If you’re facing a Dallas foreclosure or perhaps have already gone through one, it can be hard to know your next step. That’s why we put together this guide to help you understand what your options are and what you can do to stay in your house after you face a Dallas foreclosure.
Always open your letters from your lender and take their calls
The first and MOST important thing is to continue to communicate clearly, openly, and often with your bank before, during, and after the Dallas foreclosure process.
Why?
Because your lender is not the enemy here. It’s easy to vilify banks and lenders during this difficult time because you feel that they’re kicking you out of your house.
But breeding animosity won’t’ help anyone, and often will make things worse.
If you’ve already tried a short sale and you haven’t managed to move it, then your lender or bank is actually your best ally in the foreclosure fight.
Because fundamentally, banks and lenders are not in the real estate business. They have no interest in owning and selling your home, and would probably rather you stayed there so they could avoid the foreclosure process altogether.
So if you’re still working through the foreclosure process, make sure you’re talking regularly to your creditors.
The Dallas foreclosure process
Foreclosure always sounds like a single event but honestly, it’s more of a process. The official foreclosure timeframe for Texas, as in if you were the only one the whole state foreclosing and it was purchased right away, is about 60 days. But the average time it takes for this process to actually unfold is closer to 150 days.
Here’s how the Dallas foreclosure process works.
Let’s say you’ve missed a few payments. The bank will be sending you lots of letters and calling you to try and get their money.
Assuming that doesn’t happen, they’ll advance to the pre-foreclosure stage.
This is between 0 and 120 days since your last payment (e.g. 120 days of delinquency). During this time, your bank will likely try to pursue loss mitigation strategies and give you a chance to negotiate your way out of the hole. But assuming that fails, it progresses to the breach letter.
The breach letter is like a resignation letter or handing in your notice. It’s an official letter telling you that the bank is going to foreclose your home. There’s a series of requirements that the breach letter needs to contain and, if anything is missing, you can contest it later in court.
But this is essentially your official notice that your home is going to be foreclosed.
Now in Dallas, foreclosure is almost always nonjudicial, meaning that the bank doesn’t need to go to court in order to progress with the foreclosure. Then the bank sends out a notice of default and intent to accelerate, waits 20 days for it to ‘cure’ (e.g. sit for a bit), then sends out a notice of sale.
21 days later is the foreclosure date. Foreclosures are held the first Tuesday of every month.
And that’s it, essentially. Your house will be auctioned off or held by the bank. Naturally, even a quick sale at less than your mortgage value is better than foreclosing for both you and the bank, so often times the bank will be willing to work with you to avoid things getting to this point.
But even after this happens, you might not necessarily have to leave. Here are some strategies to keep you in the house, even if you don’t own it.
Ask if you can stay after the foreclosure
First, ask. After foreclosure and assuming the bank didn’t manage to sell it, it’s actually better for the bank to keep you in your house. Occupied houses sell for more, raise the value of the property and neighborhood, and are less of a target for vandalism and crime.
So if you just ask, your bank might be willing to let you stay on in an ad hoc guardian capacity.
Offer to rent it back
Even if you don’t own it, the new owners or the bank might be willing to rent it back to you. Again, it’s in the owner’s best interest, regardless of whether or not the owner is the bank, to have someone living there while they get their ducks in a row.
That’s why some people are willing to lease it back to you, especially short term. For example, if your property was bought by someone hoping to flip it, they might not have all the capital needed to renovate and sell right now. It’s better for them to generate at least some revenue from their investment in the meantime while they raise the money they need.
Go to court
Of course, the bank might be a bit sour on your relationship following the Dallas foreclosure, so they might not be overly willing to rent you the house. If that’s the case you can always take them to court.
There are, however, a few caveats with this. First, legal fees might end up costing you more in the long run. Second, because the foreclosure process is pretty straightforward in Dallas, it’s unlikely that there would have been a mistake or any illegal activity on behalf of the lender, so it’s unlikely you’ll keep your house. At most, this is a delaying tactic.
Just don’t leave
Of course, you bank might take months to get everything in order, or the new owner might not actually check out their property for a while. So while it’s NOT LEGAL and we do not recommend doing anything illegal, one option is to simply stay and basically squat in your old house.
Again this is NOT legal and is NOT a good idea, but it can keep you there for a few months longer while you assess and decide your next step.
Offer a move out bonus
And while we’re on the topic of staying past your due date, you can actually ask the back for a move out bonus. Basically, it’s a lump sum payment for agreeing to get out of the house when you say you will.
The reason the bank might go for this is that the time, effort, and cost of evicting someone from a property is extremely high. As they say, possession is nine-tenths of the law. To avoid the hassle, many banks will happily (or unhappily) pay you a fraction of what it costs to evict you just so that they can move on with their day.
Are you facing foreclosure and want to offload your house fast? Get in touch and see how we can help!