If a borrower should ever default on a loan against their home such as
a mortgage or a home-equity loan, creditors may claim their home as payment
though a process known as
foreclosure. In the state of Texas, the process of foreclosure lasts around 160 days
and involves several steps. Our firm has detailed what happens from the
first time a homeowner misses a payment to eviction.
1. Missed payment: Borrowers who miss payments are often given a 10 to 15 day grace period
to make their payment before being assessed a late fee. This fee will
often be five percent of both the principal and interest of the late payment.
2. Multiple missed payments: Borrowers who miss more than one payment in a row will likely receive a
letter reminding them to catch up on their payments and attempt to collect.
Debtors should not ignore these letters or phone calls as they can be
provide a useful opportunity to negotiate an agreement and avoid foreclosure.
3. Breach letter: After a debtor has been more than 120 days delinquent on payments, lenders
in Texas may send a breach or demand letter to the debtor informing them
that their loan is in default and that judicial or nonjudicial foreclosure
may be sought. Most foreclosures in the state of Texas are do not require
a lender to go to court as long as the deed of trust has a “power
of sale clause,” or a section that details the lender’s right
to pursue nonjudicial foreclosure. This letter must include the borrower’s
default, what is needed to cure the default, a date by which this default
must be cured, and that failing to cure the default will result in acceleration
4. Notice of Default and Intent to Accelerate: Under Texas law, lenders must send borrowers a notice of default and intent
to accelerate. This notice must provide a minimum of 20 days to cure the
default before pursuing seizure and sale of the property.
5. Notice of Sale: If the cure period expires and the borrower has not cured the default,
the lender will inform the borrowers of their intent to sell the property.
This notice will be sent to each borrower who is responsible for the debt
and will include the date, time, and location of the sale. Notices of
sale are filed with the county clerk in the county in which the property
is located and are displayed on the door of the same county courthouse.
6. Foreclosure sale: The county courthouse holds foreclosure sales on the first Tuesday of every
month from 10 am to 4 pm. These sales take an auction format and foreclosed
properties are either sold to the highest bidder or reclaimed by the lender.
7. Deficiency judgments: If the sale price of the property is less than the total amount owed, a
lender can file a lawsuit against the debtor in pursuit of a deficiency
judgment to cover the difference. Debtors are granted a credit for the
difference between the market value of the property and the sale price
to be used towards covering this judgment.
8. Eviction: Borrowers must leave a property after it is sold or else eviction will
be sought. While some lenders may offer to pay tenants a certain amount
of money in exchange for their agreement to vacate the premises, others
may choose serve the tenants with a notice to leave within three days
and file an eviction lawsuit. The courts will often grant this judgement
and issue a writ of possession after five days have passed. The sheriff’s
department will issue tenants a 24-hour warning to evict before forcibly
removing them from the property.
Facing Foreclosure? Call (817) 727-4001
If you are behind on your mortgage or have already received a notice of
foreclosure on your property, it is vital you contact a knowledgeable
Fort Worth bankruptcy attorney from The Pritchard Law Firm as soon as possible to protect your rights.
With more than 45 years of experience, we are intimately familiar with
the process of foreclosure and can maximize your chances of being able
to keep your home.
Contact our office online or
request a free consultation today to get started.