Austin Lawyer Tip: Texas Real Estate Foreclosure Litigation

There has been a tremendous amount of litigation relating to foreclosures. On each side of the fence there are competing interests. On the one side there are real estate companies, banks, lenders, and mortgage servicers. On the other side, are homeowners, families, and even children. There are very important issues on each side of the fence.

If you are looking at having your property foreclosed upon, you should first attempt to work out an agreement with your lender after falling behind in payments. Many mortgage lenders have various programs to get you current. Sometimes they are willing to move a delinquent payment to the end of the mortgage, or they may simply add the accrued interest to the loan balance and give you a new amortization schedule. If you have fallen behind, you should pursue all of your remedies with the lender prior to proceeding with any legal options. If the lender is unwilling or unable to help you get current, and they are not willing to grant you an extension or renewal, then another option is to seek to have the loan refinanced.

If the foreclosure is imminent and you are sure that you do not want to keep the home, you should first attempt to give the lender a "Deed in Lieu of Foreclosure." By doing this, you may be able to negotiate a release by the lender and avoid a costly deficiency lawsuit, whereby the lender could go after you for any losses they incur in taking back the property (in other words you could be liable for any resulting "deficiency" between the sales price at the foreclosure and the total amount of the debt).

Anther option if you are sure that you do not want to keep the home is to sell it prior to the foreclosure. By doing this, you may also avoid the possibility of a deficiency lawsuit by the lender against you. In this marketplace, this might be easier said than done.

If none of these options are available, and it looks like the lender is going to foreclose, then you may want to seek the advice of a bankruptcy attorney. With the bankruptcy, your prior payments may be able to be treated as an "arrearage" so that you can make payments on the old debt while staying current on the new or "post-petition" indebtedness.

However, what do you do if bankruptcy is not available to you for some reason? What if you believe that your lender has taken advantage of you? Are their any other options? The answer to these questions are "maybe." A commercial litigation attorney may be able to help. However, oftentimes, these options are very expensive. If you had this kind of money, you probably should have simply paid down the mortgage. Nevertheless, litigation attorneys will review all of the documentation and the foreclosure documents to ensure that the lender has met all of the requirements for a valid non-judicial foreclosure. Strict compliance is usually required.