Bryan-College Station Real Estate Lawyers Outline the Steps in a Typical Foreclosure in Texas
Compared to most states, it is quick and simple for lenders to foreclose in Texas. The whole procedure can take about three months. Therefore, if you are facing foreclosure, it is crucial that you contact a Texas real estate lawyer quickly to advise you about your rights.
In Texas, there are two types of foreclosure: judicial foreclosure and non-judicial foreclosure. Non-judicial foreclosures are much more common than judicial foreclosures.
Lenders use non-judicial foreclosure when the mortgage or deed of trust includes a power of sale clause. A power of sale clause is a pre-approval by the borrower to sell the property to pay off the loan if the borrower defaults. Generally, a non-judicial foreclosure is carried out as follows:
- The lender mails the borrower a letter of demand, informing the borrower that the borrower has 20 days to pay the delinquent payments or foreclosure proceedings will begin.
- After the 20 days have expired, and at least 21 days prior to the foreclosure sale, the lender posts a notice of sale at the door of the county courthouse and files a foreclosure notice with the country clerk.
- At least 21 days before the sale, the lender mails a copy of the notice of sale by certified mail to the borrower at the borrower's last known address.
- The foreclosure sale is held between 10 a.m. and 4 p.m. on the first Tuesday of the month (regardless of holidays) usually on the county courthouse steps. The sale is a public auction with the property going to the highest bidder, who must pay in cash.
Lenders may also obtain deficiency judgments against borrowers. The judgment may be for the difference between the property's fair market value at the time of sale and the balance of the delinquent loan amount.
Texas is a non-right of redemption state, which means that you may not reclaim your property once the foreclosure sale has occurred. Therefore, it is crucial that you contact a Texas real estate lawyer quickly to learn your rights.
Lenders can use a judicial foreclosure when your mortgage or deed of trust does not include a “power of sale” clause. Judicial foreclosure, which is much less common than non-judicial foreclosure, involves filing a lawsuit to obtain a court order to foreclose. After the lender obtains a court order, the property is auctioned off to the highest bidder. A Texas real estate attorney can represent you in the judicial foreclosure.