When it comes to foreclosures, Texas generally follows non-judicial proceedings, as long as the deed contains a power of sale clause. The foreclosure process in Texas is a relatively quick process, usually around 6 months.
1. First Missed Payment
Though foreclosure action can be taken after the first missed payment, most lenders include a grace period for late payments. After 10-15 days, the lender will usually charge a late fee.
2. Second and Third Missed Payment
After the second and third month of missed payments, the borrower will most likely start receiving calls and letters reminding you to send in any late payments. Most mortgage servicers won’t take any legal action during this period but instead, try to keep the current mortgage-holder accountable to late payments.
3. Pre-Foreclosure Loss Mitigation Review Period
The mortgage servicer must legally wait a period of 120 days after the first missed payment before sending the first formal notice of foreclosure. If this 4-month mark is reached without payment, the lender will usually begin to file for the official foreclosure process.
4. Breach Letter
To begin the process, the lender is required to send a breach letter informing the borrower of delinquent payments. After you receive this letter, the borrower usually has approximately 20-30 days to cure the default or be foreclosed.
5. Notice of Sale
At least 21 days before the foreclosure sale, the lender will send a notice of sale. Usually, this letter is also posted to the county courthouse door and filed with the county clerk.
6. The Foreclosure Sale
At the time of the sale, a certified trustee will sell the property to the highest bidder at public auction. In Texas, these auctions take place on the first Tuesday of every month at the local county courthouse.
7. After the Sale
If the sale of the property doesn’t satisfy the loan amount, a deficiency judgment can be made against the borrower. Also, Texas has no statutory right of redemption after the foreclosure. Once a home has been foreclosed, it cannot be redeemed.
8. Don’t Do It Alone
If you feel like you are in danger of facing foreclosure, we can help! The foreclosure process can be brutal, and we don’t think you should go through it alone. A knowledgeable Hill Country REALTOR® can help guide you through the sale process quickly and painlessly, helping you to escape fees, debt, and financial loss.