How can you avoid a deficiency judgment in Texas?
If you are behind on payments or considering walking away from a house, make sure you know your rights and have a legal strategy to prevent a potential deficiency judgment. You should consult legal advice as decisions made around walking away from house debt can have long term ramifications for the debtor.
While it is good to get good legal advice, be careful about paying an attorney unnecessarily. You can prevent a deficiency judgment by being well informed, having a goal (such as avoiding foreclosure, minimizing damage to credit rating), and having a plan. The truth is that you can take care of your situation for free or at minimal costs to you.
If you’re broke, why would anyone to expect you to pay anything to fix your situation? Unfortunately, there are a lot of mortgage modification scam companies that require you to pay up front fees and then do nothing to help you. The same is true of attorneys who want to charge you high fees and recommend legal action that can be harmful to your credit. You can pay them for a potentially no results, or worse, a bad result.
Bankruptcy attorneys, for instance, may recommend filing bankruptcy to get the bank to cooperate with a mortgage modification. The truth is that you can negotiate a mortgage modification for FREE yourself. You either qualify or you don’t. Its simple math to your lender. Plus you can avoid having a bankruptcy on your record, which will harm your credit score substantially, and harm your chances to rent, should you be forced to vacate your property.
The best way to avoid a deficiency judgment in Texas is to call your lender, tell them about your situation with the mortgage, and ask about programs that you might qualify for to lower your payments – whether this be through a mortgage modification or refinance.
If you cannot qualify for these programs, you may want to consider selling your house. If there is not enough equity to pay off the liens in full, you may want to consider selling through a short sale, which is where the bank agrees to accept less than what is owed. While the short sale is being negotiated, it is much easier to write the contract as being “contingent upon a waiver of deficiency.” Most lenders might “hem and haw” at this, but eventually give in and go along with the deal. Make sure you have an excellent short sale negotiator on your side to make sure critical details like the “waiver of deficiency” is not inadvertently omitted from the contract.
In the case of a short sale negotiation, banks require a real estate agent to be involved because they want to make sure the property is getting maximum exposure to bring a high offer to minimize their loss. The best thing about hiring a real estate agent to handle the short sale for you is they get paid through a real estate commission, so there are no up front fees to you! The drawback is that a bad hire (as in an inexperienced negotiator) could cost you money, time, and sometimes your house! How can you weed out the good ones from the bad ones? Read more: How to interview and hire a short sale real estate agent who will get my short sale approved.
If you need help avoiding a home foreclosure in Texas, please contact us.
While it is good to get good legal advice, be careful about paying an attorney unnecessarily. You can prevent a deficiency judgment by being well informed, having a goal (such as avoiding foreclosure, minimizing damage to credit rating), and having a plan. The truth is that you can take care of your situation for free or at minimal costs to you.
If you’re broke, why would anyone to expect you to pay anything to fix your situation? Unfortunately, there are a lot of mortgage modification scam companies that require you to pay up front fees and then do nothing to help you. The same is true of attorneys who want to charge you high fees and recommend legal action that can be harmful to your credit. You can pay them for a potentially no results, or worse, a bad result.
Bankruptcy attorneys, for instance, may recommend filing bankruptcy to get the bank to cooperate with a mortgage modification. The truth is that you can negotiate a mortgage modification for FREE yourself. You either qualify or you don’t. Its simple math to your lender. Plus you can avoid having a bankruptcy on your record, which will harm your credit score substantially, and harm your chances to rent, should you be forced to vacate your property.
The best way to avoid a deficiency judgment in Texas is to call your lender, tell them about your situation with the mortgage, and ask about programs that you might qualify for to lower your payments – whether this be through a mortgage modification or refinance.
If you cannot qualify for these programs, you may want to consider selling your house. If there is not enough equity to pay off the liens in full, you may want to consider selling through a short sale, which is where the bank agrees to accept less than what is owed. While the short sale is being negotiated, it is much easier to write the contract as being “contingent upon a waiver of deficiency.” Most lenders might “hem and haw” at this, but eventually give in and go along with the deal. Make sure you have an excellent short sale negotiator on your side to make sure critical details like the “waiver of deficiency” is not inadvertently omitted from the contract.
In the case of a short sale negotiation, banks require a real estate agent to be involved because they want to make sure the property is getting maximum exposure to bring a high offer to minimize their loss. The best thing about hiring a real estate agent to handle the short sale for you is they get paid through a real estate commission, so there are no up front fees to you! The drawback is that a bad hire (as in an inexperienced negotiator) could cost you money, time, and sometimes your house! How can you weed out the good ones from the bad ones? Read more: How to interview and hire a short sale real estate agent who will get my short sale approved.
If you need help avoiding a home foreclosure in Texas, please contact us.
