Foreclosure Lawyer

Foreclosure Process

Texas Foreclosure Process

In the State of Texas most foreclosures are non-judicial (taking place outside of court). The Lender is required to show proof of their right to foreclose on your home. The loan papers (or "documentation") must include an obligation to pay (usually called a Note, Real Estate Lien Note, Promissory Note, or Note with Vendor's Lien) and should also include the security agreement (often referred to as a Deed of Trust). The Deed of Trust provides the lender the right to foreclose if you fail to make your payments. The Deed of Trust generally will appoint a Trustee and must also contain a Power of Sale. It will also usually include the lender’s right to designate a "Substitute Trustee" upon their discretion.

The following steps include the basic procedures that the lender must go through to foreclose the lien. While there are several Types of Foreclosure practiced in the State of Texas, the below steps outline the most common type (non-judicial):
 

Texas Foreclosure Process
(step by step non-judicial foreclosure)
Step 1 Demand for payment – If you have missed one or more payments on your home, the lender must notify you of your default and demand the overdue payment or payments be made before pursuing any further.
Step 2 Notice of Intention to Accelerate - Prior to foreclosure the lender must give notice of their intention to accelerate the sale of your home. The Notice of Intention to Accelerate should give at least 10 days within which you are able to settle your negative balance. If the property is your main residence you should be given at least 20 days notice. After this time period has expired the lender is free to proceed in the foreclosure of your home.
Step 3 Notice of Foreclosure – Assuming the Lender has a valid Deed of Trust and has followed the appropriate steps to foreclose through the designated trustee or a "substitute" trustee and if the Notice of Intention to Accelerate has expired the lender can "post" your property for foreclosure. The Notice of Foreclosure must be posted at the Courthouse and must be sent via certified mail with a return receipt requested. It is important to note that the law does not require you to actually receive this notice. It only requires that the lender must be able to show proof they’ve sent it to you. The Notice must provide you with at least 21 days notice of the foreclosure and must inform you of the time, date, and location of the foreclosure sale. 
Step 4 Posting of the Property – The Notice of Foreclosure must be posted for a full 21 days prior to the sale and must be filed with the County Clerk's office. The posting location is generally on the courthouse door but can also be another public location determined by court commissioners.
Step 5 Foreclosure Sale – All foreclosure sales take place between 10 a.m. and 4 p.m. on the first Tuesday of the month regardless of holidays and usually on the county courthouse steps. The sale is conducted as a public auction with the property going to the highest bidder, who will then pay in cash. The lender is also eligible to bid on the property. Up to the very day of the sale you still have a chance to postpone the foreclosure by filing either a Chapter 7 Bankruptcy or Chapter 13 Bankruptcy. The only requirement is that your bankruptcy is filed at least 1 minute before the auction begins.
Step 6 Transfer of Ownership – The appointed Trustee transfers ownership to the highest auction bidder free and clear of any junior liens but subject to any senior liens. If the winning bid amount is higher than the amount owed to the lender, any surplus goes to junior lien holders. In Texas, the borrower’s right of redemption after the sale of a non-judicial foreclosure does not exist.