Types of foreclosure in the State of Texas

Foreclosures in the State of Texas can be handled in one of three ways: judicially (in court), non-judicially (outside of court), or a combination of the two often referred to as a hybrid. The method used is determined by the type of mortgage held.

When is a Judicial Foreclosure used?

If you owe property taxes a traditional lawsuit can be filed against you by the Government to force you to sell your home to pay for the taxes you owe. Likewise your lender can also use this method to collect the money needed to pay off taxes you owe on your property. Lenders however are unlikely to pursue this type of action because it is often more time consuming than some of the other options available to them by law.

When is a Non-Judicial Foreclosure used?

If you have a standard original loan that was used to purchase your home or you’ve refinanced the “original purchase" loan then your lender is likely to pursue a non-judicial foreclosure. If you or a family member is on active military duty, you have some additional protection, including the right to demand that a judge pass on the merits of the foreclosure even though Texas is a state where non-judicial foreclosures are the norm.

When is a Hybrid Foreclosure used?

If you have taken out a home equity loan, debt consolidation loan (using the equity in your home as collateral), or a property tax loan then you will most likely be looking at a combination of both judicial and non-judicial foreclosure. In this case your lender must obtain court approval before given the right to begin the Foreclosure Process. Furthermore the lender can speed up the process by filing an application for expedited foreclosure. When the application is filed a copy must be sent by certified mail to you (not served by a sheriff or constable).  

You then would have 38 days to file a response to the application. If you file a response in writing, the court will schedule you for a hearing. No evidence is usually heard from the witness stand; instead, the court reviews the documents on file to see if the lender is entitled to foreclose. If the court rules in favor of the lender, the foreclosure will be authorized to occur and the foreclosure will proceed just as in non-judicial cases whereby a second notice will be sent, giving you and the public at least 21 days notice that a sale will occur.