Let’s be honest, foreclosure is a scary situation. But if you’re facing foreclosure in Houston, knowledge is power. Understanding the foreclosure process can help you navigate this difficult time and make the best decisions for yourself and your family.
Before we dive in…
Understanding the Foreclosure Process in Texas
What is foreclosure anyway?
Imagine this: you take out a loan to buy a house, and the house itself acts as collateral (security) for that loan. If you miss payments for a while, Foreclosure is the legal process the lender uses to reclaim that house. It’s a way for them to recoup their losses.
While foreclosure is a serious situation, it’s important not to panic. By understanding the process in Texas, you can make informed decisions and explore options to potentially avoid it altogether.
This knowledge empowers you to navigate this challenging time and come out on the other side as smoothly as possible.
Types of Foreclosures in Texas
There are a few stages that are important to any foreclosure process.
Foreclosure works differently in different states around the country.
The two ways Texas uses to foreclose upon a property are: judicial sale and non-judicial sale also known as “power of sale.” The most common foreclosure process used in Texas is non-judicial sale. This means that the lender can foreclosure without going to court, as long as the deed of trust contains a power of sale clause.
Simply put, a power of sale clause is a provision embedded in your deed of trust that grants the lender the authority to foreclose on your property without requiring court intervention. All mortgage loans used to purchase residential property contain this non-judicial power of sale clause.
Connect with us by calling (713) 635-9455 or through our contact page to have us walk you through the specific foreclosure process here locally in Houston.
Under Judicial Foreclosure:
- Your mortgage lender must file suit in the court system.
- You’ll get a letter from the court demanding payment.
- Assuming the loan is valid, you’ll have 30 days to bring payment to court to avoid foreclosure (and sometimes that can be extended).
- If you don’t pay during the payment period, a judgment will be entered and the lender can request the sale of your property – usually through an auction.
- Once the property is sold, the sheriff serves an eviction notice and forces you to immediately vacate the property.
Under Power of Sale (or Non-Judicial Foreclosure):
- The mortgage lender serves you with papers demanding payment, and the courts are not required – although the process may be subject to judicial review.
- After the established waiting period has elapsed, a deed of trust is drawn up and control of your property is transferred to a trustee.
- The trustee can then sell your property to the lender at a public auction (notice must be given).
Anyone who has an interest in the property must be notified during either type of foreclosure.
For example, any contractors or banks with liens against a foreclosed property are entitled to collect from the proceedings of an auction.
The Texas Foreclosure Timeline: What To Expect
Here’s a breakdown of the key stages you can expect, though keep in mind the exact timeline might differ depending on your specific situation.
1. Delinquency and Notices (3-6 months):
- Miss mortgage payments for several months (typically 3-6).
- You’ll receive delinquency notices from your lender informing you of missed payments and potential consequences.
- Don’t ignore these! It’s crucial to address them as soon as possible.
2. Default Notice and Opportunity to Cure (20+ days):
- The lender sends a formal Default Notice outlining the missed payments and demanding full repayment to avoid foreclosure.
- This notice typically includes a “cure period” (usually 20+ days) where you can bring your loan current to prevent foreclosure.
3. Notice of Sale (21+ days):
- If the cure period lapses without full payment, the lender files a Notice of Sale.
- This notice details the upcoming foreclosure auction date (typically at least 21 days away) and is:
- Mailed to you by certified mail.
- Posted publicly at the county courthouse.
- Filed with the county clerk.
4. Foreclosure Sale:
- The property is sold at a public auction on the designated date (usually the first Tuesday of the month).
- The highest bidder takes ownership, which could be the lender or another interested party.
We Can Help!
Even if you’re facing foreclosure, there are still options. Contact Good Faith Offers at (713) 635-9455 or visit our website to explore solutions and potentially avoid foreclosure altogether.
What Happens After A Foreclosure Auction?
After a foreclosure is complete, the loan amount is paid off with the sale proceeds.
Sometimes, if the sale of the property at auction isn’t enough to pay off the loan, a deficiency judgment can be issued against the borrower for the remaining balance.
A deficiency judgment is where the bank gets a judgment against you, the borrower, for the remaining funds owed to the bank on the loan amount after the foreclosure sale.
Some states limit the amount owed in a deficiency judgment to the fair value of the property at the time of sale, while other states will allow the full loan amount to be assessed against the borrower.
Here’s a great resource that lists the state by state deficiency judgment laws, since every state is different.
Avoid Foreclosure Stress – Sell Your House Fast!
Facing foreclosure can be overwhelming, but there’s a better solution. At Good Faith Offers, we can help you avoid the stress and uncertainty of foreclosure by offering a fast and hassle-free cash sale for your home.
Here’s how we can help:
- Cash Offer: Receive a guaranteed cash offer for your house, allowing you to quickly pay off any outstanding debts and move on to your next chapter.
- Flexible Closing: We can close on your timeline, whether you need a fast sale or some extra time to prepare.
- No Hassle, No Showings: Skip the hassle of listing your property and endless showings. We handle everything, so you can focus on what matters most.
- Avoid Foreclosure: Stop the foreclosure process in its tracks and regain control of your financial situation.
- We can also take over payments!
Don’t wait until it’s too late! Contact us today at (713) 635-9455 or visit our website to explore your options and get a fast cash offer for your home.
We buy houses in Houston Texas like yours from people who need to sell fast.
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Another Foreclosure Resource For Houston Texas HomeOwners: