Wrongful Foreclosure Litigation
For most people, the home they live in is the most important investment they will ever make. That’s why a foreclosure on their home can be an extremely challenging experience to endure.
Not only can a foreclosure cause lasting damage to an individual’s financial standing, but it can also deprive them and their families of the place they have called home for years. Sadly, there are far too many situations in which lenders wrongfully foreclose on a home.
If you are facing a wrongful foreclosure, you may be uncertain about how to remedy the situation. Khirallah PLLC may be able to help.
What is Wrongful Foreclosure?
A foreclosure is when a borrower hasn’t made payments as required, and the lender takes back the property. A wrongful foreclosure is when a borrower has done as they promised, and the lender begins foreclosure proceedings anyway.
If your lender has threatened foreclosure, you may be unsure of where you stand. It can be especially challenging when you know you have fulfilled the terms of your mortgage every month. Ask yourself the following questions:
- Has the bank rejected or returned mortgage payment?
- Did you enter into a forbearance agreement, and now the bank is refusing to honor it?
- Were you foreclosed on while in forbearance or a repayment agreement?
- Have you received notices of issues with your escrow account?
- Are you making your monthly payments and still receiving default notices?
- Has your monthly payment amount changed without explanation?
- Has a lawsuit or foreclosure been filed against you on your Home Equity Loan?
- Do you believe you have been the victim of misconduct under the Deceptive Trade Practices Act (DTPA)?
Homeowners may be able to pursue wrongful foreclosure actions for many reasons, such as defects in the foreclosure notices or even fraud. If you suspect fraud, it is vital that you take action immediately.
If your lender has threatened to foreclose, contact an experienced real estate litigation attorney as soon as possible to get a clear picture of your options.
What Homeowners Can Do During The Foreclosure Process
Often, homeowners facing wrongful foreclosure will go back and forth with their lender through phone calls. These homeowners generally try to have the foreclosure stopped and believe the best way to do so is by communicating with the lender.
However, if the lender has decided to foreclose, they will usually do so regardless of the negotiations with the homeowner. In other words, you may be conversing with the lender daily, assuming that the problem will work itself out, and they may be proceeding with the foreclosure. The lender may take these actions even if you are not at fault in any way.
While it may be difficult to hear, do not trust anything that lenders say to you over the phone. The only way a lender will stop a foreclosure is through a signed writing that can be upheld in a court of law. If you have not signed anything with the lender, expect the foreclosure to move forward.
An experienced wrongful foreclosure attorney may be able to help correct the situation. It is, therefore, critical that you contact an attorney as soon as you are alerted to a possible foreclosure.
A Court Must Issue a TRO to Stop a Foreclosure Before It Happens
For a court to stop a foreclosure, the homeowner must file a lawsuit and request a temporary restraining order, or TRO. Often, homeowners believe that they can stop a wrongful foreclosure without filing a suit. While that may be true if talks with the lender prove successful, a court can only issue a TRO once you have already filed a lawsuit.
To file a lawsuit, you must have adequate grounds. If the foreclosure notices are defective, the lender has engaged in fraud, or you’ve been making prompt payments and were still foreclosed on, these are all adequate grounds for a lawsuit. Homeowners may not bring frivolous lawsuits to stop a foreclosure, but if your home is being wrongfully foreclosed on, you have grounds.
In a TRO, the homeowner must convince the court that they will suffer irreparable injury if the foreclosure is not stopped. The court may require the plaintiff to put up a bond to protect the financial rights of the lender.
If the court grants the TRO, it may then hold a preliminary injunction hearing. Here, the court will review documents from both sides to determine if the homeowner would prevail at trial. The court will also determine the balance between the injury to the homeowner and injury to the lender.
If a judge declines to issue a TRO or decides the preliminary injunction hearing in favor of the lender, the wrongful foreclosure may, unfortunately, proceed.
How To Succeed On A Wrongful Foreclosure Claim
To succeed on a wrongful foreclosure claim in Texas, the homeowner must show three specific elements:
- A defect in the foreclosure sale proceedings;
- A grossly inadequate selling price; and
- A causal connection between the defect and the grossly inadequate selling price.
In practice, this means that a foreclosure sale must take place before the plaintiff is able to succeed on a wrongful foreclosure action. Courts in Texas have found this to be a necessary element.
While this is not the ideal situation for a homeowner, there are still options for recovery available, even after a foreclosure sale is complete.
What Can Plaintiffs Recover In Wrongful Foreclosure Actions?
Under Texas law, plaintiffs in a wrongful foreclosure action may seek to recover through either (1) monetary damages or (2) the foreclosure sale being set aside.
In practice, it is incredibly difficult to reverse a foreclosure sale. If a third-party buyer has purchased the property through the sale, courts in Texas will protect the rights of that buyer. In the eyes of the law, as long as that buyer bought the property legally, a court will protect them.
There may be certain cases in which buyers can get their property back. An experienced wrongful foreclosure attorney can assess your case to see if that may be possible.
Otherwise, plaintiffs in a wrongful foreclosure action normally seek monetary damages.
Having your home foreclosed on is a devastating experience. Monetary damages may not make you whole, but under the law, they may be the best option to cover the financial burden you have faced.
Homeowners seeking damages after their lender foreclosed on their home must show that (1) an irregularity in the foreclosure sale (2) caused their damages. Generally, damages in a wrongful foreclosure action are the difference between the value of the property on the date of foreclosure and any remaining balance due on your loan.
If the homeowner can show fraud on the part of the lender, additional damages may be available, as well.
Don’t Try To Handle A Wrongful Foreclosure Action On Your Own
Because proving wrongful foreclosure is complex, the task is best undertaken by an experienced attorney who knows the applicable lending laws and has the resources to fully investigate documents relating to your loan. It’s also important to have an attorney with the experience to deal with big banks and other lenders.
Ms. Khirallah fights for homeowners facing the unjust or unlawful foreclosure of their homes through no fault of their own. Using her years of experience, she works diligently and aggressively to hold lenders responsible when their negligence or fraud seriously harms individuals and families.
Contact Khirallah PLLC
If you have been the victim of wrongful foreclosure, Ms. Khirallah knows how difficult it can be to face this situation on your own, and she works zealously on behalf of homeowners to see that lenders are not allowed to take advantage of them. She regularly represents borrowers in litigation arising from mortgage foreclosures, or the threat of a foreclosure, in connection with the origination or servicing of residential and commercial mortgages and home equity lines of credit.
Her prior experience in representing lenders and servicers gives her an advantageous perspective in successfully litigating these claims. If you are currently experiencing issues with large mortgage servicers like:
- GMAC Mortgage
- JPMorgan Chase
- Servis One, Inc. dba BSI Financial Services, Inc.
- Ocwen Financial Services, Inc.
- Bank of America
- Wells Fargo Bank, N.A.
- Nationstar Mortgage
- EverHome Mortgage
- Green Tree Servicing
- PNC Financial Services Group, Inc.
- FCI Lender Services, Inc.
- Trinity Financial Services
- Option One Mortgage
- American Home Mortgage Servicing, Inc.
Khirallah PLLC is uniquely qualified to manage these disputes in the best interest of homeowners.
Not all mortgages are the same and not every borrower hopes for the same result. Ms. Khirallah collaboratively works with her clients to determine an outcome that would be in their best interest and executes a creative and unique plan to achieve such an outcome.
If you are facing a wrongful foreclosure action, contact Khirallah PLLC at 214-484-4699 for a free consultation.