Many people are aware of the foreclosure problem plaguing the nation. But, not everyone understands what the problems with faulty documentation are or what to do when facing foreclosure themselves. Texas foreclosure proceedings move fast and are not supervised by judges, making the foreclosure problem even more troubling for Texas residents.
Judicial Foreclosure
In 23 states, foreclosure proceedings must be overseen by a judge. Before a lender can foreclose on a home, the homeowner must go to court and have the opportunity to review the lender's foreclosure documents. A judge must give approval before the homeowner is evicted.
Nonjudicial Foreclosure
Twenty-five other states use nonjudicial foreclosure. In nonjudicial foreclosure the homeowner and lender do not go to court and the paperwork is generally not reviewed by a judge. A judge is involved in only a few instances, such as when the homeowner is in bankruptcy or represented in foreclosure by a lawyer.
Texas Foreclosure Process
Texas has a very quick foreclosure process. Unlike other nonjudicial foreclosure states that allow homeowners to catch up on mortgage payments over a few months, homeowners in Texas have about six weeks to cure delinquent mortgages.
To begin foreclosure, the lender must send a letter to the homeowner, informing the owner that he or she is in default. The letter must state how much is owed and notify the owner that he or she has 20 days to make all past-due mortgage payments or foreclosure proceedings will be started.
If all payments are not received within 20 days of mailing the letter, the lender then posts notice of a foreclosure sale at the courthouse, records the notice with the county land office and mails the notice to the homeowner. If the homeowner does not cure the delinquent mortgage within the next three weeks, the home may be sold in a foreclosure sale.
When foreclosures are performed without judicial supervision, there is greater risk that faulty or fraudulent documents are used.
Faulty Mortgage Assignments
With mass securitization of mortgages, the deed of trust or mortgage note for a home may have been transferred many times but none of those transactions were recorded in the county land records. Consequently, the land records rarely reflect that the lender attempting to foreclose on the home owns the deed of trust and has the right to foreclose. Without the assistance of an attorney or the review of a judge, this problem may go unnoticed.
There are also problems with assignments or transfers of the deeds of trust. In some cases corporations that are now defunct, such as Lehman Brothers, are listed as the company that recently assigned the deed of trust to the lender foreclosing on the home. In others, the names of now-nonexistent companies are altered slightly. Further, some assignments are made after the foreclosure sale has occurred, according to Daily Finance.
Illegal Fees
In addition, the amount of money homeowners must pay to cure delinquent mortgages is often inflated with extra fees that the lender is not legally allowed to charge. Homeowners may have difficultly assessing which fees are legitimate and which are illegal, and the increased amounts make it even harder to pay the bill.
In nonjudicial foreclosure, homeowners may never see the documents lenders rely on to establish their foreclosure rights. Even if fraud or fault is discovered, there are few consequences for lenders because the documents are not filed in court and sworn as accurate. Also, enforcement of the laws lenders may be breaking is scant.
Texas foreclosure proceedings move swiftly and are especially susceptible to fraud, so promptly contact a knowledgeable foreclosure attorney if you are at risk of losing your home. An attorney experienced in foreclosure proceedings can spot improper documents or procedures and discuss your legal options.
