As part of several bills, Texas passed several new laws that began January 1st of this New Year. Covering everything from voting to veterans, the new laws are hoped to provide many Texas residents some relief in the coming year.
Although Texas hasn’t been on the hardest hit by the foreclosure crisis, it has had its fair share of negative impact on the local housing markets. Many Texas cities have seen significant drops in home values and the appearance of foreclosures in areas one would never expect to see them. Current Texas laws hold a non-judicial foreclosure stance, meaning that foreclosures do not require court action and can be pursued relatively easily by lenders. The biggest problem in non-judicial foreclosure states is that homeowners generally have less time to resolve their debts and may not be able to save their homes when actions are taken quickly by lenders.
However, one of about 20 new Texas laws sets out to change how certain entities handle foreclosures. Until now, Homeowners Associations were free to pursue foreclosure on a home even if the homeowner was working to resolve their late fees or payments. According to House Bill 1228, HOA’s will be required to follow a few rules. First, HOA’s will have to grant homeowners anywhere between three to 18 month to repay their late HOA dues, penalty fees or missed payments before foreclosure can be pursued. Second, HOA’s must allow the homeowner direct communication and access to negotiations even if they have secured an attorney or collection agent. Last, HOA’s will have to obtain a court order before pursuing foreclosure, proving that they assisted homeowners in good faith towards getting caught up.