Stop Foreclosure in Texas - Not An Easy Task
Texas is what's called a 21-day state, or non-judicial foreclosure state.there are only 6 of them in the entire U.S
. The simple explanation of this is that lenders don't need to use the court's legal system in order to foreclose. The requirement in this type of foreclosure, also known as a Notice of Trustee's Sale, is that the lender post the notice at the County Clerk's office in the county where the property is located, at least 21 days PRIOR to the sale date. Since in Texas, foreclosure sales always occur on the 1st Tuesday of the month, determining whether or not there is sale date set is pretty easy once the information is public record. One can research the posted list at the County Clerk's office, or to find the information much quicker, use the Short Sale Monkey Homeowner Search Tool (if the property is in Travis or Williamson County).Even though it may be simple to determine which properties are facing the foreclosure auction, preventing that from occurring is a very different matter. Remember this fact, lenders don't actually want to take the house back and sell it as an REO (Real Estate Property). However, once a property gets to this point, there are only two things that can stop the foreclosure auction, 1) catch up the past-due payments, in-full, or 2) get an offer property that the meets the investor's guidelines for review as a short sale. Well there are really three things, if you include Bankruptcy, but I won't be discussing this option here.
The homeowner's financial hardship prevents them being able to catch up the payments themselves, if not impossible. Alternatively, the delinquent payments can be paid by a buyer, in what's called a "subject-to" purchase. Simply put, this is when a buyer, catches up the payments, takes full ownership of the house "subject-to" the existing loan and maintains the payments to the lender in place of the prior owner. The current owner moves and the new owner continues to make on-time payments for the remaining term of the loan, or resells it later, paying off the lender in full at that time. This strategy is often a good one for investors and the homeowner because the payments are being made on time to the lender, helping repair the prior owners credit, and the investor doesn't need to go through a loan application process.
Stopping foreclosure with a short sale offer is the other strategy, and our area of expertise. One of the most common ways to talk about foreclosures is to say, "the bank is foreclosing", or the "bank foreclosed". Technically, what's really happening in most cases is the investor that owns the loan is the one initiating the foreclosure, and the lender-servicer is simply acting on their behalf. The servicer hires an attorney to conduct the foreclosure process and a Trustee, on behalf of the attorney, acts as the "auctioneer". So, to stop the foreclosure from occurring in Texas, an offer that's submitted to the servicer must meet the short sale guidelines of the particular investor on the loan. If the servicer determines that the offer is within the investor's reviewable guidelines, they can request that the attorney either postpone the Trustee's Sale or put it on hold to allow more time to review all of the details of the offer. What's important to understand here is, even if the postponement or hold is granted, the servicer will very likely re-post the auction for the very next month since many short sales are not approved. By doing this right away, the servicers are preparing themselves for the possibility of the deal falling apart and missting the 21-day deadline to re-post.
Ideally, we are best able to help our clients when they contact us after only missing 3 or 4 payments and a notice of foreclosure hasn't been posted yet. When homeowners wait until the foreclosure notice has been posted, it becomes more difficult to help them.
Stop Foreclosure in Texas - Not An Easy Task
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