Have you missed a few mortgage payments, and now you’re worried about what will happen next? Here’s a breakdown of the foreclosure process in Texas.
How quickly does foreclosure happen?
Texas has one of the fastest foreclosure processes in the country. It can be as quick as 60 days, whereas the US average is 720 days.
In Texas, both judicial and non-judicial foreclosures are allowed.
A judicial foreclosure entails filing a lawsuit to get a court order to foreclose.
However, most foreclosures in Texas are non-judicial, which are much quicker since they do not require court approval.
Foreclosure does not automatically start after one missed mortgage payment. Texas law states that lenders must wait until you are 120 days delinquent before sending an official written Notice of Default. The notice will allow you 20 days (some loans allow 30 days) to “reinstate” your loan, meaning you can catch up on your missed payments and prevent foreclosure.
Foreclosure notice and sale
If after the 30 days, you are unable to reinstate your loan or work out a plan with your lender, they will send a foreclosure notice, called a Notice of Trustee’s Sale. The lender must give you at least 21 days notice of the sale. The letter must include the date, time and location of the sale. This will give you an idea of how long you can stay in your home.
Foreclosure sales in Texas happen on the first Tuesday of each month between 10:00 am and 4:00 pm at the county courthouse.
After your home has been sold, it’s time for you to leave. It’s preferable to leave voluntarily — evictions will appear on your credit report. If you do not vacate the home, the owner will file an eviction notice, sometimes called a Notice to Quit, giving you three days to leave.
If you do not leave during this timeframe, the owner will serve you with an eviction lawsuit. Pursuing the lawsuit can extend the time you have in your home, however, it will compound the harm you’ve already done to your credit due to foreclosure. It will also impede your ability to rent or lease a home in the future.
Note that the state of Texas does not have a statutory right of redemption. Once your home is sold, you have no right to live there, nor do you have the right to attempt to redeem your home. Once your home is gone, it’s gone for good.
If the sale of your home was not enough to cover the full amount that you owed on your mortgage, your lender may come after you with a deficiency judgment. Some states have anti-deficiency laws, however, deficiency judgments are allowed in Texas. A deficiency judgment means that you must pay the lender the balance of what is still owed on your mortgage, even though you no longer own your home.
Another issue to consider is taxes. If your mortgage debt was forgiven in the foreclosure, you might actually owe taxes on the amount between how much the home sold for and what was still owed on your mortgage.
Finally, foreclosure is a nightmare for your credit. It puts a black mark on your credit report, which stays there for seven years. This means that it will be difficult, even impossible, to secure another loan for many years. Make an effort to slowly rebuild your credit with healthy financial habits.
Foreclosure is a stressful process that can be damaging to your finances and to your morale. Foreclosure should be seen as a last resort — there are ways to stop it.
If you are looking for options to stop foreclosure, consider selling your home for cash. Contact us at Keller Home Solutions today. We can help you to sell your home for a fresh start. We’re an Austin-based investor with local experience. We can offer you a fair market price on your home, all in cash and with a quick turnaround time.Tags: bankruptcy, credit score, foreclosure, Keller Home Solutions, post-foreclosure