The Foreclosure Process in Texas
Foreclosure is an ugly word with a lot of anxiety and fear. The word invokes a deep sense of loss and failure.
The Foreclosure process doesn’t happen overnight. It is a process that unfolds over time. If you do not stop it in time, your home will go to auction.
However, your obligation does not stop there.
Even if your home sells for less than what you owe, you are still responsible for the difference between what you owed on the mortgage loan and what your home sold at auction.
The Foreclosure Process
Here’s how it happens.
Phase #1: First Month Missed payment – 30 Days late
First Month Missed Payment: Your mortgage servicer will contact you by letter or phone.
There are a lot of reasons to miss a month. However, it is also easy to make missing these payments a habit.
If you miss a payment, pay it as fast as possible. If you have to pay weekly to get caught up, then do it.
Phase #2: Second Month Missed Payment – 60 Days Late
When you miss two months’ payments in a row, you are considered 60 days late.
At this point, expect your mortgage servicer to start calling you to find out why and offer solutions.
Don’t ignore the calls. That’s a sign to the mortgage servicer that you are a high-risk customer and to prepare for harsher measures.
Mortgage servicers and banks don’t want your house. They want to make money on interest on your loan –not foreclose on properties. Banks would rather work out a deal with you to get it fixed.
Or you could call a housing counselor to help.
Phase #3: Third Month Missed Payment – 90 Days Late
After the third missed payment in a row, you will receive a letter from your mortgage servicer stating the amount you are delinquent and that you have 30 days to bring your mortgage current. This is called a “Notice of Default”.
If you do not pay the specified amount or make arrangements by the given date, the mortgage servicer may begin foreclosure proceedings.
Mortgage servicers are unlikely to accept less than the total due without arrangements if you receive this letter.
You still have time to work something out with your mortgage servicer. A housing counselor can still help.
Texas law allows the borrower to block a nonjudicial foreclosure sale by “reinstating” the loan (paying the overdue amount) within 20 days after the mortgage servicer serves the notice of default by mail. (Tex. Prop. Code Ann. § 51.002(d)).
Since most deeds of trust provide additional time to reinstate, check your loan documents to determine if you have more time to complete a reinstatement.
Phase #4 – Notice to Accelerate – 120 Days Late
If you are 120 days or missed four months of payments in a row, expect a Notice to Accelerate.
“Notice to Accelerate” is mailed to you at the end of the time named in your “Notice of Default” letter.
When the 30 days end, your case will be referred to your mortgage servicer’s attorneys if you have not paid the whole amount or worked our arrangements.
You will incur all attorney fees as part of your delinquency.
In some cases, a housing counselor can still help you. But you must act quickly.
Phase #5 – Day of Foreclosure
Foreclosure sales are generally held on the first Tuesday of each month between 10:00 a.m. and 4:00 p.m. at the county courthouse.
The sale of your home begins at the time stated in the “Notice of Sale”, but no later than three hours after the time scheduled. (Tex. Prop. Code Ann. § 51.002).
At the sale, the mortgage servicer usually makes a credit bid. The mortgage servicer can bid up to the total amount owed, including fees and costs, or it may bid less.
In Texas, when the mortgage servicer is the high bidder at the sale but bids less than the total debt, it can get a deficiency judgment against the borrower.
But if a bidder offers more than you owe and is the highest bidder, and the sale results in excess proceeds—that is, money over and above what’s needed to pay off all the liens on your property—you’re entitled to that surplus money.
Texas law doesn’t give borrowers a statutory right of redemption after a foreclosure. Once your Texas home is sold at auction, you can’t redeem it.
All-In Hauling is dedicated to the well-being of our community. For us, that means more than picking up junk. It also means empowering our community with knowledge and awareness of the facts.
We hope you remain part of our growing community for a long time. However, if you are leaving our community, please call us to help with your moving cleanup.
Call us today at (936) 445-8159.