Texas foreclosure laws provide lenders with options for both judicial and non-judicial foreclosure proceedings in the event that a mortgage goes into default.
Most foreclosures in Texas are non-judicial. In a non-judicial foreclosure, the borrower has signed a power of sale clause, which allows the lender pre-authorization to foreclose in the event of a default. If the power of sale clause stipulates the time, place, and terms of the sale, it must be followed exactly. If the clause does not state the terms, then Texas foreclosure law outlines the procedure to be followed.
If the mortgage contract does not include a power of sale stipulation or clause, then the lender must seek a judicial foreclosure. To receive a judicial foreclosure, Texas foreclosure law requires the lender to sue the borrower in court to obtain a court order authorizing the foreclosure.
Before the official foreclosure process can begin, the lender is required to mail the borrower a letter of demand. This letter requires the lender to demand payment for all past-due amounts from the borrower within 20 days.
Under Texas foreclosure law, if the borrower is unable to correct the default within 20 days, the lender is required to file a notice of sale with the county clerk in the county where the property is located. In addition, a copy must be posted on the courthouse door and an additional copy must be mailed to the borrower at their last known address. This must be done at least 21 days in advance of the sale date for the property.
The sale itself is to be held on the first Tuesday of the month. This applies even if the first Tuesday is a legal holiday. The sale is a public auction that allows anyone to bid, including the lender by canceling all or a portion of the outstanding mortgage balance. In the event that there are no other bidders, the lender will take title of the property.
Lenders under Texas foreclosure law are allowed to sue for a deficiency judgment; however, this amount is limited to the difference between the sale amount (or fair market value, if the borrower presents evidence of that) and the amount due on the mortgage loan.
Whatever your foreclosure situation is time is against you. The sooner you discover your options, the easier it may be to stop your foreclosure. The lawyers at Bailey & Galyen are experienced and successful in foreclosure laws. Contact us today for an evaluation of your case.
