What Is the Foreclosure Process in Texas?
The foreclosure process in Texas is very straightforward. Texas foreclosures can be completed very quickly, in some cases, in as little as 21 days. Since Texas is a non-judicial foreclosure state and the foreclosure is handled by a bank-appointed trustee already in place, there is little hindrance to a lender who finds a borrower in default.
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Non-judical Foreclosure
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There are two types of foreclosures: judicial and non-judicial. In a state that requires a judicial foreclosure, the lender must go through the court system in order to be granted the right to foreclose on the home. In a non-judicial state, such as Texas, the lender does not have to go through the court system, other than to file a notice of foreclosure with the county clerk where the property is located. This is one of the reasons that foreclosures in Texas can be handled so expediently.
Pre-foreclosure
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Once a borrower is 30 days late on a mortgage payment, he is considered to be in default. Default status means that the borrower has violated the terms of the deed of trust on the property and is in danger of the foreclosure process moving forward. It is at this point that the property moves into pre-foreclosure status.
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Acceleration
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Once the borrower has fallen behind 60 or more days on the mortgage payment, the bank can move the loan into accelerated status. At this point, the bank is demanding full payment for the balance of the loan and giving the borrower the final notice of default prior to foreclosure. The borrower is typically given 10 to 20 days to respond to the notice of acceleration before the lender takes the next step.
Filing with The Trustee
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In Texas, a lender has a court-appointed trustee that manages the foreclosure files. Once the trustee receives the intent to foreclose on a home, he contacts the attorneys that the bank has on retainer in that state and begins to file the foreclosure paperwork using their services. The attorneys draft a notice of foreclosure to the borrower. This notice is sent via certified mail, informing the borrower that the property is being foreclosed and what date the foreclosure auction will take place. It also informs the borrower of his rights in regard to the property and what will occur once the foreclosure auction is completed. While the mailing of this documentation is a legal courtesy, the borrower does not have to acknowledge receipt of the notice in order for the bank to proceed. In the state of Texas, the borrower must be sent the notice within 21 days or more prior to the auction date.
The Court Notice
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In Texas, once the foreclosure notice has been sent, the trustee will file paperwork with the county clerk's office stating the property is going into foreclosure. At this point, the county clerk's office will post the foreclosure notice and auction date on its website (if available) and/or in front of the county clerk's office. This cannot be done, however, any sooner than 21 days prior to the auction.
The Auction
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At the auction, the property will either be sold to the highest bidder or kept by the bank or government entity that insured it. Once the gavel falls at the conclusion of the auction, the foreclosure process is complete.
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References
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