How to Save Your Home From Foreclosure
By Robert Vanhemelrijck
If you live in the San Antonio (Bexar county or the surrounding counties) and your home is in foreclosure (or in danger of being in foreclosure), Attorney Robert Vanhemelrijck can help you save your home. Please beware of loan modification companies and mortgage companies promising to stop your home foreclosure. Many Texas homeowners have lost their homes to foreclosure while waiting for loan modifications.
Texas is a non-judicial foreclosure state. This means that a mortgage company does not have to go to court to foreclose on your home. Sadly, many Texas homeowners who have lost their homes, find out after the fact that their home is gone. There is often no warning. Unlike in many states, the foreclosure process is extremely fast in Texas. Because of this, it typically takes legal action to stop a foreclosure once it has begun.
The two ways to stop a foreclosure on a home in Texas are outlined below: Option 1 does not guarantee to stop a home foreclosure. Option 2 does guarantee that the bank can not foreclose on your home.
Option 1. A Loan Modification:
Texas is a non-judicial foreclosure state. In Texas, after a missed payment, the bank can sell your house in just 51 days. First, the bank sends the homeowner a notice of default. Thirty days later the bank sends a letter announcing that the sheriff’s sales is in 21 days. The process moves very quickly. Too quickly.
What if you are applying for a loan modification?
In Texas, during a loan modification, it’s as if there are parallel trains going down the tracks. While the Loan Modification train runs down the track, right beside it is the Foreclosure Train…but the Foreclosure Train runs faster…..
The Loan Modification Train runs slowly because it is very bureaucratic and the bank typically requires the homeowner to submit and re-submit paperwork many times.
Most homeowners think that the Foreclosure Train stops when they are on the Loan Modification Train, but it doesn’t!
Most people don’t know that when they are applying for a loan modification, their missed payments and late payments are being added to what is owed to the bank. And, if the mortgage is in default, the homeowner is being charged by the bank for the bank’s attorneys to foreclose on the home.
Further, the loan modification process can take from 3 -12 months to get an answer from the bank. As a result, homeowners that are not making full monthly payments (which is most in this situation) are actually incurring more debt. Often this debt becomes so large that after the homeowner gets their modification the new mortgage payment is higher than the original one.
Example: if it takes 1 year to get a loan modification and the bank will not accept payments during this time (which is usually the case) a $1,000 per month mortgage payment ($100,000 loan), if the bank were to grant a loan modification the bank would add $12,000 in missed mortgage payments, add late fees, and attorney costs, and then add that to the loan. The “arrearage” and fees/attorney costs could total $20,000. So, even if the bank lowers the interest rate substantially, because $120,000 is now owed versus $100,000, the home owner will be asked to pay more each month on their newly modified mortgage loan than they were paying originally!
Option 2: The Guaranteed to Save Your Home Option:
File Chapter 13. Filing a Chapter 13 immediately stops all foreclosure proceedings on your home. In addition, this option forces the bank to let you catch up on your back payments over 3 – 5 years. A Chapter 13 protects you from the bank adding late payment fees, non-payment fees, and additional attorney fees on top of what you owe them.
Also, we can still apply for a loan modification even after you exercise your guaranteed option of a chapter 13 in order to permanently lower your monthly mortgage payments. However, now you can pursue a loan modification without the risk of the bank taking your home and without additional fees being added to what you owe. Further, we will assist you as you apply for a loan modification once we have protected your house with a chapter 13.