Opinion ID: 758680
Heading Depth: 2
Heading Rank: 5

Heading: Rejection of the Mortgage Application and Subsequent Efforts to Obtain Documentation

Text: 18 The Sepulvados informed Texas Homestead, through Ms. Jamison, that the negative item related to the 1988 University Savings foreclosure. That information from the Sepulvados was of minimal effect. Following industry practice, Texas Homestead made its decision on the basis of the credit report, rather than anecdotal or explanatory information from the Sepulvados. The Sepulvados' application was formally denied on or about April 11, 1995. Texas Homestead issued a letter stating that the decision was made on the basis of negative credit entries, but Ms. Jamison told the Sepulvados that the rejection of their application was primarily due to the $12,333 collection item. 19 After the mortgage was declined, the Sepulvados continued in their efforts to obtain information about the objectionable entry, this time with the aid of their attorney. On April 12, the Sepulvados' attorney called Mr. Lewis and requested documentation confirming the Sepulvados' debt. On April 26, having received no response, the attorney renewed that request. Mr. Lewis responded by fax the same day, sending (1) a copy of the form letter sent to the Sepulvados by University Savings in July 1989, and (2) a copy of a form that may have been executed when the mortgage was opened, which shows the applicable interest rate and the schedule of payments due under the contract. Mr. Lewis did not send, although CSC had a complete file on the foreclosure in its possession, documentation explaining how the deficiency was calculated or documentation demonstrating that CSC was authorized to collect the debt. 20 On May 12, the attorney contacted Mr. Lewis again, explaining that thirty days had elapsed without an adequate response to the Sepulvados' request for documentation of the loan and CSC's right to collect. Around that time, CSC sent one additional document. The source of this document is not immediately clear. However, it reflects that the Sepulvados' outstanding balance at the time of foreclosure was $48,333.65, and that University Savings received a bid on the property of $45,000. Whatever else it may have proved, that documentation did nothing to establish the validity of a $12,333 deficiency on the Sepulvados' property.