Texas Foreclosure Process and Laws

Quick Facts About the Texas Foreclosure Process

Judicial Foreclosure Available: Yes

Non-Judicial Foreclosure Available: Yes

Primary Security Instruments: Deed of Trust, Mortgage

Timeline: Typically 60 days

Right of Redemption: No

Deficiency Judgments Allowed: Yes

Lenders in Texas may foreclose on mortgages in default through a judicial or non-judicial process.

Judicial Foreclosure
The judicial foreclosure process is used when there is no power of sale clause in a mortgage. It involves filing a lawsuit to obtain a court order to foreclose. The property can then be auctioned off to the highest bidder.

Non-Judicial Foreclosure
When a power of sale clause is present in a mortgage, this means that the borrower has pre-authorized the sale of the property to pay off his debts in the event of his default. The lender obtains the power to sell the property, and either he or a trustee can sell the property at an auction following the the “Power of Sale Foreclosure Guidelines”.

Power of Sale Foreclosure Guidelines
If the power of sale clause specifies the terms of the sale, this must be followed. If not, the non-judicial process is carried out as follws:

The lender must first send a notice of intent to foreclose to the borrower, stating that he has 20 days to cure his default or the foreclosure proceedings will begin.
After the 20 day-period has expired and 21 days before the date of foreclosure sale, a foreclosure notice must be filed with the county clerk, mailed to the borrower’s last address and posted in the county courthouse door.
The sale must take place in the courthouse steps during the first Tuesday of every month, even if it falls on a holiday but only after the preliminary notices have been given. Anyone may bid for cash, including the lender by cancelling out some of the balance due by the borrower.

Lenders may file for deficiency judgements, but are limited to the difference between fair market price and balance of the loan in default.

Foreclosure Avoidance Counseling

HUD-approved housing counseling agencies are available to provide you with the information and assistance you need to avoid foreclosure. As part of President Obama’s comprehensive Homeowner Affordability and Stability Plan (HASP), you may be eligible for a special Making Home Affordable loan modification or refinance, to reduce your monthly payments and help you keep your home.

If you need help understanding the Making Home Affordable programs, you can use this search tool to find a counseling agency in your area that will provide you with free foreclosure prevention services. If you are eligible for the loan modification or refinance program, the counselor will work with you to compile an intake package for your servicer.

Foreclosure prevention counseling services are provided free of charge by nonprofit housing counseling agencies working in partnership with the Federal Government. These agencies are funded, in part, by HUD and NeighborWorks® America. There is no need to pay a private company for these services.

For general questions about HUD or its programs contact the HUD office nearest you. In Texas, offices are located in Dallas, Fort Worth, Houston, Lubbock, and San Antonio.

Dallas Field Office Department of Housing and Urban Development
A. Maceo Smith Federal Office Building
525 Griffin Street, Suite 860
Dallas, TX 75202-5007

Phone: (214) 767-8300

Fax: (214) 767-8973

Bob Cook
Field Office Director