Full Answer
As a practical matter, the foreclosing trustee is usually the attorney for the lender. However, the trustee “must act with absolute impartiality and with fairness to all concerned.” First Fed. Sav. & Loan Assoc. of Dallas v. Sharp, 359 S.W.2d 902, 904 (Tex. 1962).
Most foreclosures in Texas are nonjudicial. These are governed by chapter 51 of the Property Code and are held on the first Tuesday of each month between 10 a.m. and 4 p.m. at a designated spot at or near the county courthouse. The effect of foreclosure is to cut off and eliminate junior liens, including mechanic’s liens, but not tax obligations.
The standard applied is whether or not borrower’s complaint fails “to state a claim upon which relief can be granted.” Since such dismissals happen often, federal district court has effectively become a graveyard of wrongful foreclosure cases that were initially filed in state court.
The typical “wrongful foreclosure suit” may recite such causes of action in addition to allegations of procedural defect and inadequate sales price. These sometimes work if the lender’s misbehavior is egregious.
To succeed on a wrongful foreclosure claim in Texas, the homeowner must show three specific elements:A defect in the foreclosure sale proceedings;A grossly inadequate selling price; and.A causal connection between the defect and the grossly inadequate selling price.
Texas is a combination of a judicial and non-judicial foreclosure state; in short it allows for non-judicial foreclosures but ONLY if the lender or lienholder has a deed of trust as stated previously. Without a deed of trust the lender must obtain a court order to proceed with the foreclosure sale.
Declare Bankruptcy To Stop Foreclosure Declaring bankruptcy in Texas is one option you have when deciding how to stop foreclosure proceedings. As soon as the petition is filed in court, an automatic stay is put in place that prevents a foreclosure from proceeding.
Getting a temporary (about 10 days) restraining order. Obtaining a preliminary injunction, which usually lasts until the case is decided. Receiving a permanent injunction with a favorable court ruling.
Texas Law Allows For Non Judicial Foreclosure In Texas, the overwhelming majority of foreclosures are non judicial foreclosures. Most mortgage agreements in the state contain a 'power of sale' clause, which grants a lender the right to foreclose on the property by itself — without taking the borrower to court.
The "right of redemption" refers to one's ability to reclaim the property even after the foreclosure sale takes place. In Texas, the "right of redemption" is only available for specific kinds of foreclosure actions such as foreclosures of certain tax liens and property owners association assessment liens.
Texas law allows the borrower to block a nonjudicial foreclosure sale by "reinstating" the loan (paying the overdue amount) within 20 days after the lender serves the notice of default by mail.
Can I stay in my home during foreclosure? You do not have to move out on the sale date. If you are still living in the home after a foreclosure, the new owner will have to evict you. You'll get a notice to vacate (usually giving 3 days) before an eviction is filed.
The process may take as little as 41 days, depending on the timing between mailing the required notices and the actual foreclosure date. All foreclosure sales in Texas occur on the first Tuesday of the month between 10 a.m. and 4 p.m. The commissioner's court designates the loca- tion.
The alienation clause in a mortgage contract gives a mortgage lender the right to request the full and immediate repayment of the loan, including principal and interest, when the borrower sells or transfers their home.
Sometimes, lenders can't sell foreclosed homes at a price high enough to cover all the debt that borrowers still owe on their mortgage loans. When that happens, the lender takes a loss on the sale. That loss is known as a deficiency.
Definition. An accelerated clause is a term in a loan agreement that requires the borrower to pay off the loan immediately under certain conditions.
A lender may succeed in properly foreclosing on a home, but too often, the party trying to foreclose on the mortgage document simply does not have the right to foreclose. Lenders have treated mortgages as commodities for many years now, packaging them and trading them on the market.
It would be improper to suggest or advocate that a homeowner stop paying his mortgage, and anyone suggesting this should be avoided or approached with caution. However, as a Texas consumer, a homeowner does have the right to know whether the bank or company who has confronted him to foreclose on his home actually has the right to do so.
I am Robert Z. Cashman, the principal of Texas Foreclosure Defense ™, a litigation branch of the Cashman Law Firm, PLLC. The reality is that it is much easier and straightforward for an attorney to service the lender rather than to fight on the client’s behalf.
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Homeowners threatened with losing their home through a bank foreclosure may benefit from the services of a real estate foreclosure attorney. When you buy a home, you usually get a bank loan and agree to repay it with monthly payments.
These are governed by chapter 51 of the Property Code and are held on the first Tuesday of each month between 10 a.m. and 4 p.m. at a designated spot at or near the county courthouse. The effect of foreclosure is to cut off and eliminate junior liens, including mechanic’s liens, but not tax obligations.
There is no general right of redemption by a borrower after a Texas foreclosure. The right of redemption is limited to: (1) Sale for unpaid taxes. After foreclosure for unpaid taxes, the former owner of homestead or agricultural property has a two-year right of redemption (Tax Code section 34.21a).
Foreclosure notice and demand letters are attempts to collect a consumer debt. Accordingly, the federal Fair Debt Collection Practices Act (15 USC 1962, et seq., the “FDCPA”) and its companion Texas statute, the Texas Debt Collection Act contained in Finance Code chapter 392, both apply. The term “debt” is defined by the FDCPA as “any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment.” 15 U.S.C. sec. 1692a (5). Failure to disclose and provide verification of the debt when the borrower has requested it in writing has serious penalties under both laws, as do threats, coercion, or similar heavy-handed practices.
After the cure period has passed, a “Notice of Acceleration and Posting for Foreclosure” must be sent to a residential homestead borrower at least 21 days prior to the foreclosure date. This second letter must also specify the location of the sale and a three-hour period during which the sale will take place.
Notes are not enforceable forever, nor does a lender have an indefinite right to foreclose.
Foreclosures may be judicial (ordered by a court following a judgment in a lawsuit) or non-judicial (“on the courthouse steps”).
Wrongful Foreclosure Suit. “Wrongful foreclosure” is not technically a proper cause of action under Texas law, at least not standing alone, so the plaintiff borrower must specifically allege certain facts or defects in order to state a cause of action in state court.
In order to obtain the relief of judicial foreclosure from a District Court, the lien holder must: (i) allege execution and delivery of a secured debt instrument, (ii) allege ownership of the debt instrument, (iii) provide a description of the property secured by the lien, (iv) allege the execution and delivery of the lien instrument (an exception is an abstract of judgment), (v) allege the amount of the unpaid debt, and (vi) allege a default by the maker of the debt instrument. See generally Graves v. Drane, 1 S.W. 905 (Tex. 1886); and Shaw v. American Life Ins. Co., 60 S.W.2d 1110, 1111 (Tex. Civ. App. – Fort Worth 1933, writ dism’d). The prayer for relief in the petition should pray for the foreclosure of the lien along with a judgment against the debtor for the amount of the debt. The lien holder may recover attorney fees if recovery of attorney fees is: (a) provided for in the lien instrument and/or debt instrument, Tex. Jur. 3d Deeds of Trust and Mortgages § 207 (citing Jeffreys v. McGlamery, 96 S.W.2d 572 (Tex. Civ. App. – Amarillo 1936, no writ). and (b) pled for in the petition.
A valid judgment foreclosing the lien must be obtained from the District Court, which should include: (i) an award of the debt owed to the lien holder, (ii) court costs and attorney fees (if provided for in the lien or debt instrument), (iii) a decretal paragraph ordering the foreclosure of the lien, (iv) and a decretal paragraph directing a sheriff or constable to seize and sell the collateral of the lien in satisfaction of the debt, and (v) a decretal paragraph in structing the sheriff or constable that if the collateral does not sell for an amount sufficient to satisfy the debt that the sheriff or constable should proceed to execute on other property of the defendant as in ordinary judgment execution. Tex. R. Civ. P. 309. Once a valid judgment foreclosing the lien has been entered by the District Court, a sale must be held in order to pass the title to a subsequent purchaser. Warnecke v. Broad, 161 S.W.2d 453, 454 (Tex. 1942). The writ of sale should be directed to the sheriff or constable in the county in which the property is located. De Guerra v. De Gonzalez, 232 S.W. 896, 899 (Tex. Civ. App. 1921, no writ).
Attorneys may be led to believe that venue of a judicial foreclosure action must occur in the county in which the property is located, however, the Texas Supreme Court has held that an action to foreclose a lien does not primarily involve title to real property. See Bennett v.
If you're facing foreclosure or think you may default on your mortgage, an experienced foreclosure lawyer can help you. Foreclosure alternatives may include loan modification, short sale, forbearance, reinstatement, and repayment plans.
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