Foreclosure in Texas: A Complete Overview (eg, Right of Redemption, Deficiency Judgments, the Auction Process & More)

ForeclosureBusinessNews.com: “Foreclosure News the Average Joe Can Use!”

If you’re facing foreclosure in Texas, following is a complete overview of the process. We’re going to start with the Right of Redemption law, because that’s what many homeowners want to know about as they’re desperate to stop foreclosure.

What is the Right of Redemption?

As explained in the post, Right of Redemption Laws: How to Get Your Home Back – Even After It’s Sold as a Foreclosure:

In the home foreclosure process, there is a period of time where the former homeowner can buy back their property from the person who bought it at auction. This period is known as the “redemption” period.

This post also outlines 7 specifics every homeowner (and potential buyers of property) needs to know about this stop foreclosure law, because it’s very intricate and varies from state to state.

Texas Foreclosure Laws: Texas is a Non-Judicial Foreclosure State

This means there is no right of redemption law in Texas. It also means the foreclosure process can proceed relatively quickly because, in ayman’s terms, all “nonjudicial foreclosure” means is that the person who owns the deed (mortgage) to the property – and this is usually a lender – doesn’t have to go to court to foreclose.

There is some hope though, so read on.

Foreclosures in Texas: Homeowner Rights When There are No Right of Redemption Laws

However, all is not lost, homeowners still have a glimmer of hope if they want to prevent foreclosure, because of the following.

Stopping Foreclosure in Texas: Why Every Homeowner Facing Foreclosure Should Know about “Power of Sale” Language

In non-judicial foreclosure states, there are usually very strict legal notice requirements that deed/mortgage holders to a property must file before a foreclosure can take place.

For example, in Texas, if language known as “Power of Sale” is included in the deed/mortgage documents, then a homeowner must be given at least 20 days to cure any default (ie, catch up on all mortgage arrears).

So the lender must mail the homeowner a first letter (Notice of Default) before the clock starts ticking. Right there, that’s almost 3 week – not a lot of time, but something – for homeowners to take “prevent foreclosure” action.

After this, the lender must then mail the homeowner a second letter. In this second letter, the lender lets the homeowner know that their home loan has been “accelerated.” This is simply legalese that says, “Hey, Mr. Homeowner we’re speeding up the process. Pay all past due balances now because your home has been scheduled to be sold on the auction block.”

It’s when you get this second notice that you’re really running out of time.

BUT even then, as a homeowner you still have options. Usually at this point, they’re pretty severe.

Should You File Bankruptcy to Prevent Foreclosure in Texas?

For example, you can file bankruptcy. Filing bankruptcy halts all foreclosure proceedings. Learn the pros and cons of filing bankruptcy to prevent foreclosure.

Note: If there is no “Power of Sale” language in your deed of trust (mortgage) paperwork in Texas, a lender must then go the judicial foreclosure route. This is a longer, more expensive process, which usually works in the favor of homeowners trying to stop foreclosure.

As explained in the post, California Foreclosure Law: How to Stop Foreclosure Even If Your Home Is Sold at Auction, judicial foreclosures:

. . . are handled via the court system, hence the name “judicial.” What happens is, a lender files a complaint that outlines what the debt is and why they should be able to proceed with the foreclosure. Once the lender files, the homeowner is then served and both appear in court to resolve the process.

If the court finds for the plaintiff (the lender), it will issue a judgment for the total amount owed on the loan, PLUS the costs of the foreclosure process – up to and including all legal fees.

The Foreclosure Process in Texas: How Long Does It Take?

If “Power of Sale” language is in the deed of trust/mortgage paperwork, all proper procedures are followed and a homeowner doesn’t put up any type of fight (eg, filing bankruptcy), the foreclosure process can be completed in Texas in as little as 60 to 90 days.

Foreclosure Sales in Texas: The Process of Auctioning off a Property

In Texas, unlike in some states, lenders aren’t required to publish a notice of sale in the local newspaper. A notice of sale is filed with the county clerk’s office three weeks (21 days) before the sale takes place.

Foreclosed properties in Texas are sold off on the steps of the county courthouse between 10 a.m. and 4 p.m. on the first Tuesday of the month, irrespective of holidays.

Texas Foreclosures: Why Lenders Bid on Their Own Properties

Properties are sold to the highest bidder, which could be the lender themselves. Most lenders only want the sale to bring enough to cover what’s owed on the mortgage. So, if a property sells for at least this amount – whatever it is – then a lender won’t bid.

However, they will bid to protect their interests; so a “bottom bid” is in essence, in effect. For example, if $100,000 is owed on the house, then a lender wants the property to sell for at least this amount. So, the lender themselves will bid at least this amount.

If a property sells for more than is owed on the mortgage, then the property goes to the highest bidder, as stated above. The sale must be paid for in cash – usually the same day.

Foreclosure Auctions in Texas: What Happens When a Foreclosed Property Sells for Less Than Is Owed On It?

Homeowners may have to come out of pocket, ie, they can be sued by lenders for what’s known as a “deficiency judgment.”

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Texas Foreclosure Laws: About Deficiency Judgments in Texas

How a deficiency judgment is calculated in Texas?

An appraisal has to be done on the property first to determine what the “fair market value” of it is.

This can be good news or bad news for the homeowner because it doesn’t matter what you paid for the property or what it sold for at auction, the deficiency judgment will be calculated as the difference between what an appraisal determines what the current “fair market value” of the property is” and the amount that was owed on the property when it was sold.

So, if you bought your home at the height of the real estate market when prices were inflated, and the bottom has fallen out leaving you underwater, then you could be stuck owing quite a bit.

Conversely, if you bought in a “normal” market, or were lucky enough to buy below market value (eg, a short sale, a foreclosure), or have been in your home a long time and don’t owe much on it, then you probably won’t owe as much in a deficiency judgment, and might even get money back after the sale of your home at auction. See the section on “overbid funds” below.

Texas Limits on Deficiency Judgments

In Texas, lenders have two years from the date of auction to bring this suit against a homeowner.Any deficiency judgment may be limited or offset if the market value of the property is more than price obtained when the property was sold at auction.

Get Expert Help with Foreclosure in Texas

FYI, here is a list of limits on deficiency judgments broken down by state. As stated in this post, take note that laws change constantly, especially in these trying times, so check with a real estate legal/financial expert (eg, bankruptcy lawyer, real estate lawyer, tax attorney) in your state for current law as it relates to your situation.

Foreclosure Auctions in Texas: What Happens When a Foreclosed Property Sells for More Than Is Owed On It?

If the bid amount is more than the amount owed on the property, remaining monies go to what’s known as secondary or junior lien holders.

How Foreclosed on Homeowners in Texas Can Still Get Money Even After Their Home Is Sold at Auction

Did you know that it’s possible for your home to be sold at auction and you still receive money? It’s true.

As discussed in the post, How to Lose Your Foreclosed Home at Auction and Still Receive Thousands of Dollars, it’s a concept known as “overbid funds.” And, many homeowners lose out because they’ve never even heard of it.

Learn how to collect any overbid funds you may be owed if your home is sold at auction in Texas.

Related Posts

Home Loan Modification Help: Lenders Call It “Dual Tracking”; Homeowners Call It “Double Crossing”

Underwater On Your Home? Filing Chapter 7 Bankruptcy? Should You Reaffirm Your Mortgage?

“Cash for Keys” Can Help if You Have a House in Foreclosure & Can’t Afford to Move

Home Foreclosure Auctions: The Biggest Advantage and Disadvantage of Them

Stopping Foreclosure: Banks Considering Giving Principal Reductions, Permanent Modifications & More to Prevent Foreclosure for Many Homeowners

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©2011; Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

Free HUD Housing Counseling Program: The $88 Million Cut that Hurts Homeowners Trying to Prevent Foreclosure

ForeclosureBusinessNews.com: “Foreclosure News the Average Joe Can Use!”

Thousands of people have successfully utilized the services of their local HUD-approved Housing Counseling Assistance Program.

HUD Housing Counseling: Why It’s Necessary for First-Time Homebuyers & Existing Homeowners Alike

It was originally developed to provide free advice and assistance to first-time homebuyers, retired homeowners and people on the brink of foreclosure. Local housing experts also spent a lot of time teaching students how to avoid housing scams and how much of a mortgage they could realistically afford.

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It provided families with free seminars on the home buying and loan process in Spanish, Creole and English. Some of these seminars were required for people who were trying to get down payment assistance.

Overall, the HUD counseling program offered many tangible benefits for those who didn’t think they could afford a home and those who were trying to stop foreclosure.

The $88 Million Cut that Hurts Homeowners Trying to Prevent Foreclosure (& Others)

Recently, however, HUD has cut funding for this nationwide housing counseling program – and saved $88 million – but at what cost to the American people?

Without the free HUD housing counseling provided by experts, working- and middle-class families cannot realistically afford to hire attorneys when they run into foreclosure trouble.

Lately, pre-foreclosure assistance has been the biggest draw to housing counseling assistance programs.

More Home Foreclosures on the Way Because of This Cut?

With nowhere else to turn, we are going to see more homes fall into foreclosure and more neighborhood decline. Credit repair after foreclosure was another popular reason to visit the local HUD housing counselor . . . but no longer.

Actions the “Average Joe” Can Take to Help Themselves In Spite of These Cuts

All of this means it’s time for homeowners and would-be homeowners to start educating themselves.

The only bright spot appears to be the National Foreclosure Mitigation Counseling Program, which is run through NeighborWorks America. It expects to get about $65 million for 2011. Their main purpose is to help people figure out solutions for saving their homes.

Also, President Obama has stated that he intends to bring back funding for HUD’s housing counseling programs for 2012, but it’s still not set in stone. Any type of free housing counseling assistance is going to be first on the list of budget cuts if it comes down to it.

Yet another low blow for hard-working Americans, which is why it’s up to the individual to arm themselves with the knowledge they need to either stop foreclosure or buy their first home.

Related Posts

Home Loan Modification Scams to Be Aware Of

Foreclosure Cleanup Money: HUD Ponies Up Another $1 Billion to Help Clean Up, Clear Out and Rehab Foreclosed Properties

Prevent Foreclosure Advice: Was Your Home Loan Legal? Get a Forensic Loan Audit to Find Out

Foreclosure Cleaning Contracts: Learn How to Register Your Business w/HUD & Other Gov’t Contracting Agencies

Foreclosure Cleaning: What You Should Know About HUD Pricing Guidelines

P.S.: Like this post? Follow Foreclosure Business News on Twitter.

Copyright © 2011 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

The Real Estate Market and House Values: Foreclosures Continue to Drag Down Home Prices – Options It Leaves for the Average Homeowner

ForeclosureBusinessNews.com: “Foreclosure News the Average Joe Can Use!”

According to the Bloomberg BusinessWeek article, Home Prices Slid 5.7% in February From Year Earlier, FHFA Says, foreclosures continue to drag down home values. The article states:

Home values are dropping as foreclosures undermine real estate prices. The share of homes sold in March that were distressed properties, meaning foreclosures or short sales, rose to 40 percent from 39 percent in February, the National Association of Realtors reported yesterday.

U.S. House Property Values: What This News Means for “the Average Joe” Homeowner

Before the foreclosure crisis started back in 2007, many homeowners didn’t give much thought to how much their neighbor might have sold their home for.

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Now though, with each “For Sale” sign that pops up in a neighborhood, those not selling are wondering, “Is it a foreclosure; are they doing a short sale; are they doing a deed in lieu of foreclosure,” and how much more will this drop my property’s value.

Market House Value Appraisal: Why What Your Neighbor Sells for Affects Your Property’s Value

To determine house value, surrouding, similar properties are taken into account (usually those within a 1-2 mile radius).

In essences, a house’s market value is only as good as what’s around it has sold for. So, for example, if you have a 3-bedroom, 1,900 square foot ranch on a quarter-acre lot that you paid $150,000 for; it’s value is determined by what similar homes have sold for in the last year or so.

Hence, if your neighbor does a short sale, and sells his property for $89,000, it drops your property’s value.

The rationale behind this is, why would a potential buyer pay $150,000 for your home, when they could get one very similar to it for $89,000. After all, every buyer is out for the best deal. Your toil, what you paid for your home seven years ago, the updated fixtures you proudly saved for and installed yourself don’t matter.

And, this is why so many homeowners who are not selling — and who depend on their homes increasing in value, not decreasing – are furious these days.

Market House Values: The Good News for Homeowners

If you love your neighborhood and have no need or desire to move/sell, while sliding property values don’t make you happy, at least it’s something you can live with. After all, your home’s value may come back – over time.

And even if it doesn’t, if you’re fortunate enough to be able to pay off your mortgage, at least you’ll be able to live in a home and neighborhood you love.

Market House Values: The Bad News for Homeowners

If you’re on the other side however, the slide in housing prices can have devastating financial consequences. For example, if you were depending on the increasing equity in your home to finance your child’s education, or to sell and downgrade upon retirement, then you might be in a heap of trouble.

This is especially true if you bought at the height of the real estate market (roughly 2003-2006). Many of these homes were overvalued to begin with, so they’re never going to regain their value.

Conclusion: The Real Estate Market and House Values

The bottom line is, as was discussed in yesterday’s post here, homeowners have some tough decisions to make. They have to get real about what this housing crisis means for their immediate financial future, as well as long-range financial goals.

Market House Values: Options to Consider

(i) Can you really afford the home you’re in? If not, maybe it’s time to file bankruptcy, do a short sale, consider a deed in lieu of foreclosure, , etc. Note: Learn the severe tax consequences if you short sale your home after 12/31/2012.

(ii) Is homeownership right for you . . . right now: Once you examine the factors, you may find that it’s not.

(iii) Is home ownership keeping you from achieving other dreams? For example, you can’t move to pursue other career opportunities because your home is underwater.

As you can see, there are no easy answers once you start digging. But this is what the real estate market’s declining home values have left homeowners facing.

Related Posts

Foreclosed Properties Continue to Drag Down Construction of New Homes: What It Means for the Average Joe

Home Foreclosure News: 9 Million Homeowners Could Go Into Foreclosure Between 2009 & 2012

Stop Foreclosure: How to Ready Your Home for a Fast (Short) Sale

Stop Foreclosure: The Secret Your Lender Won’t Tell You That Can Help Save Your Home

Stop Foreclosure Help: What Happens When You Stop Paying Your Mortgage

Stop Foreclosure: 1 Really Easy Thing You Can Do to Buy More Time to Save Your Home

P.S.: Like this post? Follow Foreclosure Business News on Twitter.

Copyright © 2011 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

Utah Houses in Foreclosure: Contributing to Significant Rise in Homeless Rate?

ForeclosureBusinessNews.com: “Foreclosure News the Average Joe Can Use!”

According to the article, Politicians, housing advocates call for action to ease foreclosures, in the 4/20/2011 edition of The Salt Lake Tribune, there’s been a considerable rise in the number of families seeking assistance from homeless shelters. The article states:

Utah is on track for more than 40,000 foreclosure notices in 2011, . . . Pamela Atkinson, an advocate for the homeless, said while she had no firm statistics to connect foreclosures to homelessness, there was a 59 percent increase in families at shelters.

Houses in Utah in Foreclosure: Call a Spade a Spade

While legislators may be unwilling to pin the sharp rise in families in Utah seeking help from homeless shelters on foreclosures, common sense dictates that you call a spade a spade.

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When was the last time there was this sharp of a rise in this type of thing happening? Of course houses in foreclosure in Utah are one of the main factors contributing to the rise in families seeking help from homeless shelters.

And, it’s not just living accommodations families are asking for help with; it’s the basics like food.

There are a number of reasons Utah homeowners may find themselves facing foreclosure. But, two of the main ones are:

Poor Lender Services: When it comes to negotiating with lenders, the right hand often doesn’t know what the left hand is doing.

Many times, homeowners are foreclosed on WHILE they’re in the process of seeking a home loan modification from their lender. Proof? A Utah homeowner actually filed suit to stop foreclosure proceedings because of such shoddy service. He says that he made:

. . . phone call after phone call to the bank and a company hired by it in which false criteria were used to block his participation. He said the various entities were not communicating with each other and turnover is such that he constantly has to talk to new people unfamiliar with his case. He went on to state that it was his belief that they were trying to stop him from short-selling his home so that they could foreclose on him.

The federal government has introduced “prevent home foreclosure legislation” to stop this type of thing from happening.

Failing to Buy into the New American Dream: Homeowners have to own their part in this foreclosure crisis. Many hold on to homes they can no longer afford, delaying the inevitable, eg, bankruptcy, a short sale, deed in lieu of foreclosure, etc.

As Suze Orman, the noted financial expert, cited in the linked-to post just above (and in her new book, THE MONEY CLASS: Learn to Create Your New American Dream”):

. . . it’s time for Americans to rethink “what aspects are in need of revision, and how (the American dream) must be refashioned to fit our lives,” lives that may now include not owning a home.

Learn more about houses in Utah in foreclosure and the wide-spread impact it’s having on the community, much the same as discussed in the post, Foreclosure Crisis Lessons: How Foreclosures Affected One Neighborhood.

It highlights the fact that we’re all in this home foreclosure mess together. And, the sooner more homeowners get real about their options, the sooner the housing market can recover.

Related Posts

Home Foreclosure News: 9 Million Homeowners Could Go Into Foreclosure Between 2009 & 2012

Stop Foreclosure: How to Ready Your Home for a Fast (Short) Sale

Stop Foreclosure: The Secret Your Lender Won’t Tell You That Can Help Save Your Home

Stop Foreclosure Help: What Happens When You Stop Paying Your Mortgage

Stop Foreclosure: 1 Really Easy Thing You Can Do to Buy More Time to Save Your Home

P.S.: Like this post? Follow Foreclosure Business News on Twitter.

Copyright © 2011 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

Foreclosed Properties Continue to Drag Down Construction of New Homes: What It Means for the Average Joe

ForeclosureBusinessNews.com: “Foreclosure News the Average Joe Can Use!”

New housing starts are up; they rose by 7.2% in March. But, according to today’s report by Reuters, this does not mean that the foreclosure crisis is over. The article,  U.S. home building rises, foreclosures a threat, states:

. . . [new home] construction . . . continues to be dragged down by stiff competition from a flood of foreclosed properties. . . . With both the demand and need for new homes still very low, housing starts aren’t going to enjoy a more meaningful recovery for a few years yet.

Home Foreclosures Make Market Years Away from Recovery: What It Means for the Average Joe

1. Buy homes cheap: Quite frankly — deals. If you’re in the market to buy a home, now’s a good time, especially when coupled with some of the lowest interest rates around in decades.

2. Financial security: Buying cheap foreclosed properties can set you up for life — if you’re smart about it. As my stepfather used to say, “They’re not making any more dirt.” What he meant was, God ain’t creating no more earth. So if you invest smartly, real estate is a sound investment whose profits won’t blow away in the wind like say, stocks.

But, this isn’t all. The housing news means that many homeonwers have some hard choices to make. Namely . . .

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3. Is it time to walk away from your home? As the experts state, it’s going to be years before the housing market recovers. And, according to Suze Orman, a financial expert, who was featured on a recent episode of the Joy Behar Show, many of these property values are never coming back.

So, as she says, many homeowners have to get real and face the “new American reality.” If you’re underwater on your home and are holding on  hoping that its value will come back — and financially destroying yourself in the meantime — it may be time to let go.

3 Options for Homeowners Who Want to Walk Away from Their Mortgage

A short sale: Click to learn what this is. FYI, if you do a short sale after December 2012, you will be responsible for paying income tax on any “shortage.” What do we mean?

Home Foreclosure and Taxes: Important Tax Consequences of a Short Sale after December 31, 2012

For example, if you owe $200,000 on your home and you sell it for $100,000, the government will tax you on the $100,000 difference because it’s seen as a financial “windfall.” So if you’re going to do a short sale, be sure to do it BEFORE December 31, 2012.

Remember, in this market, it’s taking homes months and months — some more than a year — to sell. So if this is an option you’re considering, don’t delay too long. FYI, the tax break applies only to primary residences.

A deed in lieu of foreclosure: Learn what a deed in lieu of foreclosure is and  all important difference between “with recourse” and “without recourse;” and

Chapter 7 Bankruptcy: Learn more about this option, and if you should reaffirm your mortgage debt.

Hard choices indeed.

Related Posts

Home Foreclosure News: 9 Million Homeowners Could Go Into Foreclosure Between 2009 & 2012

Stop Foreclosure: How to Ready Your Home for a Fast (Short) Sale

Stop Foreclosure: The Secret Your Lender Won’t Tell You That Can Help Save Your Home

Stop Foreclosure Help: What Happens When You Stop Paying Your Mortgage

Stop Foreclosure: 1 Really Easy Thing You Can Do to Buy More Time to Save Your Home

P.S.: Like this post? Follow Foreclosure Business News on Twitter.

Copyright © 2011 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

Florida Housing Assistance: Get 6 Months of Your Mortgage Paid Free — How? Via the State’s “Hardest-Hit” Fund

ForeclosureBusinessNews.com: “Foreclosure News the Average Joe Can Use!”

Did you know that practically 1 in 4 Florida homes are either foreclosed upon or in the foreclosure process? That’s a lot of vacant homes!

Florida Housing: State Leads Nation in Home Foreclosures

In fact, Florida leads the nation in the number of foreclosures. If you happen to live in this state (especially South Florida), all you have to do is look out your window and see the “For Sale” signs in every other yard.

Florida Foreclosures: How to Get 6 Months of Your Mortgage Paid for You

There might be hope for you if you happen to own a home in Florida that is in danger of getting foreclosed on. As of April 18th, 2011, Floridians can apply for mortgage assistance from the state in a new program called the “Florida Hardest-Hit Fund.” How appropriately named.

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Assistance with Mortgage: Programs for the Unemployed and Other Struggling Homeowners – What’s Required

Wondering how to dip into this fund and get 6 months of your mortgage paid for by the state? Here are the requirements per the program website:

1. Residency: You have to have Florida residency and personally live in the pre-foreclosed home as a “primary residence.”

2. Employment Status: You have to be underemployed or unemployed – “laid off” is okay; “fired” is not.

3. Income: Your annual income should be less than 140% of your area’s median income.

4. Banking: You need to have a savings or checking account.

5. Criminal History: You can’t have any recent bankruptcies or mortgage-related felonies.

6. Assets: You cannot have “unencumbered assets” worth three times your monthly house payment, or greater than $5,000 (the greater of the two).

Mortgage Requirements

1. Check with your lender to see if they will accept payments from a third party (most will).

2. Your mortgage cannot be over 180 days late when you apply for the program.

3. Your mortgage should have commenced prior to January 1, 2009.

4. Your mortgage balance as of right now cannot be greater than $400K.

Florida Housing Assistance: How to Start the Application Process to Get Money to Get Your Mortgage Paid for Up to Six Months

If you manage to meet ALL of these stringent requirements, start the application process immediately on the fund’s website. There’s a handy online application, but you will have to get out your mortgage paperwork.

Note: See an overview of the Florida Foreclosure Process – from Day 1 until the day you can be kicked out on the street by the sheriff’s office — in video at the bottom of the linked-to post.

Good luck!

Related Posts

Florida Foreclosure Process: A Quick Overview of the Home Foreclosure Process in the Sunshine State

Florida Foreclosure Law: How to Get Your Home Back Even After It’s Sold at Auction

Florida Foreclosures: Good News for Homeowners — Court Requires Mediation before Foreclosure

Florida Foreclosure Law: Chief Justice Orders Foreclosure Hearings to be Open to the Public

Florida Foreclosure Lawyer Making a Mint: One Fl Attorney says, “Murderers get more due process than homeowners being foreclosed upon”

Florida Foreclosure Law: Condo Associations Caught in the Middle When Lenders Won’t Foreclose & Owners Stop Paying the Mortgage

Florida Home Foreclosure Crisis: Sunshine State’s High Foreclosure Rates Creates Ripple Effect for Legal & Financial Institutions

Foreclosure Timeline for All 50 States: Get a state-by-state breakdown of how long the foreclosure process takes

Home Loan Help: Documents Needed to Apply for a Mortgage Modification with HSBC (and Other Lenders)

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Copyright © 2011 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

Home Loan Modification Help: Lenders Call It “Dual Tracking”; Homeowners Call It “Double Crossing”

ForeclosureBusinessNews.com: “Foreclosure News the Average Joe Can Use!”

When most homeowners trying to prevent foreclosure are going through the loan modification process, they automatically assume that their lender won’t foreclose – unless and until this process comes to some kind of resolution, right?

After all, the homeowner is not dodging the lender. They’re actively engaged in trying to stop foreclosure by seeking a modification in the first place.

But hold on buddy, not so fast. While homeowners are negotiating their little patooties off thinking they’re working their way towards stopping foreclosure, lenders are on another track to start the foreclosure process – engaging in a practice called “dual tracking.”

Stopping Foreclosure via Home Loan Modification Help: What is Dual Tracking

Dual tracking refers to a common bank tactic [that lenders engage in even when homeowners are working their way through the loan modification process. To explain, when a borrower in default (ie, facing foreclosure) seeks a loan modification, the bank/lender often continues to pursue foreclosure at the same time.

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Why Lenders Often Proceed with the Foreclosure Process Even When a Homeowner Is Engaged in the Home Loan Modification Process

It’s quite simple actually – they’re protecting their ah, “assets,” just in case the mod doesn’t go through. To put it in more proper terms, as described in the Los Angeles Times article, Banks are foreclosing while homeowners pursue loan modifications:

Lenders say ‘dual tracking’ protects their investment if the homeowner is unable to qualify for new loan terms. . . . Mortgage servicers can lose money if they don’t foreclose in a timely manner, and repossessions often are complicated and lengthy.

Stopping Foreclosure: The Problem with Dual Tracking for Homeowners

There are a couple of problems with it, namely:

(i) Homeowners are Clueless: Many don’t know that all of this is going on behind the scenes. They think they’re well on their way to stopping foreclosure, when in essence this is far from the truth;

(ii) Limited Options: Many homeowners facing foreclosure are not able to exercise their full options because they’re being left in the dark about what’s really going on.

For example, a homeowner in the above-reference LA Times articles said that equity she had in a home was “stolen” from her because the bank sold her home at auction while she was under application for a home loan modification. She said she would have “sold the home herself” had she known that the bank was auctioning off her property (ie, that the bank was on the dual track process).

She now lives in what was once one of her rental properties.

Most homeowners are not as lucky as this. They have nowhere to go and don’t know what to do when the very roof over their heads are sold out from under them.

Stopping Foreclosure — Home Loan Modification Help: Recently Introduced Legislation to Put a Halt to Dual Tracking

As we discussed recently on this blog in the post, Trying to Stop Foreclosure? 5 Changes Some Mortgage Providers are Now Offering to Help You Keep It, many lenders are overhauling their foreclosure proceedings.

And, some of the very issues raised by dual tracking are attacked head on, namely that lenders will stop foreclosing on homeowners who are in the middle of loan modifications.

Seems like it’d be common sense and not require federal legislation, right? But then again, when does one have the occasion to use the phrases “common sense” and “government legislation” in the same sentence?

Home Loan Modification Help: What to Do If You’re Facing Foreclosure and Seeking a Mod

Outright ASK your lender if they are initiating foreclosure proceedings while you’re actively engaged in seeking a home loan modification. To digress for a minute, there’s an old idiomatic expression in real estate that goes, “If it’s not in writing, it doesn’t exist.”

So, don’t believe what your lender says to you; get everything in writing just in case you find yourself in court, like Mr. Pino did in this Florida foreclosure case, which may be taken up by the state’s supreme court.

Conclusion: Stopping Foreclosure

It seems that every week a new foreclosure law is popping up — from state to state, and federal legislation. If you’re trying to prevent foreclosure, get intimate with laws as they related to this procees for, one overlooked detail can be the difference between stopping foreclosure and losing your home altogether.

Related Posts

How to Stop Home Foreclosure For Over 2 Years Without Making Payments: Do it Yourself for Free — Here’s How

Stopping Foreclosure: What to Do When the Bank Refuses to Accept Your Mortgage Payments & Tries to Escalate the Home Foreclosure Process

Right of Redemption Laws: How to Get Your Home Back – Even After It’s Sold as a Foreclosure

Home Loan Help: Documents Needed to Apply for a Mortgage Modification with HSBC (and Other Lenders)

How to Lose Your Foreclosed Home at Auction and Still Receive Thousands of Dollars

Stop Foreclosure Help: What Happens When You Stop Paying Your Mortgage

P.S.: Like this post? Follow Foreclosure Business News on Twitter.

Copyright © 2011 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

Florida Foreclosure Law: FL Supreme Court Expected to Consider Case That Could Be Good News for Homeowners Trying to Stop Foreclosure

ForeclosureBusinessNews.com: “Foreclosure News the Average Joe Can Use!”

It seems that the alleged robosigning practices of David Stern, a Florida foreclosure attorney, are catching up to him.

We discussed him in a post before here, explaining how one Florida foreclosure defense attorney Michael Wrubel was so outraged at the again alleged practices of Mr. Stern’s firm that he stated, “I’ve represented murderers where I’ve gotten more due process.”

So, what’s this case all about that it might get heard by the Florida Supreme Court?

Basically, it’s this. The plaintiff, a Mr. Pino, was facing foreclosure. The suit was filed against Mr. Pino by The Bank of Mellon New York (BNY), which, according to the article, Florida Supreme Court expected to consider foreclosure case on HousingWire.com, “acts as trustee on certain mortgage-backed securitizations, which are created when mortgage loans are pooled and placed in a trust.”

The article goes on to note that:

“While foreclosure actions related to properties held in the trust must be brought in the trustee’s name, the foreclosure activity itself is coordinated, litigated and managed entirely by the servicers.”

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Basically, the point BNY is raising here is, yeah, we initiate foreclosure proceedings, but, we don’t do any of the actual legwork, eg, gathering documents from homeowners, signing off on procedures, etc.

This, BNY is saying, is done by an actual “servicer” (or someone on the servicer’s behalf), like a real estate and/or foreclosure lawyer.

And, this is where Mr. Stern’s foreclosure law firm enters the picture.

Basically, BNY is saying, it’s not our fault if fraud is perpetrated on a homeowner.

This brings us to the crux of the lawsuit by Mr. Pino, which is that Mr. Stern’s firm perpetuated fraud in relation to the handling of mortgage assignment documents in foreclosure proceedings.

Florida Foreclosure Law: Setting Precedents

This could have wide-ranging effects if the Florida Supreme Court does take up this foreclosure case, for it can set legal precedents – precedents that can hold other mortgage servicer’s feet to the fire.

Florida Foreclosure Law: Possible Good News for Homeowners Trying to Prevent Foreclosure

This could be good news for homeowners trying to stop foreclosure who can prove they’ve been a victim of fraud.

Learn how the entire Florida foreclosure process works — from Day 1 up until the day you’re thrown out of your house (which can take a year or more!) — in the video below.

Related Posts

Florida Foreclosure Law: How to Get Your Home Back Even After It’s Sold at Auction

Florida Foreclosures: Good News for Homeowners — Court Requires Mediation before Foreclosure

Florida Foreclosure Law: Chief Justice Orders Foreclosure Hearings to be Open to the Public

Foreclosure Laws in Florida: A Quick Overview of the Home Foreclosure Process in the Sunshine State

Florida Foreclosure Lawyer Making a Mint: One Fl Attorney says, “Murderers get more due process than homeowners being foreclosed upon”

Florida Foreclosure Law: Condo Associations Caught in the Middle When Lenders Won’t Foreclose & Owners Stop Paying the Mortgage

Florida Home Foreclosure Crisis: Sunshine State’s High Foreclosure Rates Creates Ripple Effect for Legal & Financial Institutions

Foreclosure Timeline for All 50 States: Get a state-by-state breakdown of how long the foreclosure process takes

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Copyright © 2011 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

Home Foreclosures to Blame for Rising Cost of Rents and Increase in Foreclosure Rental Scams on Popular Sites Like Craigslist

ForeclosureBusinessNews.com: “Foreclosure News the Average Joe Can Use!”

According to a recent article on MortgageNewsDaily.com, entitled, Rents on the Rise: Shadow Inventory a Solution? rents are on the rise and will continue so well into next year, possibly substantially. And, it’s due in part it’s due to the home foreclosure crisis.

The Home Foreclosure Crisis and Its Impact on the Rental Market

It’s a classic case of supply and demand: with less inventory (fewer apartments/homes) on the market and more demand for them as more people lose their home to foreclosure and re-enter the rental market, prices shoot up.

The article states:

. . . renters could be facing some substantial rent increases in the year ahead. The firm’s quarterly report shows that the vacancy rates for apartments dropped dramatically during the first quarter and rents have begun to rise . . .

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4 More Reasons Rents are on the Rise Thanks to the Home Foreclosure Crisis

The article also points out other reasons that rents are on the rise, namely:

I. Improving Job Market: Although unemployment still hovers at an uncomfortable 8.8% as of March 2011, the job market is improving, especially for younger workers (those aged 20 to 34), who are usually not looking to buy a home anyway.

Then when you couple this with the fact that . . .

II. The Foreclosure Crisis Continues: Homeowners who are losing their homes to foreclosure are entering the rental market in droves because many can’t qualify for home loans. You have to wait usually at last 3 years after a foreclosure before you can qualify for a Fannie Mae or Freddie Mac home loan.

Adding another wrinkle is that . . .

III. Larger Downpayments are Required to Secure a Home Loan: Where zero-down home loans were common before the foreclosure crisis hit in late 2007, now they’re practically non-existent. As we discussed in a recent post here entitled, Home Loan, Bad Credit and How to Qualify:

Zero down home loans are basically a thing of the past for the foreseeable future (I personally don’t see them ever coming back to the degree they were before this most recent home foreclosure crisis hit).

But the reality is, many who have credit problems (ie, those with credit scores like 580 [and who’ve gone through foreclosure]), don’t have down 5 to 10% down payments. . . . [with] the average home price in America [being] just under $200,000. . . . Even a low down payment of 3.5% is $7,000. And don’t forget, this is just the down payment. This doesn’t take into account closing costs [which can run another 2 to 4 percent of the purchase price]

IV. Fewer Investing in the “American Dream” of Homeownership: More and more Americans are, to put it simply, disgusted by the home foreclosure crisis – whether they’ve lost homes or are on the other side of the fence (ie, they’ve hung onto their homes but are angry at many who’ve “shucked their responsibility” and walked away).

Depressed property values and increased property taxes contribute to this anger, frustration and disgust. So, many are fleeing to rent – unshackling themselves from homes that have become, in essence, bad investments and arguably “mortgage money its.” And not for nothing, many of the rentals are as nice – or nicer – and cheaper than the homes some previous owners have left, but without the maintenance.

Talk about incentive for renting rather than buying.

For all of these reasons, it just makes for many to rent – at least until the market stabilizes and property values start to climb again.

Related Posts

Renters Affected by Foreclosure at Greater Risk of Homelessness

HOAs Around the Country Tightening Rental Rules

Because of Home Foreclosures, Buying a Home Is Cheaper than Renting in Almost 75% of Largest American Cities

“Cash for Keys” Can Help if You Have a House in Foreclosure & Can’t Afford to Move

Cash for Keys Program: If You’re in Foreclosure and Have Filed Bankruptcy What You Need to Know

Consumer Alert: Beware of Foreclosure Rental Scams via Popular Sites Like Craigslist.com and Kijiji.com: Insight on How to Avoid Them

P.S.: Like this post? Follow Foreclosure Business News on Twitter.
Copyright © 2011 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

Trying to Stop Foreclosure? 5 Changes Some Mortgage Providers are Now Offering to Help You Keep It

ForeclosureBusinessNews.com: “Foreclosure News the Average Joe Can Use!”

Good news for homeowners or those who have recently lost a home – several well-known mortgage servicers have agreed to modify their future foreclosure procedures to benefit borrowers.

Losing Your Home to Foreclosure? Good News – Some Banks are Modifying Procedures to Work with Borrowers; Here’s Who They are & What They’re Doing

The big names include Bank of America, Wells Fargo, and JPMorgan Chase. This is a long-overdue overhaul of their flawed systems, and you could benefit if your mortgage provider is one of the aforementioned.

Just what kinds of changes are taking place?

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5 Changes to the Foreclosure Procedure That Spell Good News for Homeowners

1. Better staff training regarding foreclosure proceedings.

2. More “layers of oversight” that include their law firm partners.

3. Borrowers will have one bank contact, so they won’t get passed around to several employees.

4. Banks will stop foreclosing on people who are in the middle of loan modifications.

5. Banks will have independent consultants review all of their foreclosures from the past two years. Better yet, homeowners may get compensation if the consultants find out that they were fined too much.

While it’s good news that these banks are redressing some of their mistakes, they claim that very few people who lost their homes will see any compensation due to bank errors. In any case, this is a boon to borrowers who are planning on taking out a new mortgage soon.

You have the attorneys general on your side, who are fighting to get banks reduce some of the mortgage debt owed by their borrowers.

Did You Know: The Average Homeowner in Foreclosure is Delinquent on Their Mortgage by More than 16 Months?

Due to these new changes, servicers must choose to either hire more staff members to work on foreclosures OR to slow foreclosure proceedings. If you’re like the average American homeowner in foreclosure, you have been delinquent on your mortgage for over 16 months!

Could you be one of the lucky ones that get even more time to stay in your home? Or will your service provider have to pay steep fines?

More “Prevent Foreclosure” Changes Coming in the Next Couple of Weeks

Learn more about these “stop foreclosure” changes in The New York Times article, Servicers Said to Agree to Revamped Foreclosures. And FYI, more changes are reported be coming in the next two weeks!

Related Posts

Home Loan Help: Documents Needed to Apply for a Mortgage Modification with HSBC (and Other Lenders)

How to Lose Your Foreclosed Home at Auction and Still Receive Thousands of Dollars

Stop Foreclosure Help: What Happens When You Stop Paying Your Mortgage

P.S.: Like this post? Follow Foreclosure Business News on Twitter.
Copyright © 2011 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

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