A Guide to For Distressed Homeowners
August 30th, 2010
What is the foreclosure performance in Texas? It’s actually a bit different than what you may find in some other states. In Texas, there are two types of foreclosure proceedings. The first is known as the judicial foreclosure, which is normally referred to as in-court foreclosure. With this type, your loaner has to go through the court system in order to file a lawsuit and get a court order giving it the right to auction your home off to repay your defaulted mortgage. Unfortunately, this method is not the primary approach to foreclosing in Texas.
There is a general process that a foreclosure goes through:
1. Homeowner misses payments
2. Notice given to homeowner that foreclosure is in process
3. Time to cure debt
4. Court or other proceedings
5. Sheriff’s Sale
But how does all of this apply in Texas, which is considered the toughest foreclosure state in the nation
For instance, under Texas law, the lender has the right to require the homeowner to pay off the entire loan if payments are missed. In most states, the homeowner just has to pay off the past due amount.
Subsequently the notice is served on the homeowner, he has only 20 days to cure the dearth before the house goes into foreclosure. That’s the short period of time of any of the states in the US.
More common in Texas is the non-traditional foreclosure. If you have a power of sale clause in your deed of trust or mortgage, your lender can begin foreclosure proceedings without filing a lawsuit and obtaining a court order. To begin, your lender need only send you a letter, letting you know that you have 20 days to pay the amount you are in default on your mortgage loan. Once 20 days pass, your lender will send you another letter, letting you know that the full balance is now due. This is often referred to as loan acceleration. The letter will also let you know that an auction date has been set to sell your home.
After the 20 days are up, a notice is given to the court and to the homeowner that the property will be sold. The house tends to be sold at an auction sale near the courthouse. The majority of home loans in Texas area are constructed with a “power of sale” clause. So for the sake of this article, I will only discuss the foreclosure process of mortgages with the “power of sale” clause. This process is also known as the non-judicial process.
Foreclosure auctions take place on the first Tuesday of the month on the county courthouse steps. Your home will be sold at a public auction, going to the highest bidder. Your lending company may also bid on your home if it wishes. The highest bidder at the foreclosure auction receives title to the home, even if that does not cover the amount of the mortgage and/or secondary notes.
If the proceeds of the auction are not enough to cover the amount owed by the homeowner, he is notwithstanding responsible for making that payment to the lender. This is known as a Deficiency Judgment. If you later file using a Dallas bankrutpcy attorney, you can erase that deficiency .
Understanding foreclosures in Texas begins with knowing what the specific statues governing Lone State foreclosures are.
Now that you understand the foreclosure process in Texas, you see there’s no time to lose. If you are looking to stop Dallas foreclosure, you can fill out a short form and get solutions. Don’t be defensive – take the offense.
