UNDERSTANDING THE FORECLOSURE PROCESS IN TEXAS……
Understanding the foreclosure process in Texas is an important part of knowing what to do in case this stressful event ever happens to you.
Before we dig in…
What is a foreclosure anyway?
Foreclosure is the legal process that lenders use to take back property securing a loan, generally after the borrower defaults and begins missing payments.
Foreclosure is defintiely not a fun experience. It does not have to be the end of the world there are ways to avoid foreclosure and stop it once the process has begun.
When you take the time to learn and know exactly how foreclosure in Texas works… it arms you with the knowledge to make sure you handle the situation appropriately if it suprises you.
Here are a few of the Basic Stages of A Foreclosure
There’s a few stages that are important when analyzing the foreclosure process.
Most people do not know that foreclosure does work differently in different states.
There are two different ways states use to foreclose on a homeowner which are: judicial sale or power of sale.
Below is help with understanding the foreclosure process in Texas.
You can reach out to us by calling 469-209-5350 or find us through our contact page to have us walk you through the foreclosure process here locally in Dallas Fort Worth TX.
In either of these two scenarios, foreclosure typically doesn’t go to court until around 3-6 months of missed payments have passed. Usually (but not always), a lender will send out multiple notices that you are in arrears or behind in your payment.
Under Judicial Foreclosure:
- Your mortgage lender must file suit in the court system.
- You’ll get notice in the form of a letter from the court demanding payment.
- Assuming the loan is still valid, you’ll have around 30 days to bring payment to the court to avoid foreclosure (this time frame can sometimes the be extended).
- If you do not pay during the time of the payment period, a judgment will then be entered and the lender will a have the ability to request the sale of your property – this will then usually at auction.
- Once the property is sold, the sheriff serves an eviction notice and you will be forced to leave the property right away.
Under Power of Sale (or Non Judicial Foreclosure):
- The mortgage lender serves you with papers demanding payment promptly, and the courts are not required – even the process may be subject to judicial review.
- After the normal waiting period has passed, what is called a deed of trust is drawn up and the control of your property is then transferred over to a trustee.
- The trustee is able to sell your property for the lender at a public auction (however a notice must be given in advance).
Anyone who has a real claim or interest in the property must be notified during both types of foreclosure.
For example, if any contractor or bank with any kind of lien against a foreclosed home is entitled to collect from the proceedings of an auction.
What Happens After A Foreclosure Auction? Understanding the foreclosure process in Texas…
After a foreclosure has fully taken place, the loan amount is then paid off in full with the sale proceeds.
Sometimes, if the sale of the house at the auction isn’t enough to pay off the loan, what is called a deficiency judgment can be issued against the borrower.
A deficiency judgement is where the bank places a judgement against you personally, the borrower, for the left over funds that are owed to the bank on the loan amount after the foreclosure sale has taken place.
Some states will limit the debt owed in a deficiency judgment to a fair value of the property at the time of sale, while in many other states they will allow the full loan amount to be assessed against the borrower.
In general, it is best to avoid a foreclosure auction. Instead, we suggest you call the bank, or work with a reputable company like ours at Connor Buys Houses to help you negotiate a discount off the amount owed to avoid having go through foreclosure.
Most experienced investors are able to help you by directly negotiating with banks to lower the amount you owe in a sale – or even eraseit completely, even if your home is now worth less than you actually owe on it.
If you need to sell a property near Dallas Fort Worth, we are here to help you right now today.
We buy houses in Dallas Fort Worth TX just like yours from people who need to sell fast everyday.
Give us a call anytime (469) 209-5350 or
fill out the form on this website today! >>
Other Foreclosure Resources For Dallas Fort Worth TX HomeOwners: