What is the Foreclosure Process in Texas?

If you miss a few mortgage payments, your mortgage servicer will probably send a letter or two reminding you to get caught up, as well as call you to try to collect the payments. It can be easy to send the calls to voicemail and let those letters fall into the junk mail pile, but don’t ignore them. This is your opportunity to discuss loan mitigation options and try to discover an agreement like loan modification, a short sale, forbearance, or an updated payment plan that helps you avoid foreclosure. 

If you're not sure where to start after missing a few mortgage payments, it can be helpful to first understand how the Texas foreclosure process works. With that information in hand, you'll have a better picture of your options and how you can best take action to avoid foreclosure. 

Understanding the Two Types of Texas Foreclosure

Texas has two distinct foreclosure processes, judicial and non-judicial. 

Non-Judicial Foreclosure

The most common foreclosure process in Texas is non-judicial, which means the lender can foreclose without going to court, so long as the deed of trust contains a power of sale clause.

A power of sale clause is a paragraph in the deed of trust that authorizes the non-judicial foreclosure sale. All mortgage loans used to purchase a residential property contain this non-judicial power of sale clause. 

Judicial Foreclosure

If there is no power of sale clause, then a judicial foreclosure process is used. If the mortgage was refinanced into a a home equity loan, then the judicial process will always be used, which requires a judge's permission to foreclose.

The Texas Foreclosure Process in 3 Steps

Since non-judicial foreclosure is the most common in Texas, we'll cover the steps of that foreclosure process below. 

Step 1: Notice of Default and Intent to Accelerate

Texas law requires that the lender/servicer must send the borrower a notice of default and intent to accelerate by certified mail that provides at least 20 days to cure the default before notice of sale can be given. (The 30-day breach letter sent pursuant to the terms of the deed of trust can satisfy this requirement.) 

The notice is sent to the borrower’s last known address and must include the amount due and the date it must be paid.

Step 2: Notice of Sale

After the cure period has expired, and at least 21 days before the foreclosure sale, the lender/servicer then sends a notice of sale (via regular and certified mail) to each borrower who is obligated to pay the debt. 

The notice of sale will also be posted at the courthouse in the county in which the property is located and filed with the county clerk in the county in which the property is located.

The notice of sale must include the date, time, and location of the sale, as well as a disclosure geared toward military service members that they should notify the sender of the notice about their military status.

Step 3: The Foreclosure Sale

Texas foreclosure sales are held on the first Tuesday of each month between 10:00 a.m. and 4:00 p.m. They are typically held at the county courthouse but may be in another location as designated on the notice of sale. 

The foreclosure sale must begin no later than three hours after the time scheduled on the notice of sale. At the auction, the property will be sold to the highest bidder, which may be a third party or the foreclosing lender. 

While Texas has the nation’s best homestead protection laws, there is no guaranteed right to undue or redeem a property after a mortgage foreclosure. 

How Can You Avoid the Texas Foreclosure Process?

If you are a homeowner facing foreclosure, you need to take action fast. While Texas’s property laws are on your side, they need to be employed before the home is sold. The quicker you act, the more options you have. 

Whether your goal is to apply for a loan modification, sell your home through a short sale, or just gain some additional time. You need a foreclosure defense attorney who has the experience and knowledge to assist you in stopping the foreclosure and negotiating a resolution. 

The banks have attorneys on their side — so should you.

If you or someone you know is facing foreclosure, get in touch with the Lane Law Firm. Our foreclosure defense attorneys are here and ready to help.