In response to the economic crisis of the past year, Texas and the federal government have offered several programs designed to help keep people in their homes. Some of the most important of these have been moratoriums on evictions and foreclosures.
The moratoriums have been lifesavers for thousands of Texas residents. Many have been able to use the opportunity to find new employment or to otherwise recover their financial health. Unfortunately, many others have not been so lucky.
Texas lawmakers have continued to offer programs to help struggling residents. However, with the state, the nation and the world now crawling out of this crisis, the moratoriums and many other programs will be winding down in the coming months. These struggling individuals and their families may soon find themselves in danger of losing their homes.
If you find yourself in this situation, what are your options?
Statute-based defense strategies
Foreclosure is a legal process in which a mortgage lender takes possession of a property. Even in ordinary times, the government gives homeowners a fair amount of protection in this process – providing court hearings at which they can defend against foreclosure.
Some of the most common foreclosure defense strategies depend upon state and federal consumer protection laws. For example, in Texas, the Deceptive Trade Practices Act, or DTPA, gives consumers the right to file suit against businesses if they have been the victims of deceptive or unfair conduct. This protection applies to consumers in many circumstances – and may be applicable in some foreclosure cases, depending on the circumstances. If homeowners can show that they were deceived or treated unfairly, they may be able to alter the terms of their mortgage, or otherwise stop foreclosure.
In other cases, homeowners may be able to defend their homes by showing violations of the Truth in Lending Act and the Home Ownership and Equity Protection Act (HOEPA.) The Truth in Lending Act of 1968 is a federal law that protects consumers from certain abusive practices by lenders and creditors. In the 1990s, the act was amended to include HOEPA, which is specifically targeted at mortgage refinancing and home equity loans. There are several types of remedies available to homeowners who can show that lenders violated HOEPA. The most powerful of these – available only in cases where the mortgage is less than three years old – is to void the mortgage.
These are only a few of the strategies your real estate attorney can employ to defend your home against foreclosure. In a future post, we will examine some of the process-oriented defense strategies that an experienced legal advocate can use to support you in your case.