Falling behind on bills is surprisingly easy, but getting caught back up is much harder. This is especially true when it comes to large debts with big monthly payments, like mortgages. Once a homeowner in Texas misses a certain number of payments, he or she will enter a process called preforeclosure. This is the period of time to take action before permanently losing a home to foreclosure.
Lenders generally start the preforeclosure process when a homeowner is 90 days behind on his or her mortgage. The homeowner will then receive a notice of default, detailing the lender’s intent to pursue legal matters to collect on its unpaid debt. In other words, the lender is telling the homeowner that it is getting ready to start the foreclosure process.
It is important to understand that preforeclosure does not mean that losing one’s home is inevitable. In fact, this is usually the period of time during which homeowners and lenders work out agreements to avoid foreclosure altogether. Most lenders are more interested in recovering their debts, not necessarily in taking people’s homes. Foreclosure means that they are unlikely to ever recoup those costs.
There are several possible resolutions to foreclosure, including loan modifications, repayment plans and short sales. All of these options have both benefits and drawbacks, so it is important that Texas homeowners understand what is best for their unique situations. Working with an experienced attorney can be helpful for some people who are struggling to find the best possible solution during preforeclosure.