What is Foreclosure
Foreclosure is a scary process and in many cases people feel as if they are powerless to do anything about it. However, whether you want to keep your home or just want time to move out, there are options.
Texas is a non-judicial foreclosure state, which means that Texas does not require your mortgage company to sue you for the right to foreclosure. After acceleration of your note, your mortgage company is only required to give you 21 days notice of the foreclosure. There are several rights you have as a homeowner but because of the short notice period in Texas, you must act quickly.
The Foreclosure Trap
The foreclosure trap can happen in many different ways. One way is where a homeowner knows that financial troubles are around the corner. So, they try to do the responsible thing and contact their mortgage company. The homeowner tells the mortgage company, “Look, I am being laid off in 3 months and will need some time to find a new job, what can we do to help with the payments?” At this point, the responsible homeowner will be told that they CAN’T be helped until they fall behind at least 3 payments. This is counter intuitive; You have a person who is trying to address the problem and the mortgage company tells them they can’t be helped until they MISS AT LEAST 3 PAYMENTS
Can Your Mortgage Company Prove They Are the Valid Owner?
What most people are unaware of is the importance of the chain of title. You see, the only person who can foreclose on a property is the person who owns the promissory note and deed of trust (together they make up the mortgage). The promissory note is the loan documents – how much was borrowed and by whom, what is the interest rate, when are payments due, etc. The deed of trust is the security document – it is what gives your house as collateral to the bank when you borrow the money.
There have been a string of cases recently that have addressed the standing issue, which is the issue of title and who has it. Since there have been so many transfers, it is often difficult to find out who the owner of your mortgage is. This can benefit you because the foreclosing party can only be the party that is the rightful owner of the mortgage. The problem in Texas however, is our state has a non-judicial foreclosure process which occurs very quickly. In Texas, forelcosures occur on the first Tuesday of the month.
A mortgage forbearance is an agreement made between a mortgage lender and delinquent borrower in which the lender agrees not to exercise its legal right to foreclose on a mortgage and the borrower agrees to a mortgage plan that will, over a certain time period (6 months), bring the borrower current on his or her payments. A forbearance agreement is not a long-term solution for delinquent borrowers.
TRO(Temporary Restraining Order)
A temporary restraining order (“TRO”) is a state court order that prevents your mortgage company from exercising their foreclosure rights for a temporary period of time. Not everyone can get a TRO and it is not automatic. There must be a hearing in front of a judge prior to the foreclosure sale.
In order to succeed on a TRO you must be able to establish that the status quo is being preserved and that irreparable harm is imminent if the judge does not act.
Once you have the TRO you need to serve it on the mortgage company and their attorney. The TRO gives you a 14 day stay of foreclosure. You may be able to extend it one time for another 14 days. In order to extend it beyond that point you will need to request a temporary injunction hearing.