Fighting Foreclosure: How One Homeowner Fought the Trustee For Time and Won!

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Caught up in Foreclosure and In Need of Help

A homeowner in Dallas contacted me in December and told me their lender had just filed to foreclose on their house and wanted to know if I could help them.

I met with them soon after and read the notice to foreclose. It was scheduled to go to the auction on February 6th, 2008. I asked the owners what they wanted to do and they told me they had wanted to stay but could not keep up with the payments. They had decided to sell the house but even though the house had over 20% equity, the chances of listing the house, finding a buyer and have it close before February 5th was remote.
They needed time to sell and the lender had said, “Enough.”

I gathered their paperwork together and told them I would see what I could do to help them and told them they should contact a Realtor and list the house as soon as they could.

Once I was home, I got on the Internet and looked the property up on the Central Appraisal District (Tax records). The legal notice of foreclosure in Texas must always list the legal description address for the property. I looked at the legal address of the house on the website and then checked the foreclosure notice. The Trustee (person appointed by the lender to conduct the foreclosure proceeding) had made a mistake on the legal description. The Lot & Block was Lot A, Block 9 of Rolling Hills Addition 2 and the Trustee had listed Lot A, Block 8 of Rolling Hills Addition 2. I contacted the homeowner and had them notify the Trustee that they made an error on the foreclosure notice and they planned to contest it if they did not delay the sale.

The foreclosure was pulled and the homeowners gained another month of time.

The owners had traffic on their house but had not received an offer. A few weeks later I saw the house was listed on the foreclosure list for the March 4th sale which meant the Trustee filed to foreclose again. The owners told me they had not been notified. Texas law requires that a homeowner be notified by mail no later than 21 days before the foreclosure auction date (in Texas it is the first Tuesday of the month). I had them contact the Trustee and he informed them that he had mailed it to them.

A few days later the owners got the letter but the envelope had the wrong address listed and the letter took extra time to deliver because of it. That is what I had thought anyway. The owners showed me the notice and the envelope. The actual letter had been dated February 8th but the postmark showed February 14th. The Trustee did not mail the letter until the 13th or the 14th. The notice has to be postmarked no later than 21 days before the next auction and the February 14 postmark on the owners’ envelope left only 19 days before the sale. The Trustee had messed up again and was forced to file to foreclose again.

foreclosuremailerror.jpg

The good news was the homeowners had found a buyer for their house. I made sure the buyer’s agent knew of the impending foreclosure sale so they could make sure everything was done in time so the house could close before the auction date.

The inspection on the house turned up a few issues that would need to be repaired before the lender would fund the sale. I became worried that the house would not close in time because of the delay for repairs. I asked the owners to show me the current foreclosure notice and studied it again. It looked like everything was correct and in order and as I was handing it back to the owner, I noticed the legal address and looked at it again. I asked to see the previous notices and went to the Appraisal District website.

I was in disbelief when I verified the Trustee had neglected to include “Addition 2” after the “Rolling Hills” on the legal description.

You guessed it. The owners contacted the Trustee and contested the notice. Because of the Trustee’s 3rd error, they will have to file to foreclose a 4th time but the owners now have nearly six weeks for their house to close and it is scheduled to close in less than 2 weeks.

I am hopeful that this article will help some people who may face foreclosure. Trustees are people and people do make mistakes.
I told the homeowners…

“If the lender is going to enforce the terms of their mortgage by holding them accountable, then they have the right to hold the lender and/or Trustee accountable for making errors in the foreclosure process.”

All of the filing and re-filing costs money and the Trustee passes those fee’s on to the lender who adds those fee’s to the balance owed on the mortgage. In other words, the homeowner is penalized and charged extra because of the errors made by the Trustee.

I would be interested to know if a homeowner can contest those extra fees and not have to pay them. Anyone know the answer to that?

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10 Comments

  1. You’re right, except they didn’t stand a change agains Jim Watkins, the post author. I accidentally posted the article as mine (and have since corrected it). Its great to see that he was such a help to those homeowners!

    Nice work Jim!

  2. You did an excellent job Jim. Went above and beyond. Its nice to see that these days. There is such a “everyone for themselves” attitude most of the time. I would venture to say that you made a friend for life….

    No wonder foreclosures take so long.

  3. Thanks for the comments guys (and gals).
    Honestly, I am surprised to see the positive responses because I had thought that the article was really dull when I sent it in.
    Since I am around foreclosures on a daily basis, instances like this seem routine for me. It really does feel good to be able to help people out like that too.
    Annie… Is that rustic looking log cabin on your site banner for sale???
    That is the most incredible looking house I have seen!
    -jim

  4. Interestingly, incorrect foreclosure filings have all kinds of repercussions. Here, Bank of America conducted foreclosure proceedings on the wrong house. A house which had been paid for in cash was “foreclosed” upon by B of A.

    Just how common are mistakes on foreclosure paperwork?

  5. I am surprised you received so much praise for helping your clients “game”
    the system with small inaccuracies that take “legal loopholes” to a whole
    new level…

    Imagine…. the lender actually held the mortgage holders accountable in
    meeting their contractual agreement?! You have got to be kidding me!!!!

    This is why they call it a contract…. Your signature to a contract means
    something… Your word and your committment in signing a contract
    matters…. and there is a price to be paid for failing to do so…
    Plain and Simple!!

    What you fail to mention in your article is that the foreclosure process
    does not begin for at least 3 months of missed mortgage payments… Tell
    me something, did this couple have any savings or game plan to meet their
    obligations if they lost their job??

    Having found myself in difficult personal financial circumstances in the past,
    I was determined to find solutions; some of them were: (the combination
    of such things got me through the worst and actually built back my savings
    after I succeeded in securing a second job…)

    A. Get a second job
    B. Get a third job if necessary … Most jobs are 9 to 5 Monday
    to Friday…. That leaves 4 additional hours each evening to
    work a job and the weekends to work more hours… Won’t kill
    you….(x’s two if both of you work a second/third job temporarily)
    C. Put your savings to use in order to
    make sure you do not miss a payment…
    D. Get a renter to help share your expenses
    E. Sell some of your personal jewelry and possessions in order
    to raise cash.

    The truth of the matter, is that if you find it difficult paying your mortgage… and
    both of you are working…. you should n e v e r h a v e b e e n q u a l i f i e d f o r
    h o m e o w n e r s h i p ….. in the first place… and if only one of you is working
    then it is time for the other to get a job….even if it’s a retail clerk in a department
    store or waiting tables in a local restaurant….preferably both….

    Secondly, if you find yourself missing 3 mortgage payments,
    there is definitely something wrong with your financial planning strategies… and
    chances are….you are not saving enough for the “rainy day” our parents described
    to us…

    We live in a world that continues to make excuses for irresponsible behavior
    and we find that those who get involved look to make the lender the “bad guy” …
    when in fact …. it is the individual (s) that signed the contract as adults and then proceeded
    to behave like children when it came time to committing themselves to their
    obligations….that are the offenders…

    When responsible individuals take on a mortgage, they generally have enough
    in savings for at least 6 to 12 months…. and in so doing, have enough smarts
    to begin to take action way before the foreclosure process begins…

    Finding cheap tricks to salvage a home when you have clearly demonstrated
    an inability to meet your obligations is not something to be applauded….

    • Hey D M, a little bitter about something? Your generalizations are really poor form, and come perilously close to thinly veiled bigotry. Had trouble with that forclosure property you thought was a killer deal? Forgot actual people lived there before tragedy hit them hard? Wow… maybe if people would stop “gaming” the real estate market then maybe the lenders would actually start acting like lenders instead of loan sharks. Many, many people have had their lives devastated by back-to-back recessions, and losing their homes as well is just horribly painful. Losing a few bucks on a bad investment, because of jumping on the REO bandwagon without doing homework, is just “par for the course.” Lenders and trustees are definitely cutting corners just to collect fees out of pure greed and they DO NOT CARE. The homeowners/borrowers need to protect themselves, and very few are uneducated or deadbeats. I would be more than happy to provide direct evidence of negligence and malfeasance on the part of a lender and trustee.

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