When homeowners are unable to make their mortgage payments, it is possible that the lender may move to foreclose on the property. In Texas, a mortgage servicer can start a foreclosure on behalf of a mortgagee if both parties have an agreement that says the mortgage servicer can service the mortgage. There must also be proper disclosure that contains the name and address of the mortgagee.
After the housing crash and Great Recession that started in 2008, many people in Texas lost their homes due to a foreclosure. However, a significant number of other individuals were able to hold onto their homes as a result of loan modifications and other breaks from both the government and private lenders, but many breaks are set to expire in 2016.
As Texas residents may know, while the rate of foreclosures may have dropped to earlier levels, the number of bank repossessions has gone up dramatically. According to RealtyTrac, a 66 percent increase in repossessions this year during the third quarter included over 123,000 properties returned to a bank in this three-month period.
Homeowners in Texas who are having financial problems are often worried about what will happen to their residence. In some cases, mortgage payments become overwhelming and there is concern that the bank may foreclose on the loan.
Texas residents may have noticed that there are not as many foreclosures on the housing market as there were during the recession. However, a significant percentage of real estate sales still involve foreclosures across the U.S.
Many people in Texas don't know that once they get a foreclosure notice in the mail, it could be several years before the bank repossesses their home. In some cases, banks change their minds about pursuing a foreclosure but fail to inform the homeowner. When a homeowner abandons their house because of an impending foreclosure, they could be unwittingly creating a 'zombie foreclosure."
Texas homeowners may be interested to know that although their home state isn't among the top 10 for foreclosures, the national averages are rising. According to statistics published in June 2015, one out of every 1,041 homes or housing units had undergone filings in the few preceding months. Analysts said that more bank actions to repossess homes and state-level attempts to rectify distressed properties contributed to the increases, resulting in foreclosure levels in May 2015 that were the highest in 19 months.
Many Texas homeowners who get behind on their mortgages and who have little hope of catching up initially attempt to sell their homes in the hope a sale will solve the problem. If the home does not immediately sell, however, they may be left trying to decide between whether to seek a short sale or instead allow the foreclosure process to happen.
Those who study home loans say that homeowners who took out a home equity line of credit during the housing boom could trigger a new wave of foreclosures. This is because the payments on those loans are about to increase significantly, and in some cases, homeowners are still underwater on their original mortgages. According to research conducted by RealtyTrac, the average HELOC payment will increase from $133 to $279.
Texas residents may not be aware of state laws that allow a homeowner to regain ownership of a home after it has been foreclosed. The process is called statutory redemption, and it allows mortgagors to reclaim their property within a limited period if they are able to repay what the property sold for during the foreclosure sale. The period is typically one year and the homeowner must pay a lawful rate of interest to the sale purchaser of the foreclosure.