Recently on our legal forum a user asked, “I lost my job about six months ago, and I have not been able to find a new one. I live in Texas, and I have owned my home for five years. I am wondering what will happen if I miss too many house payments? How long will it take for the bank to complete a Texas foreclose, and what steps will they have to take?”
What happens when you buy a home in Texas?
Generally, if you have purchased a home in Texas, you have signed a promissory note and a deed of trust. The promissory note is the document that establishes your duties to repay the loan, as well as the loan terms, and how it will be repaid. The deed of trust provides security for the loan.
Homeowners may be allowed a very short grace period if they fail to pay their mortgage payment on time; wait too long and the lender will initiate a foreclosure. Foreclosures in Texas may be judicial or nonjudicial.
A judicial foreclosure is required when there is no power-of-sale clause included in the mortgage or deed of trust. If a deed of trust contains a power of sale clause, however, the lender can foreclose without going to court. They can simply sell the property for repayment of the loan. If a nonjudicial foreclosure is allowed, however, the lender must complete the following steps:
- Send a demand letter requesting payment and give the borrower 20 days to pay all past due amounts.
- After the twenty day notice and at least 21 days before the foreclosure date the lender must provide additional information about the foreclosure to the county clerk in the county in which the property is located and to the defaulting borrower and all affected creditors with liens.
- They must post the information about the foreclosure with the county court where the sale is scheduled.
- State laws also require foreclosures to be held on specific dates and times at the courthouse.
How long until the Texas foreclosure is completed?
Now, you asked how long until the Texas foreclosure would be completed. It will depend on whether your home is foreclosed through a judicial or nonjudicial foreclosure, whether you decide to file bankruptcy and stop the foreclosure, or whether you are able to contest the action in court.
If the lender is able to file a nonjudicial foreclosure, however, and you do nothing to contest it, it could take as little as 60 days to complete the Texas foreclosure.
How do I stop the Texas foreclosure?
There are several steps you can take if you think your lender is getting ready to initiate the Texas foreclosure process. The first step is to contact them. Avoiding the problem is the worst thing you can do.
Next, find out if there is anything they are willing to do to work with you. Lenders do not want your home. Foreclosures are a hassle and expensive to complete.
If none of the above steps work the next option may be to talk to a bankruptcy lawyer to find out if filing bankruptcy can stop the Texas foreclosure.
State laws regarding the process for foreclosure vary by state. The first place to start if you have questions about your rights in the State of Texas is to review Title 5, Section 51 of the Texas Code.
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