their homes or have been threatened with foreclosure or eviction.
Attorneys with Texas RioGrande Legal Aid, which organized a community meeting for residents last week, say they believe 40 to 45 homes in the Dove Springs area are involved in the deals.
According to the complaint in a 2014 foreclosure lawsuit involving a Round Rock couple, the real estate group manages a portfolio of more than 300 houses and duplexes in Central Texas.
“The scale is remarkable,” said Austin civil rights attorney Brian McGiverin. “This company offered what seemed like a good deal at the time.”
Legal aid attorneys say a rotating cast of four firms, all owned and controlled by the same people, targeted Latino and Spanish-speaking buyers in the Southeast Austin neighborhood, many of whom didn’t qualify for traditional loans.
Molly Rogers, a staff attorney with Texas RioGrande Legal Aid and manager of its foreclosure prevention team, said the firms in question are HomeTex Enterprises LLC, F&S Capital LLC, Tenzing Investments LLC and the Lending Group LLC.
Residents say that Jeff Evans, listed as the property director for HomeTex Enterprises on his LinkedIn page, lured them into unfavorable housing contracts.
Alan Ceshker, attorney for Evans, said in an emailed statement: “We are reviewing the transactions to ensure they comply with all state and federal regulations and laws. We are also continuing to work with the home owners to address any concerns they may have.”
Legal aid attorneys allege the group took advantage of an informal sales process — buyers were often unrepresented by a real estate agent, title company or attorney — and signed people up for financing packages that included large balloon payments. According to Rogers, some buyers did not realize a payment for the remaining balance on the home would come due within a few years, while others believed the balloon payment would be far lower than it turned out to be. In some cases, according to attorneys, homeowners were promised a chance to refinance balloon payments but were then denied at the critical moment, resulting in default.
Residents also complained they were charged exorbitant late fees that snowballed into thousands of dollars for payments they insist were made on time.
Others said Evans demanded their first-time homeowner income tax credit, issued for purchases between 2008 and 2010 and totaling as much as $8,000, as part of their supposedly low down payments.
Attorneys plan to take the residents’ allegations to investigators with the Texas Department of Savings and Mortgage Lending; they further allege the group violated federal fair housing laws by targeting residents based on ethnicity.
The home deals have attracted the attention of several state and local officials including state Sens. Kirk Watson, D-Austin, and Judith Zaffirini, D-Laredo, and Austin City Council Member Delia Garza, who represents Dove Springs.
“It is heartbreaking and very troubling that it appears that people in vulnerable situations may have been so badly taken advantage of,” Watson said. “We are looking very carefully at what recourse these people have.”
Austin Interfaith, a coalition of churches, nonprofits, unions and schools, is also helping organize residents.
Several residents said they signed contracts without fully understanding them after receiving assurances from Evans.
One resident, who did not want to give his name because he is an undocumented immigrant, said he thought he was signing on to a 30-year mortgage and was surprised to learn after three years that he owed a payment for the remaining $93,000 on his home. “You have to sign many papers, but I don’t know English,” said the man.
Many residents said they contacted Evans after seeing signs around the neighborhood advertising home ownership for small down payments or rent-to-own opportunities.
Rogers said that in many cases, residents thought they were buying homes but were “actually being treated more like renters.” As a result, some residents said they paid hefty down payments and then put in thousands of dollars in repairs and improvements on homes they didn’t own.
Martha Leal, 56, said she paid more than $10,000 for a down payment as well as thousands for tile flooring and a new porch while she tried to improve her credit score as part of a rent-to-own contract.
She said the contract called for her to get her credit into good enough shape to purchase the house within five years. But when she missed a February deadline, she says Evans threatened to remove her option to buy; she said the deadline has since been moved to December.
“It’s not fair,” she said of the possibility she could lose her deposit and her home. “It’s very scary.” Leal’s home is one of three on her street owned by F&S Capital, according to Travis County property records.
Salvador Villegas, 48, a janitor for a charter school, said he and several members of his family bought homes from Evans, but that he, his sister and his mother were forced from their homes after disputes over payments. “He was trying to target a lot of minorities, people working hard for their money, who work two or three jobs,” he said. “He’s trying to make a quick buck.”