Home Foreclosure Defense Lawyers
Foreclosure Defense from Experienced Debt Lawyers
Home foreclosure is the process by which the lender takes possession of your home in the event of a nonpayment, and then sells the home to recoup their investment (or a portion of it). With the economic hardship experienced by many, it is no wonder that millions of Americans fear losing their homes because of piling debt coupled with high interest rates. However, your home can be your greatest asset so it’s important to protect it.
Whether you are facing the foreclosure of your house or another property, you might need help from reliable foreclosure defense lawyers to see you through the entire process. At Leinart Law Firm, we have foreclosure defense lawyers to help you keep your property and money while providing other debt solutions to your problems.
You have worked for years to pay off your mortgage, and we want you to get your investment by protecting your property despite your current financial situation. By hiring an attorney, you can fight to keep your home and learn about other options. The thing is, a foreclosure can be tough not only for you, but for the entire family.
Helpful Information About Home Foreclosure
Impact of Foreclosure on Your Life
Foreclosure can also affect your credit score. In fact, once you lose a home due to foreclosure, your credit score will drop an estimated 280 points. Restoring your credit score can take years of making on-time payments. You may also experience tax problems in the future because of home foreclosure. Once you lose your home, tax implications can occur. The IRS notes that borrowed money that is not paid back is considered an income and is therefore taxable. Once you start repaying the money to avoid foreclosure, it will be included as part of your income tax.
Another impact of foreclosure is that it might difficult for you to find another home. Most lenders will require you to wait before they even consider your new home mortgage application. This can be avoided as long as you explain your circumstances. In most cases, people whose foreclosures were brought about by events that are beyond their control are awarded a shorter waiting period.
Home foreclosures often lead people to relocate to another place. This means that they have to look for another job closer to their new home. Unfortunately, some companies will require their employees to submit a financial profile, and a foreclosure is similar to a criminal record. A home foreclosure may cause your future employers to think that you have poor management skills. Which means they might be biased toward your ability for the job you are applying for.
More importantly, losing a house because of home foreclosure is like losing an important member of the family. The final impact of foreclosure is that people tend to suffer from emotional distress once they are subjected to this particular experience.
Home Foreclosures in Texas
Under law, a home foreclosure in Texas is governed by the Federal Consumer Financial Protection Bureau. Under the law, the mortgage service provider needs to wait for 120 days of payment delinquencies before filing for home foreclosure in Texas. This is to give you enough time to figure out what to do, such as hiring foreclosure defense lawyers.
Home foreclosure in Texas is non-judicial. This means that the lender can foreclose without even going to court as long as the deed of trust contains the authority for non-judicial foreclosure sale, also called the “power of sale clause.” Considering that navigating through home foreclosure in Texas can be very complicated, it is more beneficial for you to hire a foreclosure defense attorney, in terms of money and effort.
Bankruptcy Can Help You Avoid Foreclosure
Will a Chapter 13 Bankruptcy Avoid Foreclosure?
A Chapter 13 bankruptcy will stop the foreclosure of your home and allow you to repay the back house payments over time. Filing a Chapter 13 can also eliminate or reduce credit card debt, medical bills, and other unsecured loans, which will free up money to make your house payment.
As a result, you don’t have to worry about negotiating with your bank regarding past due mortgage payments. Additionally, you should have more disposable income after your repayment plan is put into effect. Consequently, you should be able to make your monthly mortgage payment and avoid foreclosure.
What if I’m Not Yet Behind or Don’t Want to Keep My House?
If you are current or almost current on your home, and if wiping out the amount of your monthly unsecured debt payments would allow you the disposable income to be able to consistently pay your mortgage, a Chapter 7 bankruptcy may be a good solution.
Likewise, if you do not want to keep your home, but are concerned that the bank will try to collect the deficiency balance from you after they sell it or issue a 1099 (taxable income) form to you, a Chapter 7 bankruptcy can discharge this deficiency from your credit.
In order to file for Chapter 7 bankruptcy, your median household income must be below the state of Texas’s median income for homes similar in size, or you must pass the Chapter 7 means test. If you are eligible to file for Chapter 7, debt on credit cards, car loans, medical bills, and other forms of unsecured debt will be wiped clean. Once your unsecured debt is discharged, you should have more disposable income to pay your mortgage (assuming you have been paying on these debts).
Other Options Besides Bankruptcy
- Do nothing and let the house foreclose – If you do not want to stay in your home you can do nothing and let the bank foreclose on your home. If this is the direction you decide to go, you should make arrangements as soon as possible to find another place to live. If the bank is not able to sell your home for the amount of your loan plus their attorneys fees they can report this amount to the IRS as taxable income. For this reason, even if you think you do not want to keep your home, you should consult with a legal professional to see if bankruptcy could be an option to help you through this process.
- Forbearance agreement or Loan Modification – You have probably already tried working with your lender to catch up on your payments or otherwise modify your loan. In most instances, your lender will require a significant portion of the arrears (the amount you are behind) to show a “good faith” effort towards getting the loan payments back on track. What a lot of people don’t understand is that a Chapter 13 Bankruptcy can do this for you and the mortgage companies are court mandated to allow you to catch up on your payments over a period of 3-5 years (longer that most modifications or forbearance agreements allow). Additionally, you can still apply for and receive a loan modification or refinance even while you are in a Bankruptcy.
- Pay an unscrupulous ‘Loan Mod’ company to work with your lender on your behalf – Many desperate homeowners facing foreclosure are so scared of Bankruptcy they pay scam artists a lot of money (more than you would pay a Bankruptcy attorney) to “work with” the mortgage company on their behalf. These companies take your money, make a few phone calls and chalk you up as their next victim. Beware of any company that promises or guarantees that they can stop the foreclosure through any method other than Bankruptcy or that tells you to make your mortgage payments directly to them.
So is bankruptcy right for you? The best way to find out is to meet with an experienced legal professional like those at Leinart Law Firm. There’s no obligation and they’ll give you honest, straight answers and solutions to your financial problems.
Foreclosure Terms You Need to Know
Power of Sale Provision
This is a clause in a deed, trust, or mortgage that states that the buyer gives prior authorization for the sale of the property in order to pay the balance on the loan if they default. This means when you obtain your loan, you give permission for the lender to sell the home to help pay off what you owe if you cannot make payments. The lender can foreclose on your home without the court’s guidance or approval. Texas allows power of sale foreclosures.
Notice of Default
This is a notice that is recorded by the trustee at the county recorder’s office. The notice of default is official notice to the borrower that they are in default. If the default is not cured, by making payments, then there is a Notice of Sale filed.
The Mortgage Electronic Registration System, Inc. (MERS) is a company that tracks mortgages. This database follows mortgages as they are sold and transferred.
Real Estate Owned property (or REO property) is when the bank owns the property due to a foreclosure. Once the bank owns the property a loan servicer will make sure that the property is secure and maintain the property and inspect it regularly.
What is the Homestead Exemption?
If you are going through bankruptcy, you may hear a lot of legal terms flying around. The homestead exemption is one of them. When you are going through Chapter 7 or Chapter 13 bankruptcy, the homestead exemption can assist you in keeping value in your home.
When you own a home and the value increases above what you owe, you gain equity in the home. The homestead exemption allows you to keep that equity. How the homestead exemption impacts your bankruptcy depends on how you are filing. There are different ways that it can impact a Chapter 7 bankruptcy from a Chapter 13. Each state has a different amount of equity that you can shield from creditors.
To prevent people from shielding all their money by purchasing a home, the court made certain requirements that must be met to qualify. Some states require that you have lived in the house for a few years prior to filing. There are also federal caps to homestead exemptions that you should talk about with your bankruptcy attorney.
Our Attorneys Can Help Relieve Your Debt
Our foreclosure defense attorneys at Leinart Law Firm have extensive experience and knowledge to provide the right advice on how to deal with home foreclosure. More than stopping home foreclosures, we also offer other debt solutions for the following: