Texas Foreclosure Rules
By the end of 2009, the foreclosure rate in the state of Texas was 2 percent, according to the Mortgage Bankers Association. While still 2.5 percent below the national average, it meant that there were a lot of homes on the market which were going through the foreclosure process. The foreclosure process varies from state to state, and there are certain laws which are specific to the Lone Star state.
Other People Are Reading
-
Non-Judicial Foreclosure
-
Texas Property Code 51.002 regulates how a nonjudicial foreclosure must take place within the state of Texas. A nonjudicial foreclosure occurs when there is language in the mortgage papers which gives the bank the right to foreclose on the property if the borrower has defaulted on the payments.
For the nonjudicial foreclosure to occur, several things must take place. The bank or lending institution must give the defaulted borrower 20 days to cure the debt. If the debt is not cured the auction of the home must take place between 10 a.m. and 4 p.m. at the county courthouse. Notice of the auction must also be posted at the courthouse 21 days prior to the sale. Also, the auction date must be filed with the county clerk. The defaulted borrower must also receive written notice of the date of auction as well.
Deficiency Judgement
-
If the sale price of the foreclosure is less than what is owed by the defaulted borrower, the bank or lending institution has the right to collect the remaining amount due in a judgment against the defaulted borrower. However, this judgment must occur within two years of the foreclosure sale. However, the defaulted borrower does have a right to request a fair market value of the foreclosure property from the court.
The court will take into account expert real estate testimony, comparable sales, anticipated marketing time and sales costs. If the property is deemed to be worth more than the foreclosure sale costs, then the lender will collect the judgment. However, if the property is deemed to be worth less than the sale cost, the defaulted borrower will be credited any overages against the debt they owe.
-
Judicial Foreclosure
-
If there is nothing in the mortgage contract which allows the lender to foreclose on the defaulted borrower, then the lender must take the defaulted borrower to court for a judicial foreclosure. During this process, the lender will present the documentation which supports the claim that the borrower has in fact defaulted. The borrower will have a chance to answer such claims with evidence supporting her side. If the court deems that the borrower is in default, then the foreclosure process will begin under court order.
After the sale, the court will then determine the fair market value of the home based on similar criteria as that used above. If the fair market value is higher than the foreclosure sale price, then the defaulted borrower will be credited. If the sale is lower, than the court may impose a monetary judgment against the defaulted borrower for additional monies owed the lender.
-
References
- Photo Credit texas map image by Vladislav Gajic from Fotolia.com
