Understanding the Foreclosure Process in Texas

Facing foreclosure can be one of the most stressful experiences a homeowner can endure. Understanding the process, your rights, and your options can help you make informed decisions during this difficult time. This guide explains how foreclosure works in Texas and what you can do to protect your interests.

What is Foreclosure?

Foreclosure is the legal process that lenders use to take back property securing a loan, generally after the borrower stops making payments. It's the lender's way of recovering the balance owed on a defaulted loan by forcing the sale of the asset used as collateral.

Types of Foreclosure in Texas

Texas primarily uses non-judicial foreclosure, but both types exist:

1. Judicial Sale (Judicial Foreclosure)

Less common in Texas, this process involves:

• Lender filing a lawsuit in court
• Court proceedings to obtain judgment
• Court-supervised sale of the property

2. Power of Sale (Non-Judicial Foreclosure)

The most common type in Texas:

• No court involvement required
• Based on deed of trust provisions
• Faster process than judicial foreclosure
• Must follow specific legal requirements

The Basic Stages of a Texas Foreclosure

Understanding each stage helps you know where you stand and what options remain available.

Stage 1: Missed Payments (Day 1-90)

• First missed payment: Usually incurs late fee
• Second missed payment: Lender attempts contact
• Third missed payment: Serious collection efforts begin
• Your options: Still best time to negotiate with lender

Stage 2: Notice of Default (Day 91-120)

Under Texas law:

• Lender must send written notice of default
• You have at least 20 days to cure the default
• Notice must specify:
  • Amount owed
  • Steps to cure default
  • Consequences of non-payment

Stage 3: Notice of Sale (Day 120+)

If default isn't cured:

• Notice of Trustee Sale filed with county clerk
• Posted at courthouse at least 21 days before sale
• Sent to borrower via certified mail
• Published in newspaper (if required by deed)

Stage 4: Foreclosure Auction

Texas foreclosure auctions:

• Held first Tuesday of each month
• Conducted at county courthouse
• Between 10 AM and 4 PM
• Property sold to highest bidder
• Opening bid typically the loan balance

Stage 5: Post-Foreclosure

After the auction:

• New owner receives deed
• Former owner must vacate
• Eviction process begins if necessary
• Possible deficiency judgment

The Judicial Foreclosure Process

Though less common, judicial foreclosure in Texas follows these steps:

Court Filing

• Mortgage lender files suit in district court
• You're served with court papers
• You have opportunity to respond

Response Period

• Typically 30 days to respond to lawsuit
• Can raise defenses to foreclosure
• May request mediation or settlement conference

Court Proceedings

• If no response, default judgment entered
• If contested, case proceeds to trial
• Judge determines if foreclosure justified

Judgment and Sale

• Court orders foreclosure sale
• Sheriff conducts auction
• Similar to non-judicial sale process

The Non-Judicial Foreclosure Process

Most Texas foreclosures follow this faster track:

Deed of Trust Authority

• Based on power of sale clause
• Trustee handles sale process
• No court involvement needed
• Must follow statutory requirements

Acceleration

• Lender declares entire loan due
• Required before foreclosure
• Must provide proper notice
• Opportunity to reinstate loan

Trustee's Role

• Neutral third party
• Conducts foreclosure sale
• Transfers property to buyer
• Files necessary documents

After a Foreclosure Auction

Understanding what happens post-auction is crucial:

If Property Sells for Less Than Owed

• Deficiency judgment may be pursued
• Lender can sue for remaining balance
• You may owe difference between sale price and loan
• Judgment valid for 10 years in Texas

If Property Sells for More Than Owed

• Excess funds go to junior lienholders
• Any remainder goes to former owner
• Rare in current market conditions
• Must claim funds promptly

Redemption Rights

• Texas has no statutory redemption period
• Once sold at auction, sale is final
• Cannot reclaim property after sale
• Different from some other states

Your Rights During Foreclosure

Federal Protections

• RESPA requirements: Proper notice procedures
• FDCPA protections: From abusive collection practices
• Military service: Special protections under SCRA
• Bankruptcy options: Can temporarily halt foreclosure

Texas State Rights

• Right to proper notice
• Right to cure default before sale
• Right to surplus funds
• Protection from defective foreclosure procedures

Notice Requirements

Texas law requires:

• Written notice of default
• Minimum 20-day cure period
• 21-day notice before sale
• Proper posting and mailing procedures

Timeline Summary

Typical Texas Non-Judicial Foreclosure Timeline:

• Month 1-3: Missed payments, late notices
• Month 4: Notice of default sent
• Month 4-5: Cure period (minimum 20 days)
• Month 5: Notice of sale posted
• Month 6: Foreclosure auction

This can vary based on:

• Lender's policies
• Loan documents
• Borrower's response
• Legal requirements

Options to Avoid Foreclosure

Work with Your Lender

• Loan modification: Change loan terms
• Forbearance: Temporary payment reduction
• Repayment plan: Catch up over time
• Refinancing: New loan to pay off old

Alternative Solutions

• Short sale: Sell for less than owed
• Deed in lieu: Give property to lender
• Assumption: Someone takes over loan
• Bankruptcy: Chapter 7 or 13 protection

Sell Before Foreclosure

Benefits of selling pre-foreclosure:

• Avoid foreclosure on credit report
• Control the sale process
• Potentially keep some equity
• Choose your move-out date

Common Mistakes to Avoid

1. Ignoring the problem: Won't go away
2. Not opening mail: Missing important deadlines
3. Believing scams: Foreclosure rescue fraud is common
4. Waiting too long: Fewer options as time passes
5. Not seeking help: Free counseling available

Impact of Foreclosure

Credit Consequences

• Score drops 200-400 points
• Remains on report for 7 years
• Difficulty getting new loans
• Higher interest rates when available

Other Impacts

• Difficulty renting apartments
• Employment background checks
• Insurance rate increases
• Emotional and family stress

Getting Help

HUD-Approved Counseling

• Free foreclosure prevention counseling
• Help understanding options
• Assistance negotiating with lender
• Budgeting and financial planning

Legal Assistance

• Texas Legal Aid organizations
• Pro bono attorney programs
• Bar association referrals
• Law school clinics

Take Action Now

The most important thing to remember about foreclosure: the sooner you act, the more options you have. Don't wait until the last minute to explore your alternatives.

Recommendations

Generally, it's best to:

• Communicate with your lender early and often
• Explore all options before accepting foreclosure
• Get professional help from counselors or attorneys
• Consider selling to avoid foreclosure's consequences

Need Immediate Help?

If you're facing foreclosure in San Antonio, we can help. Gabe Buys Houses specializes in helping homeowners avoid foreclosure by purchasing properties quickly for cash. We can:

• Close before your auction date
• Pay off your mortgage
• Help you avoid foreclosure on your credit
• Provide cash for moving expenses

Don't let foreclosure happen to you. Call (210) 774-4400 today for a confidential consultation. We can often make an offer within 24 hours and close in as little as 7 days – stopping the foreclosure process and protecting your credit.