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Tina, Lawyer
Category: Real Estate Law
Satisfied Customers: 33167
Experience:  17 years of legal experience including real estate law.
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I entered into a legal contract drawn up by an attorney ( Deed

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I entered into a legal contract drawn up by an attorney ( Deed of Trust, Promissory Note, and Purchase Agreement) as a lender on a home I have a lien on. The borrowers are requesting all my personal mortgage statements for the last couple of years. Their loan is with me as the lendor, and they did not assume the first lien on the home--which is my lien. Their attorney is threatening discovery of my documents. I have not defaulted on my requirements of the contract or on my personal liens on the property. Furthermore, their contract with me as their lendor (promissory note and deed of trust recorded in texas)does not mature until July 2014. They are two years into their contract with me. They are not pre-paying the remaining amount of their loan to me. They are demanding to see my personal documents on my personal loans. Do I have to provide this? Is their a law that protects me? Creditors protection laws? Laws protecting my personal finances? How can I respond lawfully and professionally, declining the view of my personal mortgage statements/documents? Do I need an attorney?

Hello and welcome.

My name is XXXXX XXXXX my goal is to provide you with excellent service today. I am sorry to hear of your difficult situation. Before I can give you an accurate answer to your question, please provide the following additional information:

What are their grounds for requesting your financial statements and other personal information? Is it in the context of a lawsuit?

I look forward to assisting you as soon as I have received this information. Thank you.

Customer: replied 4 years ago.

It is not a lawsuit. Can they sue me? On what grounds could they sue me?

The grounds they are claiming for requesting my financial documents is because of concern that by the time they are done paying their loan to me that I will owe more on the property then they will owe me. This would result in a title that is not clear. However, there is no way to prove or disprove this based on how I have my finances set up to pay for my liens. Additionally, my goals and plans for my loans is not their business. If I choose to save and earn interest on money and then pay one lump sum on any remaining amounts owed...that is my decision. they cannot assume, or force me to pay a different amount than is governed by my liens. If the title is not clear for them at the end of their agreement----then they can take legal action. But we are 14 months out. They cannot see my documents or tell me when I should pay additonal amounts, anymore than I can see my banks documents and tell them how to govern their money.

Hello again, Amy.

I wasn't suggesting that they have grounds to sue you, but needed to know whether there was a suit pending as that makes a difference in how I answer.

At this point, you have a contractual relationship with the buyer and if the contract itself does not require you to turn over documents, then you would typically have no legal obligation to do so, and I would respond with that statement.

You are correct, that if you provide clear title at the end of the loan, it is normally none of their business how much is owed on the property at this time. I would tactfully inform them of that.

I hope this helps clarify the situation for you. Please remember to rate my service once you have all the information you need. If you have any other questions, please ask me – I’ll be happy to respond. Thank you!


Customer: replied 4 years ago.

The attorney states in her letter that "if a suit for contract reformation is brought, you (meaning me) would be ordered to produce such financial documents in discovery."


What is a suit for contract reformation? What are the grounds of such a suit? Why and how can this be done? What do I need to do to protect myself?

Yes, in the context of a lawsuit you could be compelled to turn over such documents, but it sounds as though the attorney is playing hard ball, so you should retain an attorney to respond to their request.

Reformation of a contract is a recognized cause of action in Texas. When there has been a mistake of one party, accompanied by fraud or other inequitable conduct of the remaining party, the instrument may be made to conform to the agreement or transaction entered into, according to the intention of the parties. Coronado Transmission Co. v. O'Shea, 703 S.W.2d 731, 735 (Tex. App.-Corpus Christi 1985, writ ref'd n.r.e.) (citing Conn v. Hagan, 93 Tex. 334, 55 S.W. 323 (Tex. 1900)); Cambridge Cos., Inc. v. Williams, 602 S.W.2d 306, 308 (Tex. Civ. App.-Texarkana 1980), aff'd, 615 S.W.2d 172 (Tex. 1981). In order to be entitled to reformation of an agreement, a party must plead either mutual mistake or unilateral mistake accompanied by fraud or other inequitable conduct by the other party. Coronado, 703 S.W.2d at 735; Spellman v. Amer. Universal Ins. Co., 687 S.W.2d 27, 31 (Tex. App.-Corpus Christi 1984, writ ref'd n.r.e.).

Here is a link to a case which includes this excerpt:

The buyer's reasoning that you may owe more on the mortgage than they owe on the loan from you would not typically be enough to seek reformation of the contract. It sounds as though they may be trying to intimiate you into providing the documents when they have no right to them. It sounds like you do need an attorney to respond to their request.
Customer: replied 4 years ago.

How long does it typically take for such a process? For example if they choose to move forward with a suit for contract reformation?


Wouldn't this be both timely and expensive?


The attorney claims that a 3rd party finance company will not approve my buyers for the remaining amount owed to me that they want to finance, if I owe more than they owe me. Is this true? This doesn't make sense. Anytime I have ever sought out loan approval for all the homes I have bought, I am simply getting pre-approval on an amount. The remaining details of the home, amounts owed etc. are handled by a realtor or an attorney. Therefore, doesn't this sound like a lot of bologna? To me, as a reasonable person who has purchased and sold property, this is bologna. They would get pre-approval for an amount and work out the contract purchase details, amounts, property, liens, etc. after getting pre-approval from a third party financial institution. Is this correct?


It is impossible to say how long a suit might take--it can take a few months or even years, depending on vigorously contest it is. Yes, it is usually time-consuming and expensive if the parties do vigorously contest it--for both sides.

Yes, normally the pre-approval process would not be contingent on purchasing a specific property, so your finances would be irrelevant in that process. If they are seeking to obtain an actual loan, then they could be telling the truth about the requirements of the third-party lender.
Customer: replied 4 years ago.

If they are telling the truth about the requirements of the third party lender, then why wouldn't they just tell me this? Why would they take such extremes? Why wouldn't the 3rd party be in contact with me to have me prove the title will be clear?


How does obtaining my current statements prove to them, their attorney, a 3rd party financial institution, or anyone for that matter, prove that the title will or will not be clear in 14 months? How do these documents prove that I will or will not continue to pay my lien between now and the time their lien matures? How can anyone go into a suit for contract reformation, requesting these mortgage statements, and use them to prove something that has not occured? I have not defaulted on my liens or the contract. Nor have I done anything fraudelant or unlawful.


Hello again, Amy.

These are questions you should pose to them as I am not in a position to answer them. I've indicated that this appears to involve an intimidation tactic rather than asserting a reasonable legal claim and that may very well be the case, so they are posturing, which often does not make logical sense.
Customer: replied 4 years ago.

Would it be regretful for me to directly inform them that I do not have to provide this, and also pose these questions to them? Or would I put myself in a bad position by not having an attorney respond?


You mentioned possibly getting an attorney to respond. Do you think it is necessary if they are posturing?

Yes, I think to thwart their stated intention to file suit against you, you could save yourself a great deal of time and expense by retaining an attorney now for the limited purpose of responding to that letter. I would not respond on your own since they are not likely to take it very seriously I'm afraid.
Customer: replied 4 years ago.

Thank you!
How much time do you think I have to retain and respond prior to any additional action or responses from them?

Are you available to retain? If not, do you have a referral?

Hello again, Amy.

You are very welcome! The site prohibits me from taking referrals or providing ones through this site unfortunately, but the state and local bar associations should be able to provide you with attorney referrals.

If the letter does not provide for a deadline to respond, I would expect that a couple of weeks should be adequate.

Good luck to you with this and take care.
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