How Are Non-Judicial Foreclosures Handled in Texas?

 Posted on August 23, 2021 in Foreclosure

Families that experience financial difficulties may struggle to pay certain bills and expenses. In some cases, financial issues may cause a family to get behind on mortgage payments, and a lender may begin foreclosure proceedings. In Texas, lenders will usually use non-judicial foreclosure, meaning that a foreclosure can be completed without the need to go to court and receive approval from a judge. Homeowners will want to understand the procedures followed during this type of foreclosure, and by working with an attorney, they may be able to take steps to prevent the loss of their home.

The Non-Judicial Foreclosure Process

Most mortgages in Texas will use a deed of trust involving three parties: the lender, the borrower, and the trustee. The trustee will hold the title to the property, and the deed of trust will usually include a “power of sale” clause that allows the trustee to sell the home if the homeowner defaults on mortgage payments. This clause allows for a non-judicial foreclosure.

A lender can initiate the foreclosure process if a borrower is 120 days delinquent on mortgage payments. When a homeowner is in default, the lender may accelerate the loan and declare that the full amount is due. The lender will send the borrower a notice of default and intent to accelerate, and this notice must give the borrower at least 20 days to cure the default by paying the amount that is past due, as well as any late fees or penalties.

If the borrower is unable to cure the default, the lender can request that the trustee sell the property. The trustee will send a notice of sale to the homeowner, and this notice will also be filed with the county clerk and posted at the county courthouse. A notice of sale must be sent and filed at least 21 days before the date of the sale. A foreclosure sale is completed through an auction, and these auctions take place on the first Tuesday of each month at the county courthouse or another location stated in the notice of sale.

The lender may be the high bidder in a foreclosure auction, or another party may purchase the property. The original homeowner may vacate the home, or the new owner may initiate eviction proceedings to have the occupants forcibly removed. If the purchase price of the home was less than the amount the borrower owed on their mortgage, the lender may seek a deficiency judgment against the borrower and require them to repay the difference between the sale price and the total amount the borrower owed to the lender.

Contact Our San Antonio Foreclosure Defense Attorney

If you have defaulted on your mortgage and are facing a possible foreclosure, the Law Offices of Chance M. McGhee can help you act quickly to protect against the loss of your home. We will advise you on whether filing for bankruptcy may help you address this issue, or we can help you negotiate with your lender to modify your loan and determine how you can make affordable payments. To set up a free consultation and get legal help with debt-related issues, contact our Schertz, TX foreclosure defense lawyer at 210-342-3400.

Sources:

https://statutes.capitol.texas.gov/Docs/PR/htm/PR.51.htm

https://assets.recenter.tamu.edu/documents/articles/1786.pdf