Author's note - this article is specific to Texas law only. Please consult an attorney in your state for state specific advice.
I successfully challenged three Texas wrongful foreclosures in 2011, so with 2012 upon us, and a number of wrongful foreclosure cases making their way through the courts, let's take a look at three common elements to a successful borrower challenge to a wrongful foreclosure.
1. Were you in the process of a loan modification with your lender?
What we discovered in 2011 is that the law firms retained by the lender to foreclose, does not read or subscribe to the lender servicing notes. The net effect is that they do not realize that you have an agreement with the lender on a modification. You may have even had money direct drafted by the lender. You may even have a confirmation number from the lender. This all means that the lender broke its agreement with you not to foreclosure. This adds a substantial boost to your case, adding claims beyond the normal wrongful foreclosure claims - Texas Deceptive Trade Practice Act claims and breach of contract claims.
2. Do you have substantial equity in your home? If so, you're motivated to get that modification completed - you have notes of conversations with servicing agents; you may have confirmation numbers, maybe even a draft of the agreement. But the law firm handling the foreclosure does not speak with the servicing agents and they apparently don't read the notes - so they foreclose anyway and you have no idea that happened until you get a letter from a third party buyer. The third party buyer wants you out of the house so they can flip the home and realize a nice profit - your equity!
3. Have you made a complaint to the lender? Was it assigned to a wholly owned service affiliate of the law firm handling the foreclosure? The law firms handling foreclosures have messed up so many cases, and I do mean many, that they are now using their own service company to handle the volume of call post foreclosure. They know there is a likelihood that they messed up and this is their crisis response.
Remember that Texas law favors the lender on almost every issue. So the fact that you had a modification going with the lender now places you on an even level with the lender on the issue of notice - you may not have received notice since you were in the middle of a modification.
Your deed of trust makes you a tenant at sufferance of the third party buyer - you have to leave when they give you notice. However, if you throw a wrongful foreclosure claim in their face and tell them you will tie up title to the property via a notice of lis pendens while you litigate, they may decide to work out a deal with you. The notice of lis pendens give the world notice of your title claim, making it difficult for the third party buyer to obtain title insurance on their re-sale.
Here are some other small things for your checklist -
1. Did you assume your mortgage? Has the lender been dealing with you on the loan in the past? Did the law firm give you notice?
2. How many properties has the third party buyer purchased from your lender? Question their business practices.
3. Document all conversations with a lender on a modification agreement. Your conversations should be included in the lender's notes, but this is independent proof to give to the lender and the third party buyer.
4. Check out your insurance situation once you figure out that you lost title to your home, you're now a tenant.
5. Finally, really consider filing bankruptcy to buy time on your modification, of course this presupposes that you know your modification efforts are in vain.
San Antonio attorney Martin Cantu invites you to visit his website, http://cantulegal.com/, for more information on how to obtain the legal help you need.
(c) Copyright Martin Cantu - All rights reserved.
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