Dallas Foreclosure Defense Attorneys
Helping Texas Clients Protect and Save Their Homes
The thought of losing your home can be terrifying, especially if you have built a life in your residence and have nowhere else to immediately go. No one sets out to become delinquent on payments, but unanticipated financial crises can put you behind on your mortgage and at risk of foreclosure.
How to Avoid Foreclosure
Having difficulty paying your mortgage? Consider your options before it is too late and the foreclosure process begins. For experienced counsel, reach out to a foreclosure lawyer in Dallas, otherwise, below are a few things you can do to avoid foreclosure:
- Negotiate a payment plan with the lender (like a loan modification forbearance, etc.)
- Reinstate your mortgage.
- File for Chapter 7 or Chapter 13 bankruptcy.
- Give up your home in a short sale or deed in lieu of foreclosure.
The good news is foreclosure takes a fair amount of time to accelerate if you take the proper legal steps, giving you time to strategize, reorganize finances, and work to keep your home. Even if foreclosure has already started or even accelerated, there are tools that can freeze the process. Our Dallas foreclosure defense attorneys at The Law Office of Truman E. Coe, P.C. can efficiently work to help you keep your home now and in the future. We understand the practical and emotional stakes involved in any foreclosure case and strive to give each client the compassion and timely attention they deserve.
If you believe your home is about to be foreclosed or have already been served a foreclosure notice, do not wait to call (817) 775-5696 or contact us online. Time is of the essence in these cases, so the sooner you call, the better!
What Causes a Foreclosure in Texas?
Whenever you take out a loan or mortgage to purchase a piece of property in Texas, you will almost certainly sign a promissory note that indicates your commitment to repay and the terms for failing to do so. You will also sign a deed of trust, which entitles you to the property and serves as security for the loan. How your bank or lending institution typically handles foreclosure is likely laid out in the promissory note.
You are almost never at risk of foreclosure until you start falling behind on your agreed mortgage payment schedule. If you are only late in making a payment once or even twice but then catch up, you are likely not at risk of foreclosure because banks tend to avoid foreclosure wherever possible. You may, however, be charged a late fee for each month your payment is late. This is legal in the state of Texas, and the specifics of your terms should be outlined in your promissory note.
Foreclosure is an expensive, time-consuming process for banks that often leaves them paying for a property they do not want. They would much rather you collect your mortgage payments and do nothing. This general fact can give you leverage as you deal with unexpected problems and seek to end financial conflicts without resorting to foreclosure.
What Is Preforeclosure?
Once you have missed two consecutive payments and are at risk of missing more, you will generally enter what is sometimes informally called a “preforeclosure” period. During this phase, the bank or lending institution will likely try and identify an alternative solution to foreclosure. They will be seeking to mitigate any potential financial losses, so you may have room to propose loan modifications, loan forbearance, or some form of new payment plan. There is no need to panic -- it is not the same as foreclosure and only means you are at risk of the process starting.
Federal law requires the servicer of your mortgage to reach out to you once you enter preforeclosure. This will likely come in the form of letters to your residence or phone calls. While it can be tempting to ignore them – after all, missing payments it embarrassing, and you might be expecting something akin to creditor harassment – you should try and cooperate when possible.
If you have not already done so, this is perfect time to hire qualified legal representation. While banks will sometimes be happy to work with you on foreclosure alternatives, you should ensure you are getting a reasonably good deal in the negotiations.
When Does Foreclosure Start?
If you have missed more than two monthly mortgage payments and are poised to miss a third, your bank or lending institution will probably prepare a breach letter. A breach letter signals when the foreclosure process will formally start (if no action is taken) and is generally sent 90 days after the initial delinquency.
Your letter should contain the extent of the default in your mortgage agreement and the actions required to resolve the problem. Typically, this means catching up on your payments and any associated late fees. There will also be a deadline by which the default must be resolved; otherwise, foreclosure will be pursued.
Federal law dictates that foreclosures cannot usually occur until the borrower is more than 120 days delinquent on their mortgage payments. As a result, banks will set the deadline in their breach letter at least 30 days out if delivering on the 90-day mark.
How Does the Foreclosure Process Work in Texas?
In the state of Texas, a majority of real estate agreements include a power of sale clause. This authorizes the servicer to foreclose without going to court. If your bank or lending institution has not already sent you a breach letter, they are required by law to send you a notice of default and intent to accelerate foreclosure to repay delinquencies, with a minimum of 20 days to cure the default. This should be sent by certified mail, and in many cases, the breach letter fulfills this requirement.
Once this deadline passes (and assuming the default has not been resolved), the servicer will prepare the foreclosed property for auction and sale. They are required to send a second letter to the borrower via certified mail confirming the date, location, and time of the sale. An announcement of the sale will also be filed with the county’s clerk and posted on the door of the county’s courthouse.
The bank or financial institution may not hold the sale until a minimum of 21 days have passed following the sending of the second letter. Be aware this three week-period is likely your last opportunity to explore foreclosure relief, and you will have very limited options once the auction occurs.
The foreclosure sale must take place no earlier than the scheduled time, though it can occur within three hours after the posted time. In Texas, most sales will occur at the property’s county courthouse on the first Tuesday of each month. The sale is conducted through an auction, in which the property is sold to the highest bidder. Foreclosure auctions are often sparsely attended, forcing the bank or lending institution to effectively purchase the property on credit.
It is vital to take decisive action before the foreclosure sale occurs. Not only will you likely have no legal tools of relief after the property has changed hands, you may also be subject to a deficiency judgment lawsuit. If the amount you still owe on your mortgage exceeds the sale price at the auction, your bank can sue you for the difference. Worse still, Texas does not offer a redemption period, meaning you cannot redeem your home by catching up on your mortgage once a sale is completed.
Common Defenses Against Foreclosure
If you are being threatened with foreclosure, reach out to our law firm today. A skilled lawyer in Dallas can guide you through the process and help you identify what your best options are.
Below are some common defenses against foreclosure:
- The foreclosing party did not follow the foreclosure procedures correctly.
- You are making payments on a loan modification plan, and the foreclosure should not have started.
- You are a servicemember on active duty.
One Way to Avoid Foreclosure: File for Bankruptcy
It can be easy to feel helpless as a foreclosure process proceeds, but there are still powerful legal tools our Dallas foreclosure defense lawyers can help you exercise. The most important thing you can do is seek legal representation as soon as possible when you suspect foreclosure or even mortgage delinquency may be in your future. The sooner you address a personal crisis, the better. In foreclosure cases especially, you have more options the earlier you act.
Filing for bankruptcy can put an immediate stop to foreclosure proceedings and even help you save your home long-term. While the two processes may not seem closely related, bankruptcy seeks to permit you to liquidate or restructure your debt and facilitate a more sustainable financial future. If you are delinquent on your mortgage, chances are you are suffering from other financial problems. Bankruptcy might be able to not only freeze the foreclosure process: It can also help you discharge other debts, giving you the ability to catch up on your mortgage.
Bankruptcy and the Automatic Stay
Filing for either Chapter 7 bankruptcy or Chapter 13 bankruptcy triggers a court-ordered automatic stay, which legally bars any collection actions from proceeding against you. “Collection actions” encompasses vehicle repossessions, creditor harassment, and foreclosure. So long as a foreclosure sale has not yet occurred, you can file for bankruptcy and stop the process from proceeding. Your lender will not be permitted to continue with a foreclosure or even hound you for repayment until your bankruptcy concludes.
How Chapter 7 Fights Foreclosure
Chapter 7 bankruptcy is sometimes known as “liquidation” bankruptcy, as your nonexempt property will be sold to partially repay creditors. This may sound worrying – could you lose your house in liquidation? – but Texas has some of the most generous state exemption schedules in the country. This includes an unlimited homestead exemption for many Texans, meaning you can completely safeguard your home from the liquidation process.
How Chapter 13 Can Stop Foreclosure
Chapter 13 bankruptcy avoids liquidation and instead aims to restructure your debt. A court will mandate a 3- to 5-year repayment plan based on your ability to repay, determined by calculating your monthly disposable income. Chapter 13 bankruptcies can be extremely useful for those in danger of losing their home, as your lender will be unable to move on foreclosure, so long as you make your court-ordered payments.
Once you successfully complete either Chapter 7 or Chapter 13 bankruptcy, you will in most circumstances be authorized to discharge unsecured debts. This includes any debt that is not secured by collateral, so credit card bills, medical bills, and personal loans are typically fair game.
It is important to understand you will not be able to discharge delinquencies on your mortgage, as that is considered a secured debt. However, the time granted to you as the bankruptcy process carries out – in addition to the other debts you will be permitted to discharge – can give you the flexibility to restructure your finances and catch up on your mortgage, ending the threat of foreclosure.
Let Us Help You Avoid Foreclosure
Even if you are delinquent on your mortgage and have no means to repay it, a foreclosure does not have to be a foregone conclusion. If you act quickly, our Dallas foreclosure defense attorneys can work to prevent the loss of your home. We can help you explore various foreclosure relief options, including filing for bankruptcy. Our team at The Law Office of Truman E. Coe, P.C. has over 40 years of combined legal experience helping Texans finding fresh financial starts, avoiding foreclosures in the process. We understand the urgency of foreclosure scenarios, which is why we offer same-day, after-hours, and weekend appointments.