Foreclosure

The Foreclosure Process

When you buy a home, as a part of the mortgage contract you agree that if you fall behind on your monthly payment (default on the loan), the lender can sell the home at auction and apply the proceeds to your loan balance. Before the house goes to auction, the lender must follow the procedures found in federal and state law in a process called foreclosure.

After the expiration of federal and state waiting periods given to allow the homeowner time to catch up on arrearages or apply for a loss mitigation program (such as a mortgage modification), the lender can move forward with foreclosure by complying with state foreclosure laws.

A lender can use one of two types of foreclosure, depending on state law:

{Judicial {foreclosure|repossession}. All states {allow|enable|permit} the {lender|loan provider|lending institution} to {use|utilize|make use of} a “judicial” {foreclosure|repossession} {process|procedure} that {begins|starts} when the {bank|financial institution} {files|submits} {a lawsuit|a suit|a claim|a legal action} in court. The {homeowner|property owner|house owner|home owner} can {{respond|react} to|react to|reply to} {and|as well as|and also} {defend|protect|safeguard} the {suit|fit|match}. The {matter|issue} {will|will certainly} {proceed|continue} {through|with|via} the {litigation|lawsuits} {process|procedure}, {and|as well as|and also}, if the {bank|financial institution} wins, the court {will|will certainly} {order|purchase|buy|get} the {home|house|residence} {{sold|offered|marketed} at|cost} {auction|public auction}.|The {homeowner|property owner|house owner|home owner} can {respond|react} to {and|as well as|and also} {defend|protect|safeguard} the {suit|fit|match}. The {matter|issue} {will|will certainly} {proceed|continue} {through|with|via} the {litigation|lawsuits} {process|procedure}, {and|as well as|and also}, if the {bank|financial institution} wins, the court {will|will certainly} {order|purchase|buy|get} the {home|house|residence} {sold|offered|marketed} at {auction|public auction}.}
{Nonjudicial {foreclosure|repossession}. Some states {allow|enable|permit} {a lender|a loan provider|a lending institution} to {use|utilize|make use of} {a streamlined|a structured} “nonjudicial” {foreclosure|repossession} {procedure|treatment} that {{consists|is composed} of|includes|contains} {following|complying with|adhering to} {steps|actions} {outlined|described|detailed|laid out} in state {law|legislation|regulation}. {In {many|numerous|lots of|several} {cases|situations|instances}|Oftentimes|In most cases|In a lot of cases}, the {bank|financial institution} {will|will certainly} be {required|needed|called for} to {give|provide|offer} the {homeowner|property owner|house owner|home owner} time to bring the account {current|present|existing}. {Additionally|Furthermore|In addition}, the {lender|loan provider|lending institution} {must|should|needs to|has to} {notify|inform|alert} the {owner|proprietor} of the sale {date|day}, {and|as well as|and also}, {in some {cases|situations|instances}|sometimes|in many cases}, {publish|release} the sale {date|day} by {advertising|promoting|marketing} it in {a newspaper|a paper} or {posting|publishing|uploading} it in a public {place|location|area}. After {completing|finishing} the {steps|actions}, the {lender|loan provider|lending institution} is {free|totally free|complimentary|cost-free} to {sell|offer|market} the {home|house|residence} at {auction|public auction} without {first|very first|initial} {receiving|getting|obtaining} {approval|authorization} from the court.|In {many|numerous|lots of|several} {cases|situations|instances}, the {bank|financial institution} {will|will certainly} be {required|needed|called for} to {give|provide|offer} the {homeowner|property owner|house owner|home owner} time to bring the account {current|present|existing}. After {completing|finishing} the {steps|actions}, the {lender|loan provider|lending institution} is {free|totally free|complimentary|cost-free} to {sell|offer|market} the {home|house|residence} at {auction|public auction} without {first|very first|initial} {receiving|getting|obtaining} {approval|authorization} from the court.}
{{Filing|Declaring} for|Declare} {bankruptcy|insolvency|personal bankruptcy} {will|will certainly} {stop|quit} either {{type|kind} of|kind of|sort of} {foreclosure|repossession} {process|procedure} as long as the {foreclosure|repossession} sale hasn’t {occurred|happened|took place}. You can {{find|discover|locate} out|discover|learn|figure out} {more|even more} {about|regarding|concerning} the {foreclosure|repossession} {process|procedure} in your state in State Foreclosure Laws.

When the Automatic Stay Doesn’t Apply

Filing for Chapter 7 or 13 bankruptcy automatically triggers the stay. No additional action is required for the automatic stay to go into effect. (Learn more in Bankruptcy’s Automatic Stay.)

However, two exceptions to the automatic stay exist to prevent debtors from interfering with a creditor’s right to foreclose by filing and dismissing successive bankruptcy cases. Here are the rules.

Debtors who fall within the exceptions to the automatic stay can file a motion asking the bankruptcy court to impose the automatic stay and stop the foreclosure. To prevail, the debtor would need to prove by clear and convincing evidence (a relatively high standard) that the previous bankruptcy cases weren’t filed in bad faith.

The exceptions to the automatic stay for repeat or serial filers won’t apply if you initially filed under Chapter 7 bankruptcy but then moved to a Chapter 13 because the means test showed that your income was too high to qualify for Chapter 7.

Start Your Relief Process Today by Contacting a Texas Bankruptcy Attorney

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