How Many Missed Payments Before Foreclosure In Texas
Typically the foreclosure process begins only after a certain number of missed payments. So, its okay to have a late payment, but that does flag your loan so that they keep an eye on it.
Texas is bound by federal law that stipulates a borrower must be 120 days delinquent on a mortgage loan before the foreclosure process can begin. The manner in which most mortgages are structured means that four mortgage payments will likely be missed before a lender will begin the foreclosure process.
Don’t Ignore The Problem
Many homeowners want to ignore the financial issues theyre experiencing. Unfortunately, thats not the best way to handle a foreclosure. Once a homeowner accepts theyre in financial trouble, they can focus their efforts on other aspects of the situation. Homeowners need as much help as possible to avoid the foreclosure process.
Deficiency Judgment: You Might Owe Money After A Nonjudicial Foreclosure
A bank can get a deficiency judgment against the borrower for any outstanding mortgage balance that the borrower owes after the foreclosure sale. In Texas, the bank has two years to sue the nonjudicially-foreclosed owner for the deficiency in a separate lawsuit. If the court determines that the fair market value of the home is greater than the foreclosure sale price, the borrower is entitled to an offset against the deficiency. .
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Deficiency Judgments Following The Sale In Texas
Sometimes, a foreclosure sale doesn’t bring in enough money to pay off the full amount owed on the loan. The difference between the sale price and the total debt is called a “deficiency balance.” Many states allow the lender to get a personal judgment, called a “deficiency judgment,” for this amount against the borrower.
In Texas, to get a deficiency judgment after a nonjudicial foreclosure, the lender must file a lawsuit within two years after the foreclosure sale. You can ask the court to determine the property’s fair market value. If the court says that the fair market value is more than the foreclosure sale price, you’re entitled to an offset against the deficiency. .
What Does A Foreclosure Timeline Look Like In Texas
The first step in the foreclosure timeline means you will likely get a letter from your lender. It is what is called a notice of default however, some mortgage companies may call it a demand letter. If you get a letter, stay calm. By law, you must be given 20 days to make right the default amount. The lender also may extend the time to pay, abiding by the investor/insurer guidelines that were agreed to when you signed the mortgage loan.
If you have not had the opportunity, it may be best to contact HUD, FHA, or a company that offers free solutions to your mortgage problems. Save My Texas Home services are always free! You should not have to pay to get advice that will help you keep your house. You can call us at 512.271.5044 or use the contact form, and well get back to you with steps you can take right now!
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What Are The Differences Of Notice Of Default And Foreclosure
It is important to remember that a Notice of Default is not the same as a foreclosure.
A Notice of Default is an important first step in the foreclosure process and is often referred to as a period of reinstatement. This notice informs the borrower that the bank is ready to actively seek remedy if the defaulted portion of the mortgage loan is not made current.
Once a foreclosure begins, the bank or lender takes possession of the home with the intent to sell the property to recoup the unpaid mortgage balance owed by the borrower.
A foreclosure often results in the lender losing money on the deal, so they would much rather allow you to become current on the loan or sell the property yourself than having to go through auction.
What Is The Difference Between Foreclosure And Default
After two payments go unpaid, the borrower’s situation becomes more challenging and the lender will increase efforts to make contact. The worst-case scenario for a homeowner who has defaulted on a mortgage is foreclosure, a legal process that results in a homeowner’s rights to a property being eliminated.
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Can I Stay In My Home During Foreclosure
You do not have to move out on the sale date. If you are still living in the home after a foreclosure, the new owner will have to evict you. Youll get a notice to vacate before an eviction is filed. Some lenders will pay moving expenses in order to avoid the time and expense of an eviction proceeding .
What Are The Stages Of Foreclosure
1. Notice of Default A lender is required by law to send a written notice that allows you 20 days to pay the full amount past due in order to bring the loan current. Other types of loans may have a slightly different time frame, such as VA loans and FHA loans.
2. Notice of Sale Once the lender has decided to push forward with the foreclosure, they will need to set an auction date. The notice of sale is sent in order to notify you that an auction is to take place. It must be mailed 21 days prior to the auction, and the notice is also posted in the courthouse and filed with the county clerk.
3. Foreclosure Sale – Finally, the auction will take place at the county courthouse on the first Tuesday of each month . Texas does not have a right of redemption for non-tax related foreclosures, so once the auction takes place you are not able to buy back the property.
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Redeeming The Property Before The Sale
One way to stop a foreclosure is by “redeeming” the property. To redeem, you have to pay off the full amount of the loan before the foreclosure sale.
Some states also provide foreclosed borrowers with a redemption period after the foreclosure sale, during which they can buy back the home. However, Texas law doesn’t give borrowers a statutory right of redemption after a foreclosure. Once your Texas home has been foreclosed, you can’t redeem it.
Is Texas A Judicial Foreclosure State
The majority of foreclosures in Texas are executed through what is known as the non-judicial process. This means there is no need for the lender or borrower to appear in court. This option is available to the lender when a mortgage deed contains a Power of Sale clause.
What happens in a non-judicial foreclosure is that a lender can immediately start the foreclosure process without requiring a court appearance, which will significantly speed up the process.
Attorney Amy Loftsgordon explains that a Power of Sale clause is a pre-authorization on the part of the borrower that allows the lender to sell the property to recoup the balance owed if a borrower defaults on the mortgage loan. This power to sell the property can be executed by a lender or a trustee representing the interests of a lender.
When no Power of Sale clause exists in a mortgage deed, it is then necessary for a lender to file a lawsuit in hopes of obtaining a court order that will initiate the foreclosure process. Once the order is granted, it is commonplace for the property to be auctioned off to the highest bidder. This type of foreclosure is referred to as judicial foreclosure and is the second of the two types of foreclosures allowed in Texas.
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How Can I Prevent Foreclosure
Talk with your lender about a payment plan, a temporary forbearance, or a loan modification. Pay what you can. If your payments are not accepted, save them until you can pay in full. For free foreclosure prevention counseling, contact the HOPE Hotline at 888-995-HOPE or visit 995Hope. The earlier you apply for assistance, the more rights and options you will have.
Right To Reinstate Before A Foreclosure Sale In Texas
“Reinstating” is when a borrower pays the overdue amount, plus fees and costs, to bring the loan current and stop a foreclosure. In Texas, you get the right to reinstate the loan within 20 days after the servicer serves the Notice of Default and Intent to Accelerate. ).
The terms of the deed of trust that you signed when you took out the loan might also provide you with additional time to complete a reinstatement before the sale happens. Check your loan documents for details.
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Texas Foreclosure Process And Timeline
The Texas foreclosure process has roughly 160 days from start to finish until a home goes into auction, so knowing where you stand can help you decide what might be the next best course of action.
Foreclosure is awful, to say the least.
Theres a wide range of emotions that you experience when facing foreclosure, including both anger and sadness.
Thinking about how much money youve already put into the mortgage, only for it all to potentially go to waste, and also the helplessness you may feel knowing that theres a possibility that you and your family have to pick up and move somewhere.
While its challenging to figure out the solution to a pending foreclosure, its important to know how that process works and how long you have to figure out a solution before the home gets included in the auction list.
Lets start with what the foreclosure process looks like for Texas.
What we’ll cover:
Can You Stop Foreclosure By Paying The Past Due Amount
Lenders in Texas are required to extend a 20 day grace period to borrowers once a notice of default has been issued.
This period is often referred to as the pre-foreclosure period and during this time a borrower can halt the foreclosure process by paying all past due mortgage notes and any late fees that have been added to this balance.
The time it takes to foreclosure after notice of default can vary, but it is typically around 60 days.
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Lets Face It Foreclosure Just Sucks
No one ever expects to be in this position, but bad things happen to good people. Its normal during such a difficult time to feel confused, embarrassed, and even scared. Youre probably worried how a foreclosure will affect your credit and if youll be able to buy another house or even another car with a foreclosure on your credit report. You may even be wondering where you and your family are going to live. Or if you can even afford to move.
The uncertainties created by foreclosure are stressful, disheartening, and can be overwhelming. Sometimes the uncertainly that comes with not knowing what to expect can be worse than actually knowing whats going to happen. Thats exactly why we put together this guide to help homeowners navigate the foreclosure process in Texas. The worst thing you can do is to ignore the problem and get caught by surprise when your house is sold at auction. By knowing what youre up against, you can take steps to regain control of your life. The bottom line is that you dont have to lose your house, so lets take a deeper dive and see what options you have.
How Long Does It Take To Foreclose A House In Texas
A foreclosure is not a singular event that takes place once you are unable to make monthly mortgage payments. Instead, foreclosure is a series of steps in a relatively complex process.
If you are behind in your payments or struggling to pay your mortgage each month, it may be helpful to have a complete understanding of the steps that make up the foreclosure process.
It will also benefit you to arm yourself with this knowledge as early in the process as possible. Jeff Davidson, of Jeff Davidson Law Firm, explains that, on average, it takes 159 days to complete a foreclosure in Texas.
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The Danger Of Foreclosure
Foreclosure is usually the result of some financial stress, either from losing a job, medical bills, or some other strain that inhibits you from making mortgage payments.
Every year, 1 out of 200 homes goes through foreclosure, so its a lot more common that you might think.
The danger of letting your home go into foreclosure is that your credit becomes tarnished for a minimum of 7 years, making it very difficult to finance another house or to get other kinds of loans.
It is very important during this process that you know what are the possible consequences of foreclosure, just in case you had a thought of letting it go into foreclosure.
Not being able to sell your home in time is also a very real danger, and often occurs when a homeowner contracts with a real estate agent who isnt well-versed in marketing pre-foreclosure properties or working with short sales.
If youre facing foreclosure and have no way to bring the loan back into current standing, we would like the opportunity to speak with you about purchasing the home from you.
Not only do we buy homes in cash, we pay for all closing costs and can purchase quickly if your auction date is around the corner .
With this route, you can mitigate full loss of any equity youve built and can salvage your credit and qualify for financing much sooner than with a foreclosure event on your report.
Possible Contingencies To Texas Commercial Foreclosures
Sales cannot be postponed the notice of sale must be reissued. If the borrower files for bankruptcy, all foreclosures are suspended until 14 days after the stay is lifted or until the case is dismissed. A temporary restraining order or injunction can stop a foreclosure until it is dismissed or the court order expires.
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How Much Time Do I Have
The good news is that, except in rare cases, most lenders cant start the foreclosure process in Texas until at least 120 days after your first payment is missed. During that time, you can typically work with your lender to apply for various loss mitigation options to stop the foreclosure before it starts. Well cover your options for loss mitigation in the sections below.
The bad news is that once the foreclosure process is started, Texas has a rather quick foreclosure process. Because the foreclosure process in Texas is conducted by a trustee, it does not involve any filings in the courts, which means that the process moves quickly. Thats why its important to know your options and be equipped to make quick decisions. The entire foreclosure process can take as little as 41 days from the date the first notice is mailed, but typically takes a little longer depending on the timing of the mailing of the required notices and the actual foreclosure date.
So if you include the 120 day delinquent period and the 41 day foreclosure period, the Texas foreclosure process has approximately 161 days from the day that the first payment is missed until a home goes to auction. The timeline above is a summary illustration of the steps generally included in the Texas foreclosure process.
Knowing exactly where you stand can help you decide what might be the next best course of action. Lets talk about the most common foreclosure avoidance options that are available for most homeowners.
Texas Commercial Foreclosure Process: How Long Does It Take
Texas has a comparatively quick foreclosure timeline compared to other states. Texas is also unique in that it conducts all foreclosure sales one day each month, during a six-hour timeframe. Because the foreclosure process can happen quickly, its crucial for lenders to seek out a foreclosure service immediately to avoid costly foreclosure mistakes. See the Foreclosure Action Plan for more information.
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How Judicial Foreclosures Work
A judicial foreclosure begins when the lender files a lawsuit asking a court for an order allowing a foreclosure sale. If you don’t respond with a , the lender will automatically win the case. But if you choose to defend the foreclosure lawsuit, the court will review the evidence and determine the winner. If the lender wins, the judge will enter a judgment and order your home sold at auction.
How Long Does It Take For Banks To Foreclose In Texas
It takes approximately 60 days for a bank to foreclose on a property in Texas. There is a chance the foreclosure process will be delayed if the borrower decides to contest the action before a judge or files for bankruptcy. Foreclosure can also be delayed if the borrower seeks adjournments and delays of sales.
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Mortgage Loans In Texas
If you get a mortgage loan to buy residential real estate in Texas, you’ll likely sign two documents: a promissory note and a deed of trust. The promissory note is the document that contains your promise to repay the loan along with the repayment terms. The deed of trust, which is very similar to a mortgage, is the document that gives the lender a security interest in the property and will probably include a power of sale clause. If you fail to make the payments, the power of sale clause gives the lender the right to sell the home nonjudicially so it can recoup the money it loaned you.
Can Bankruptcy Prevent Foreclosure
Filing for bankruptcy will delay foreclosure but will not wipe out your lien or allow you to stay in the home without making payments. Chapter 13 is a reorganization in which certain debts are repaid over time, and the home can be saved. Chapter 7 is a liquidation and may delay a foreclosure, but usually, it will not allow you to keep your house if you are behind on payments.
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