Stop Foreclosures
About Foreclosures
This is a place to look at general information regarding the non-judicial foreclosure process for non-payment of a mortgage in Texas. The intentions are to help you think about what might be an avenue to pursue for stopping a possible foreclosure and to provide contact information if you want to know what my company would pay for your house. It is not intended to give advice of any kind, including but not limited to legal, financial, or real estate matters. We make no claim regarding the completeness or accuracy of the information that you review and your entry into this site implies this understanding. Further, all visitors fully indemnify the site owner against any and all future claims regarding information reviewed on this site. The website owner has a Texas real estate license.
Working with Your Mortgage Company to Stop Your Foreclosure
Sooner is better than later. The longer the time frame in which nothing has been attempted or discussed with the note holder, the less likely they are to be cooperative. Call and get the name of the person handling your loan, get a direct number if you can. It can be daunting to communicate with these sometimes large organizations that do not have to return a call if they don’t want to.
Follow every phone call with a written letter or fax that restates your conversation that day, who said what and your understanding of what was said. They have a habit of not remembering and of seemingly not being interested.
Here is what you need when you talk to them:
You want a faxed or mail statement showing the net pay off of your loan
on a date prior to the foreclosure sale date and at the same time
you want to know what the reinstatement costs are.
The reinstatement costs are all of the unpaid mortgage payments now due and owing, along with penalties, attorneys fees and any lender supplied insurance or tax payments.
These 2 figures will help you decide what steps to take next.
All mortgages have the right to reinstate by paying the arrearages. There are many ways to find the money to make those back payments. For example:
1. Sell some of your assets: an old car, collectibles, etc…
2. Borrow against your IRA, or 401K: you can take the money out and use it for 60 days without a penalty
3. Borrow from your family
If none of these sources or other sources of cash are available to you, talk to your lender about the following programs:
1. FHA loan program called “partial claim”: FHA provides interest free loans to bring the mortgage current, it must be repaid at the same time and results in an increased monthly payment, but it also stops the foreclosure process.
2. Forbearance program: restructures the loan, they may move the past due payments and late fees to the end of the note and give you a 30-60 day grace period to get back on track.
3. Loan Modification: the note holder reduces the interest rate or changes the length of the term in the note there by lowering the payments
4. Work-out plan or repayment plan: as it is called by some lenders is where part of the past due payments are added to the loan or to a new payment established with an up front lump sum that is less than the total arrears.
5. Deed in Lieu of Foreclosure: last resort after talking to banks, lawyers, and real estate agents. It only saves the bank money on foreclosing, it has the same strong negative effect on your credit history, but it protects you in the event of a loss suffered by the bank in the reselling of the property.
6. VA compromise program or FHA “pre-foreclosure sale program” or a conventional loan program called “short sale”: All require you to be working with a licensed realtor. You get 90 days to sell the property at FMV or under market as in a “short sale” the lender has final authorization on terms and the seller leaves the table with out any proceeds if a short sale is worked out, no second liens are paid. You must request the package from the lenders ” loss mitigation dept. Package includes information you must provide like closing costs, Fair market value statement from a real estate broker, hard ship letter, financial statement, signed purchase agreement.
What Attorneys Can Do to Stop Your Foreclosure
All lenders must follow the law concerning foreclosure process and notification. Ask your attorney questions, they can help you if the laws have not been followed.
Contact Your Attorney for Legal Advice
You may consider a temporary restraining order barring the lender from proceeding with foreclosure. It costs money, but many times buys you enough time to complete a pending sale. These kinds of orders are done when the note holder has not notified you properly, or will not provide the information you need to bring the note current and for other reasons.
Contact Your Attorney for Legal Advice
You may consider filing bankruptcy. This too will cost money, however in cases where there is significant equity in the property, it may be a good alternative for you. Rules and conditions apply, so don’t wait until the day before to see if you can do this or should do this.
Contact Your Attorney for Legal Advice
How a Realtor Can Help You Stop Your Foreclosure
If you cannot restructure your debt on your home to a satisfactory level and selling is your only other option, work with a licensed realtor to get that done. You must have time and it is generally more positive and productive earlier in the process. Ask your realtor if they have experience in working with pre-foreclosure clients. Talk with a realtor on what you can expect as a realistic selling price for your home given the condition, market and available time. Some of the pre-foreclosure programs require you to work with a licensed realtor.
What Investors Can Do to Stop Your Foreclosure
Investors are here to make money and there are many properties for them to choose from. The best outcome with using an investor that has a good reputation, is that the foreclosure is stopped and you, the homeowner, walk away with some money in your pocket and a paid-in-full release on your mortgage. Now admittedly, I have heard stories about very bad experiences where the homeowner still lost their home in foreclosure when they thought it was all taken care of. The highest and best deal is cash paid for the entire mortgage. That is not always possible from all or any investors. The next best deal is selling to an investor who has a new mortgage lined up in his/her name, close with a title company, and your past due note is paid off at that time. There are many other variants of a purchase by an investor that involve such things as contract for deed, taking subject to, land trusts, etc. The bottom line on all of these sorts of transactions is that there is more risk to you the seller than to the investor that simply buys the property outright. These methods can however be successful.
What We’ll Pay For Your Home
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