The Steps in a Typical Foreclosure in Texas

In Texas, "purchase money" mortgage lenders can foreclose on homes without filing a lawsuit, or "non-judicially." This means that for most homeowners, their property can be foreclosed upon rather quickly, within as little as two or three months, and without the mortgage lender having to first get permission from a court.

In many other states that are "judicial foreclosure" states, it can take many months, or even a year or longer, before a borrower can be put out of their home through foreclosure, because the lender must first obtain a judgment of foreclosure from a court. And the borrower in such a circumstance can file an answer and oppose the foreclosure in court.

But there are some exceptions. In Texas, home equity loans and home equity lines of credit, for example, can only be foreclosed by the lender first obtaining a court order. Also, ad valorem taxes ("property taxes") and homeowner associations can only foreclose by first filing a lawsuit and getting a judgment against a homeowner.

But for the usual "purchase money" mortgage, where you borrowed the money from the bank or mortgage company to purchase your home, the first step in the foreclosure process is when the lender sends you a "Notice of Intent to Accelerate" your loan, on 20 days' notice. What that means is, once the 20 days goes by, the lender will no longer accept one payment from you at a time. They will demand the entire amount due on the mortgage. They will no longer accept anything less.

After the loan is accelerated or called due, they must send you a "Notice of Trustee Sale" on 21 days' notice. In other words, they must give you 21 days notice that they intend to sell your home at the county courthouse steps (or wherever the designated place is in your county to conduct foreclosure sales). They only have to MAIL these notices, via certified mail, you do not have to RECEIVE them. In fact, it does no good for you to refuse the notices, or just not claim them. It is better to pick up the notices, so at least you know what the status of your foreclosure is.

If you do nothing to stop the foreclosure, on the date that the property is "posted" for foreclosure, which must be the 1st Tuesday of a given month, the property will be sold to the highest bidder. All bids must be in cash. If no one bids at least the amount of money due to the mortgage lender, the mortgage lender will bid a credit against what it owed. They may bid what you owe, or they could bid less for the property than what you owe. If that occurred, there could be a "deficiency" balance due. That is, you could lose your house, and still owe the bank money.

Once the foreclosure sale occurs, you no longer own the property. There is no "redemption" period for ordinary mortgage foreclosures in Texas. The new owner will likely deliver to you a 3 day notice to vacate. If you decline to move, they will likely file an eviction or "forcible entry and detainer" case against you. The Justice Court hears the case within 7-10 days, and if the J.P. determines that they foreclosure was valid, a "writ of possession" is issued to a sheriff or constable, to put you out of the property.

If you still decline to move, the sheriff or constable will likely appear with a moving company, who will pack up your things and put them in storage. I don't recommend that you let the process get this far, because it would then likely cost you 1000's of dollars to retrieve your things from the moving company. And if you cannot get them out, they are auctioned.

Again, don't let it get that far. If you want to save your home, negotiate with your mortgage company. Apply for a loan modification. If it is denied, appeal. If the appeal is denied, file for another loan modification. If you run out of options and you qualify, consult with an experienced bankruptcy attorney and consider filing chapter 13 bankruptcy, which can permit you 3-5 years to bring the loan current.

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