What is a Wrongful Foreclosure?
E.J. Simonsen | Aug 26, 2022
If your home is at risk of foreclosure, you're likely looking at all available options. Is there a way to pause or stop the foreclosure? How do I negotiate with the lender for more time? Is my home being wrongfully foreclosed?
Many Texas homeowners don't know the difference between a wrongful foreclosure process and a wrongful foreclosure. The best way to save your home is to prevent it from ever being foreclosed — full stop. One of the best ways to accomplish this is to file a lawsuit alleging that illegal or wrongful foreclosure processes are occurring before the foreclosure sale.
What about after the foreclosure sale? Can you save your home after it has been foreclosed? Yes, but it is difficult, as you must be able to prove that it was wrongfully foreclosed. So, how do you prove that it was wrongfully foreclosed? Let’s examine some of the grounds for a wrongful foreclosure case. In this article, we're going to talk about what wrongful foreclosure is and what grounds are required to prove wrongful foreclosure in Texas.
What is a Wrongful Foreclosure?
A wrongful foreclosure is any instance when a lender foreclosed on a home or property without the proper legal grounds. It can happen as a result of negligence, mistakes in the foreclosure process, or intentional misconduct.
No matter how it happened, it's important to know that Texas homeowners have rights. If you suspect your home is being wrongfully foreclosed or has been lost to a wrongful foreclosure, you can fight it. Here's what you need to know.
6 Key Signs of a Wrongful Foreclosure Process
As a homeowner, you're not expected to know every legal step of the Texas foreclosure process. That's where your attorney comes in. But, there are a few key signs that can point to a possible wrongful foreclosure process, which you can use to stop your home from getting to foreclosure in the first place:
- Your lender rejected or returned one or more of your mortgage payments.
- You entered a forbearance agreement, which your lender then refused to honor.
- Your home was foreclosed on early — either when it was still in forbearance or after you had entered into a repayment agreement with your lender.
- You received notices of issues with your escrow account.
- You made your monthly mortgage payments, but still received default notices.
- Your monthly payment changed unexpectedly and without explanation.
These six signs point to a potential wrongful foreclosure process, which means you may have grounds to stop the process with the help of your attorney. It's important to know that these aren't the only signs of wrongful foreclosure. If you suspect something was wrong with your home's foreclosure process, it's always best to contact an experienced foreclosure defense attorney as soon as possible.
What are the Grounds for a Wrongful Foreclosure Case in Texas?
In Texas, to have grounds for a wrongful foreclosure case, your attorney must typically prove one of these two things:
- That there was a defect in the foreclosure sale process. Maybe the lender failed to give you proper notice about the pending sale. Maybe you were on active duty or deployed with the US Military. Maybe your lender failed to get a court order when your loan type required one. No matter the reason, if some step of the foreclosure sale process was completed improperly or illegally, and the home was lost to a foreclosure sale, you have grounds for a wrongful foreclosure case.
- That the foreclosed property was sold for a grossly inadequate selling price. Also known as "chilling the sale," if a lender sells it for significantly less than what it's worth at the foreclosure sale, you may have grounds for wrongful foreclosure.
Either of these two situations is grounds to bring a wrongful foreclosure case in Texas. But, not every homeowner knows when one of these things has occurred. That's why it's important to be aware of the six signs mentioned above and to get in touch with a qualified attorney at the first sign of foul play.
Why Should I Contact a Foreclosure Defense Attorney?
A foreclosure defense attorney has the experience and the capability to get you the best possible outcome in your wrongful foreclosure case.
If your home has yet to be foreclosed on, it’s highly possible it can be saved. An attorney may be able to file a lawsuit with a temporary restraining order (TRO) and halt the foreclosure process. Your attorney can allege that for a variety of reasons it’s improper for you to be foreclosed, or even that the lender is proceeding along an illegal or wrongful foreclosure path.
If your home was foreclosed on, and you have evidence it was done wrongfully, your attorney can file a lawsuit pointing out the wrongful action. Even if your attorney can't recover your home, they may be able to recover monetary damages for you.
Foreclosure can be a financially devastating process. No homeowner deserves to be wrongfully foreclosed upon, especially because its effects can be long-lasting and far-reaching. Whether pursued for a remaining balance, paying taxes on forgiven debt, or dealing with the fallout on your credit report, you want to avoid a foreclosure if at all possible. An experienced foreclosure defense attorney can help you determine the best options before you.
If your home is facing foreclosure, don't wait. Get the help you need today. Contact the attorneys at The Lane Law Firm.