Guide to Prevent Foreclosure Process in Houston, Texas

Foreclosure begins when the property borrower fails to pay off the mortgage loans within the decided time in a contract. This may happen to any of your property, but in most cases, it is a house or a building.

Many think that the procedure when started, cannot be stopped. However, some ways still exist to prevent it even after being activated. It is possible to delay or stop this action, and one can use any ways to control their next step and avoid foreclosure of their property.

Here is the guide on how to stop foreclosure process in Houston.

Filing for Bankruptcy

The foreclosure procedure in Houston, Texas, takes not more than 41 days to close. People think they don’t have time, and before they know it, the process begins. If one wants to stop this action in their Houston house, the first step is to declare bankruptcy.

According to Federal Law in the city, a borrower must be 120 days delinquent on the mortgage loan before the procedure starts. One can also file for bankruptcy during this time. After these 120 days, when the clock starts ticking again toward the foreclosure, one can easily file for bankruptcy. This will automatically stop that action regardless of any deadlines. Bankruptcy prevents the lender from collecting any debt while the process of bankruptcy starts, providing a person the needed time.

Moreover, there are two ways of filing for bankruptcy in Houston. One can file either chapter 7 or chapter 13 bankruptcy. If you plan to keep the house, you can go for chapter 13 bankruptcy, and if you just want to buy some time and don’t want the house, you can easily go for chapter 7 bankruptcy.

Applying for Loan Modification

If one has an option to start fresh with their loan payments, one can apply for a loan modification. This will slow down the process automatically and give one time to think about your situation and find solutions.

A loan modification will delay the process as lenders are restricted from foreclosing the house while a loss-mitigation application is pending. After your modification is approved, the foreclosure will stop, and one can start fresh with their new payment plan.

In Houston, the general law of modification works if the application is received 37 days before the scheduled sale, and the lender has to stop the foreclosure of one’s house. Your lender will start again with your loan payment, and this time, if you fail, the process may start sooner.

Filing Lawsuit against Your Lender

According to the April 2022 report, the state law recorded 2,297 foreclosures in Texas, out of which more than 500 were in Houston.

If a person is confused about how to stop foreclosure process in Houston, they can also opt to file a lawsuit against the lender in Houston court. If one has already appeared before the judge, this tactic may not work as the court is about to make a ruling. You need to do this sooner and prove that your lender is not following the law or any circumstances where your lender is not acting according to law.

A good law firm will help you identify any loophole and guide you.

There has been a 13% rise in 2022 from 2021 in the zombie foreclosure rates in Houston, and it becomes difficult for house owners to save their houses; however, a good housing company can guide you with buying a home within your budget and closing the title needs too.