Understanding the foreclosure procedure from Texas is a significant part navigating your own home foreclosure.
Before we jump in…
Understanding the Foreclosure Process in Texas
What is foreclosure anyway?
Foreclosure is the legal process that lenders use to take back property securing a loan, normally after the borrower ceases making payments.
Foreclosure is not any fun. But just know that it is not the end of the world.
When you understand how foreclosure in Texas functions… it arms you with the knowledge to ensure to navigate it well and come out the other end as well as possible.
The Basic Stages of a Foreclosure
There are several stages that are important to any foreclosure procedure.
Foreclosure works in different ways in different states around the country.
The two ways different states use to foreclose upon a home are: judicial sale or power of sale.
Contact us by calling (210) 807-6567 or through our contact page
to have us walk you through the specific foreclosure procedure here in San Antonio.
In either situation, foreclosure generally does not go to court before 3-6 months of missed payments have elapsed. Usually (but not always), a lender will send out several notices that you’re in arrears — overdue or behind in your payment.
Under Judicial Foreclosure:
- Your mortgage lender must file suit with the court system.
- You will get a letter from the court demanding payment.
- Assuming that the loan is legitimate, you’ll have 30 days to bring payment to court to prevent foreclosure (and sometimes that could be extended).
- If you do not pay during the payment period, a judgment will be entered and the lender can request that your property be sold — usually through an auction.
Under Power of Sale (or Non-Judicial Foreclosure):
- The mortgage lender will serve you with papers demanding payment, and the courts aren’t required — even though the process might be subject to judicial review.
- Following the established waiting period, a deed of trust is drawn up and control of your house is assigned to a trustee.
- The trustee can then sell your house to the lender at a public auction (notice must be given).
Anybody who has an interest in the property has to be notified during either type of foreclosure.
For example, any banks or contractors with liens on a foreclosed property are entitled to collect from the proceedings of an auction.
What Happens After A Foreclosure Auction?
After a foreclosure is complete, the amount of the loan is paid off with all the sale proceeds.
Sometimes, in the event the sale of this property at auction is not enough to pay off the loan, a deficiency judgment could be issued against the borrower.
A deficiency judgment is where the lender gets a judgment against you, the debtor, for the remaining funds owed to the lender on the loan amount after the foreclosure sale.
Some states limit the amount owed in a deficiency judgment to the fair value of their home at the time of sale, though other states will permit the complete loan amount to be assessed against the borrower.
Here’s a fantastic resource that lists the state by state deficiency judgment laws, because every state is different.
Generally, it’s best to prevent a foreclosure auction altogether. Rather, call the bank up, or work with a respectable real estate company like Lone Star Real Estate Solutions LLC to help you negotiate discounts off the amount owed to avoid having to go through a foreclosure.
Experienced investors can assist you by negotiating directly with banks to decrease the amount you owe in a sale — or perhaps eliminate it, even if your house is worth less than you owe.
If you need to sell a house near San Antonio, we can help.
We buy houses in San Antonio Texas like yours from people who need to sell quickly.
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Another Foreclosure Resource For San Antonio Texas HomeOwners: