Stop Foreclosure in Texas


How to Stop Foreclosure in Texas

Texas protects its lenders by allowing foreclosure to go rapidly with a non-judicial expedite of foreclosure in place. This means that a lender can send a 20 day notice of default to a homeowner after payment has been missed for a considerable window and soon after purveys a notice of sale. A homeowner typically looses their home in a period of sixty days if they do not act on the notice of foreclosure or do any steps to restrain or stop the proceedings. Unfortunately Texas does not hold a right of redemption for former homeowners which means repurchasing your foreclosed home is not allowed after the repossession is finalized. Of course getting a notice to foreclose is not the end of the world; there are several methods to stop foreclosure at its tracks.

Immediately after receiving the notice of default a homeowner should contact the mortgage company. In Texas, the quickest way to put a stop to a foreclosure process is to contact the bank or mortgage company and work out a payment plan where the payments can be halted for a short period of time to allow the homeowner to make up for missed mortgage payments and interest due. In some scenarios, lenders are even amiable enough to lower the interest rate or settle on an adjustable rate loan which gradually adjusts the interest rate as the homeowner recuperates and is able to make up for the lost revenues from previous faulty payments.

Refinancing the home is another way of salvaging your mortgage. Set up a conference with your mortgage company and explore a refinancing option to help you get settled on your mortgage payments especially if you are halfway through your mortgage.

You can also chose to get financial counseling from organizations such as the HUD in Texas, they can help you plan your finances an even speak to a lender if you have a difficult time negotiating your mortgage or working out a payment plan. If all else fails, you can sell the home for a short sale. A short sale is the quickest method of squeezing your way out of a mortgage and avoiding red ink on your credit report.

Synopsis of Texas Foreclosure Laws

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

In Texas, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process.

Judicial Foreclosure

The judicial process of foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure, the property will be auctioned off to the highest bidder.

Non-Judicial Foreclosure

The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A “power of sale” clause is the clause in a deed of trust or mortgage, in which the borrower pre-authorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the “Power of Sale Foreclosure Guidelines”.

Power of Sale Foreclosure Guidelines

If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out as follows:

  1. Prior to proceeding with a foreclosure, Texas laws state that the lender must mail the borrower a letter of demand, informing the buyer he has twenty (20) days to pay the delinquent payments or foreclosure proceedings will begin.
  2. At some point after the borrowers twenty (20) days have expired, but at least twenty one (21) days before the foreclosure sale, a foreclosure notice must be: 1) filed with the county clerk; 2) mailed to the borrower at their last known address; and 3) posted on the county courthouse door.
  3. The foreclosure sale must take place on the first Tuesday of any month, even if said Tuesday falls on a legal holiday, but only after the proper preliminary notices have been given. The sale is on the courthouse steps by auction to the highest bidder for cash. Anyone may bid, including the lender, who bids by canceling out the balance due on the note, or some part of it.

Lenders may obtain deficiency judgments, but they are limited to the difference between the fair market value of the property at the time of sale and the balance of the loan in default.

Where to go to for Foreclosure Help

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

Office Hours: 8:00 a.m. to 4:30 p.m.
Monday through Friday

Fort Worth Regional Office

Department of Housing and Urban Development
801 Cherry Street, Unit #45
Suite 2500
Fort Worth, TX 76102

Phone: (817) 978-5965
Fax: (817) 978-5569

C. Donald Babers
Deputy Regional Director

Office Hours: 8:00 a.m. to 4:30 p.m.
Monday through Friday

Houston Field Office

Department of Housing and Urban Development
1301 Fannin, Suite 2200
Houston, TX 77002

Phone: (713) 718-3199
Fax: (713) 718-3287

Edward Pringle
Field Office Director

Office Hours: 8:00 a.m. to 4:30 p.m.
Monday through Friday

Lubbock Field Office

Department of Housing and Urban Development
George H. Mahon Federal Office Building
1205 Texas Ave, Suite 511
Lubbock, TX 79401

Phone: (806) 472-7265
Fax: (806) 472-7275

Miguel C. Rincon, Jr.
Field Office Director

Office Hours: 8:00 a.m. to 4:30 p.m.
Monday through Friday

San Antonio Field Office

Department of Housing and Urban Development
One Alamo Center, Suite 500
106 South St. Mary’s Street,
San Antonio, TX 78205

Phone: (210) 475-6806
Fax: (210) 472-6804

Richard Lopez
Field Office Director

Office Hours: 8:00 a.m. to 4:30 p.m.
Monday through Friday

Stop Foreclosure Early

Advantage Mortgage North
(512) 502-9682
6101 W Courtyard Dr Bldg 3
Austin, TX

All Homes Mortgage
(512) 302-4244
6010 Balcones Dr
Austin, TX

Alethes LLC
(512) 264-2115
20208 Auger Cove
Spicewood, TX

Westin Mortgage Group
3350 N. Dowlen Suite F
Beaumont, TX

5mortgage Wise Lending
(713) 926-9700
5731 Gulf Fwy
Houston, TX

Alter Link Mortgage Inc.
(512) 977-9740
2121 W Parmer Ln
Austin, TX

Able Mortgage
(512) 302-5029
314 E Highland Mall Blvd
Austin, TX

A New Life Mortgage Co.
(972) 557-0102
10321 Trail Ave
Dallas, TX

Mortgage Pros, Inc.
3520 Executive Center Dr. #250
Austin, TX

1st Abana Mortgage Corp.
(713) 645-7200
7227 South Loop E
Houston, TX