Foreclosure Process & Value of Bid in Texas

The mortgage foreclosure rate in Texas, as of August 2010, is one in 672 mortgages, according to Texas Ahead.

Texas is known as the "fastest" foreclosure state, as foreclosures in Texas can be completed in as little as 21 days. This can mean quick turnover for lenders when reselling foreclosed properties.

Process

The foreclosure process in Texas begins when borrowers are 30 or more days late on their mortgage. At that time, the lender sends a notice of default. About 30 days after that, the lender sends a notice calling the entire amount of the loan due and, finally, after 30 more days, sends the foreclosure notice with the auction date scheduled 21 days from the date of the notice.

Sheriff's Sale

Foreclosures are considered completed and closed once the auction for the property is concluded. Auctions are held via a sheriff's sale in the county where the property is located on the first Tuesday of each month. Interested buyers can place a bid on the property.

Bidding

Values of a bid at a foreclosure auction are specific to the balance owed to the bank and any other property liens, tax liens and legal fees that were associated with the foreclosure. If a buyer at auction underbids the bottom line price that the bank is willing to take for the property, the bank will retain the property for sale on the open market after auction, typically at a higher price point.

References

• Lonestar Land Law: Foreclosures in Texas
• Texas Ahead: Comptroller's Economic Outlook