Timeline:
60 Days
Redemption:
No
Deficiency
Judgments: Yes
Judicial
Foreclosure: Yes
Non-Judicial
Foreclosure: Yes
Security
Instruments: Deed of Trust, Mortgage
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Texas
foreclosure law allows lenders to follow either a Non-Judicial
or Judicial Foreclosure process. If the loan documents do not
contain a “power of sale” clause, the lender must use the Judicial
Foreclosure process. In this process, the lender sues the borrower
in court to obtain an order to foreclose.
If the
original loan documents contain a “power of sale” clause, then
the lender can use a Non-Judicial Foreclosure process. This
clause authorizes the lender to sell the property in the event
of the borrower defaulting. If the loan documents specify the
place, time, and terms of the sale, then those details will
be adhered to. |
To begin
the foreclosure process in Texas , the lender must send a letter
to the borrower demanding payment within twenty (20) days of
the amount delinquent. If the borrower can not cure the delinquency
within that period, the lender must record a notice of sale
with the county clerk. The notice must be recorded at least
twenty-one (21) days before the scheduled sale date. Copies
of the notice must be posted on the courthouse door and mailed
to the last known address of the borrower.
The
sale is conducted on the first Tuesday or each month, even if
the day is a legal holiday. The place of sale is the courthouse
steps in the county in which the property is located and is
conducted as a public auction. The lender may take title to
the property if there are no higher bids by canceling all or
part of the outstanding loan balance.
The
borrower in Texas does not have a right to redeem the property
after the sale date, and the lender may sue the borrower for
a deficiency judgment. The amount of the judgment is limited
to the difference between the fair market value or sale amount
and the loan balance due.
Texas Foreclosure Law