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5 Foreclosure Myths Debunked

Posted By Allmand Law Firm, PLLC || 21-Mar-2016

Falling oil prices have meant trouble for some housing markets, including many areas in Texas. In fact, foreclosure activity has jumped more than 15 percent in the state in the last year. With so many Texans seeking relief during challenging economic times, we would like to take this opportunity to set the record straight on five common myths about foreclosure:

  1. Filing for bankruptcy stops a foreclosure. While bankruptcy may temporarily delay the foreclosure process, it is not a strategy for completely stopping it. Other loss mitigation options may be available if you contact your mortgage servicer in a timely manner.
  2. You’re not responsible for paying the bank’s legal fees. This, unfortunately, is not the case. If you read the fine print of your mortgage agreement, you will find that you are in fact responsible for the bank’s legal fees in the event if a foreclosure.
  3. The bank really wants your home back. Foreclosure can be a time consuming process for banks, and is often used as a last resort. Most banks will do everything possible to work things out with a homeowner in order to avoid foreclosure.
  4. Your involvement with the property is over once the bank takes it back. If the bank sells your home after foreclosure for less than what you owed on your mortgage, you will be held responsible for paying the difference, or “deficiency.” Furthermore, the bank can collect interest on that amount. A chapter 7 bankruptcy or deed in lieu of foreclosure may clear you of owing a deficiency, so contact Allmand Law Firm, PLLC to speak with a Dallas / Fort Worth bankruptcy attorney to talk about your options.
  5. Even if I pull together the money to stop a foreclosure, there is no way to stop it. Most states, including Texas, have laws that require foreclosure proceedings to be stopped if the homeowner has the money to cover all missed mortgage payments, late fees, and legal fees owed. The lender or servicer is required by law to send the borrower a notice of default and intent to accelerate, which gives the homeowner at least 20 days to cure the default before notice of sale can be given.

If you are behind on your mortgage payments, you have options. We invite you to contact Allmand Law Firm, PLLC to discuss your unique case and obtain advice tailored to your situation. When you choose to work with our firm, we may be able to put a stop to foreclosure proceedings, protect your credit history, protect you against potential tax obligations, and more.

Case evaluations are provided free of charge. Allmand Law Firm, PLLC serves Texas clients from two office locations in Dallas and Fort Worth.

Categories: Foreclosures
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