Understanding the Foreclosure Process in Texas

Understanding the foreclosure process in Texas is an important part of navigating your own home foreclosure.

Understanding how the Foreclosure Process works in Texas

Foreclosure is the legal process that lenders use to take back property securing a loan, generally after the borrower stops making payments.

Foreclosure is no fun.  But just know that it’s not the end of the world.  You can stop your foreclosure.

When you know how foreclosure in Texas works, it arms you with the knowledge to make sure you navigate it well and come out the other end as well as possible.

The Basic Stages of A Foreclosure

There are a few stages that are important to any foreclosure process.

Foreclosure works differently in different states around the country.

The two ways different states use to foreclose upon a property are: judicial sale or power of sale.

Connect with us by calling (830) 308-7168 or through our contact page to have us walk you through the specific foreclosure process here locally in San Antonio.

Most of the time, the foreclosure process won’t start right away.  But once you are 90 days behind you’re not only destroying your credit, but the bank may start to foreclose.

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).
  • The funds from the sale pay off attorneys involved in the foreclosure, fees, mortgages, other liens (contractors, etc.), and if there is anything left you MIGHT get some money

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.  This is especially important as you can be left with little or nothing, even if you have equity in the home.

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.

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.  So walking away from the property doesn’t just destroy your credit and make it hard to find a new place to live, you may still be stuck with the tab for that mortgage.

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.

Generally, it’s best to avoid a foreclosure auction. Instead, call up the bank, or work with a reputable real estate firm like us at Rehab Brothers to help you negotiate discounts off the amount owed to avoid having to carry out a foreclosure.

Experienced investors can help you by negotiating directly with banks to lower the amount you owe in a sale – or even eliminate it, even if your home is worth less than you owe.

If you need to sell a property near San Antonio, we can help you.  Foreclosure doesn’t mean the end of the world, but it can be a nightmare for yourself, your finances, and your credit.  We don’t want you facing that uphill battle alone.  So if you find yourself in this situation, please get don’t feel overwhelmed.  Reach out to the Rehab Brothers so we can help you!

We buy houses in San Antonio Texas like yours from people who need to sell fast.

Give us a call anytime (830) 308-7168 or
fill out the form on this website today! >>

 

Another Foreclosure Resource For San Antonio Texas HomeOwners:

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