What Happens After Foreclosure in Texas?

Texas lenders must provide homeowners with 20 days to cure the default on their mortgage loan before foreclosure begins.

Borrowers in Texas who are in default of their mortgage loan must receive a notice from their lender at least 20 days before the foreclosure process begins. Failure to bring this loan current results in the foreclosure of the home. Borrowers then receive a second notice, informing them of the impending sale of the home.

Sale

Lenders in Texas will schedule the sale of a home that is in foreclosure after the initial notices of delinquency are mailed to the borrower. The sale must take place on the second Tuesday of each month. Homes in foreclosure are sold at auction on the courthouse steps, are sold to the highest bidder and are payable in cash.

Redemption

Sales that are made during the foreclosure process in Texas are final. According to Foreclosure.com, the state of Texas has no statutory right of redemption once a home is sold in foreclosure. This means that borrowers are not allowed any period of time in which to pay the loan in full and reclaim the home once it is sold.

Deficiency

Texas law allows lenders to seek deficiency judgments against borrowers who lose their homes to foreclosure. Lenders often seek a deficiency judgment if the amount the home is sold for is lower than the amount due on the mortgage loan. Texas law limits lenders when seeking this type of judgment to the difference between the fair market value of the home and the defaulted loan amount when the home is sold. An appraisal is done to determine the fair market value of the home.

References

• Foreclosure: Texas Foreclosure Laws
• Foreclosure Law: Texas Foreclosure Law