There's Still Cowboys Left in Texas, Though Not
The housing market collapse back in 2008 wasn’t exactly the prettiest (or possibly legal) thing that Americans have experienced as property owners, consumers, and citizens participating in the world’s wealthiest economy (at the time, that is). But just because the big banks were dealing under the table doesn’t give just anyone from real estate attorneys in San Antonio, Texas or the courts processing their lawsuits the right to do as they like within tenuous applications of the law. Or does it? One company in San Antonio is certainly acting as though it does: DDTND Sierra Investments LLC, now known as Bitterroot Holdings LLC, are playing fast and loose with property statutes in Texas to try to get what they want.
Invoking what’s commonly known as “squatter’s rights” in order to claim ownership of a house on the far north side of San Antonio, Bitterroot is contending in a lawsuit filed in Bexar County District Court that it has “controlled and maintained the house” in question for three years, signifying that it should be declared owner by law. Given how the house was acquired, most real estate attorneys in San Antonio would disagree. S. Lee Stevenson, a lawyer in the city, would likely agree that this lawsuit aligns with the nearly a 100 others filed by Bitterroot’s attorneys and dubbed by Senior U.S. District Judge harry Lee Hudspeth to be frivolous and without merit, and filed “in bad faith for the purpose of harassment and delay.” Judge Hudspeth sanctioned DTND $20,000 in both cases. DTND plans to appeal.
But the $40,000 worth of sanctions imposed on DTND (now Bitterroot) seems like small bucks when you consider their whole scheme: they’ve been buying up properties across San Antonio—almost 250 of them—from homeowners associations “that had foreclosed on homeowners for unpaid dues…When the mortgage lenders, who held a superior lien on the property, moved to foreclose, DTND would sue them to stop the actions.” Any of the principled real estate attorneys in San Antonio like Stevenson can see this scheme for what it is: leveraging shaky legal arguments, at best, to tie up our court system in a move to shirk responsibility for nearly ill-gained assets.
Now, Bitterroot is grasping at straws in an effort to continue their loose cannon legal scheme: squatter’s rights. DTND bought the house in question back in 2011 and is claiming that Fannie Mae’s attempts to evict the tenant are void, legally, since it acquired the property by “adverse possession,” supposedly entitling it to ownership. Not so fast, though, some real estate attorneys in San Antonio warn: “Bitterroot is misinterpreting the law.” The lawsuit is most likely “simply another legal maneuver so Bitterroot can continue to collect rent,” but maybe not for long, as the tenant of the house in question is trying to get out, not wanting to be caught in the middle.
The most ironic part of the whole thing? According to the statute invoked, “Bitterroot can only make a claim under the three-year statute if its ‘chain of title’ begins with one of the following types of grants: from the King of Spain; from the Republic of Texas under an 1839 law; or from the state to a Civil War soldier.” Not exactly through a foreclosure under the nose of Fannie Mae.