Portions of this material appeared in a publication of the State Bar of Texas.
written for ”The Forest Image,” March 2011
Purchasing a home can be one of the biggest decisions and most significant investments a person or family makes. No matter how carefully planned and meticulously budgeted, the purchase of a new home always involves some level of risk. Family situations can change, job situations can change, health situations can change; all of which can shake a families financial stability to its core. In the current economic climate, more and more families are facing financial crises that they never dreamed they would face. Among the most critical of these crises is foreclosure of the family home. If you are facing foreclosure, having access to the most basic laws governing foreclosure and knowing your options can mean the difference between losing everything you’ve worked for and protecting your family home.
In Texas, the type of foreclosure process that is used by the lender depends on the type of debt that is owed. As a practical matter, once a homeowner has missed a mortgage payment and is in default under the promissory note, the lender may attempt several unofficial steps to resolve the problem, such as collection calls, letters, acceptance of partial payments, or negotiating a temporary payment plan. Assuming that these efforts have not resolved the problem and the lender is ready to proceed with a nonjudicial foreclosure, the following actions must be performed by the lender:
(1) Notice of Default and Intent to Accelerate (first notice);
(2) Notice of Sale and Acceleration of Debt (second notice);
(3) Foreclosure Sale;
(4) Distribution of Proceeds;
(6) Deficiency Action; and
(7) No Right of Redemption for Nonjudicial Foreclosure.
A foreclosure can be cancelled, delayed or avoided at anytime before the sale at the courthouse. The best time to reach a resolution is during the 20-day period after receipt of the first notice. During this time, you are required to pay only the past due amounts and not the entire loan amount. If you believe that you will be able to gather the necessary funds to bring the loan current, it would be wise to contact the lender and keep them informed of your progress as they may be willing to extend the 20-day period if they believe that the matter can be resolved without further action. If you cannot pay the entire amount that is due, your lender may be willing to agree to a payment plan, loan modification or other arrangement to bring the loan current and ensure that you will be able to make future payments.
In certain situations, it is possible that your lender must consider modification if your home loan qualifies under new laws passed to provide relief from rising foreclosures, such as the Making Home Affordable plan and the Home Affordable Modification Program.
The filing of a bankruptcy petition will immediately stop a foreclosure sale from occurring as of the filing of the petition. However, you will be required to continue making some type of regular payments and make some payments toward the delinquency as part of your bankruptcy plan. Filing for bankruptcy is a major event and should not be taken lightly or performed without careful consideration.
Weathering difficult economic times is hard enough without the added stress of facing the loss of your family home. If you would like solid, experienced counsel from professionals who care, contact the Hubbard Law Firm. With more than 30 years experience, they can provide you with the best options to protect yourself and your family. Call the Hubbard Law firm today at 281-358-7035.