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Wrongful Foreclosure Information
For any business or homeowner, foreclosure is a frightening prospect. Unfortunately, in difficult financial times, it may not be possible to make appropriate payments on your home or business property. In this case, the lending institution from which you borrowed to pay for your property may initiate foreclosure proceedings. However, many people are not aware that there is a detailed foreclosure process that must be strictly adhered to in order for the foreclosure to be legitimate.

Wrongful foreclosure occurs when a lending institution illegally forecloses on the property of a home or business, either by failing to meet the requirements of the foreclosure process or by employing deceptive practices intended to facilitate foreclosure. In either case, an experienced legal professional may be able to assist the owner of the property in question by halting the foreclosure process.

Causes of Wrongful Foreclosure

A wrongful foreclosure can occur in a number of different circumstances, either as a result of negligence or willful deception. The following are some of the most common causes of wrongful foreclosures:

* Neglecting to send a notice of default before beginning foreclosure proceedings
* Failure to send the notice of acceleration in a timely manner
* Beginning foreclosure proceedings even if the debtor is not in default
* Accepting payments from the debtor but continuing with foreclosure proceedings

Foreclosure Process in Texas

Most real estate is financed by the borrower signing a promissory note for the mortgage, known as the “Deed of Trust”. In Texas, this Deed of Trust names a Trustee (usually a lawyer) to hold the legal title of the property in trust for the lender. If the homeowner defaults on the loan, the lender can order the Trustee to sell the property. Texas State laws require that at least 20 days notice be given to the homeowner if it is their principal residence. A “Notice of Default” and an “Intent to Accelerate” must also be posted at the courthouse where the sale will take place. The Intent to Accelerate is a document that calls the entire amount of the promissory note due immediately. Non-judicial foreclosures are conducted on the first Tuesday of each month, at the courthouse in the county where the property is located. Homeowners can attend and bid on their property but must be prepared for a cash sale.

Texas Laws & Wrongful Foreclosure

When lenders fail to comply with the foreclosure process required by law, they may be guilty of wrongful foreclosure. A lawsuit can be filed against the lender, but the homeowner must be able to prove that wrongful foreclosure occurred. Examples of wrongful foreclosure include:
•The notices leading up to the foreclosure were not accurate.
•The loan documents or the Deed of Trust were defective in some way.
•There was impropriety in the sale itself.
•Servicing errors were made, such as payments made by the homeowner were credited to the wrong account.
•The lender breached the contract when they failed to adhere to a forbearance agreement allowing the homeowner to catch up on missed payments.

Texas law allows the borrower to bring a suit in the District Court of the county where the property is located. The purpose of the hearing is to determine the fair market value of the real property on the date scheduled for the foreclosure sale. If the fair market value is greater than the sale priced, the homeowner will be entitled to receive an offset against a deficiency claim by the lender.

Being successful in winning a wrongful foreclosure suit in Texas may be difficult. Homeowners may have better luck with stopping the foreclosure process by obtaining a restraining order or by filing bankruptcy. The Texas homestead in bankruptcy gives homeowners an unlimited exemption to protect the equity in their home. State law requires that the property owner be a resident for at least 40 months prior to filing their bankruptcy petition. If you have been the victim of a wrongful foreclosure, you should immediately contact a foreclosure attorney for legal advice.

Wrongful Foreclosure Articles

Fool Me Twice: Bank of America Plays Hide And Seek Using Fannie Mae
by Francine Mckenna, 8/11/2011

Are you at risk of foreclosure and losing your home?

DA Wants Millions in Mortgage Fees by Jennifer Emily, 8/9/11

Mortgage / Foreclosure Information

Mortgage paperwork mess: Next housing shock?

What do you need to prove to collect damages for wrongful foreclosure in Texas?


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