When can a Lender Start Foreclosure in Texas?
Most Loans from banks usually must be delinquent for at least 120 days. Delinquent means there haven’t been payments made from you to the bank, per this article in Investopedia a Loan is Delinquent when you make late payments or miss a regular installment payment or payments.
If there has been delinquency for an extended period of time, the Loan goes into Default. At this stage is when things get complicated.
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Before we go into the actual Foreclosure process in Texas
We need to understand first what is a foreclosure?
– A Foreclosure is the repossession of a home when a loan borrower defaults on their mortgage. In other words, foreclosure describes the process of when a Lender (usually a Bank) collects a loan’s collateral. There’s a lot to know about the foreclosure process and many things could go wrong, it is important to be informed if you are in a situation like this. To purchase a home, a home buyer in most cases needs a loan. So, they will go to a bank (or other financial institution) to take out a loan. What the home buyer withdraws is a home loan. This loan is given to the borrower with the promise that the borrower will pay back the trustee with monthly payments.
So, what happens when the borrower doesn’t make a payment because of financial difficulties, such as an economic recession or COVID? When the borrower does not make a payment, in Texas if the delinquency is at least 120 days, the Lender will officially start the Foreclosure process. In Texas, foreclosure is generally a 3-step process. (Exception: If you have a home equity loan, home equity line of credit, a tax lien transfer loan, or owe assessments to a homeowner’s association, a court order is usually required before your property can be posted for sale. In some instances, an order is also required to foreclose on a reverse mortgage. A lawsuit must be filed if a government entity is trying to foreclose, e.g. for property taxes, a condemned property, etc.).
1 – Notice Of Default is to notify the borrower that they have defaulted on their loan. This will mark the beginning of the foreclosure process, which is also known as “pre-foreclosure.” By law, the lender/servicer is required to send a written notice allowing you 20 days to “cure” (pay in full the amount owed) to bring the defaulted loan current. Some loans increase this period to 30 days (most FHA, VA and home equity loans).
2. Notice of Sale Filed, Posted and Mailed – Next, the law requires at least 21 days’ written notice of the date on which the foreclosure sale (auction) is to take place. The 21 days begin from the date the notice is mailed, not the date you receive it. Failing to collect your certified mail will not stop or invalidate the foreclosure sale. The foreclosure notice is also posted at the courthouse and filed with the county clerk.
3. Foreclosure Sale – Foreclosure sales are held at the county courthouse on the first Tuesday of each month. Anyone may bid. After the auction, you do not have a right to buy back your property from the new owner unless it is being sold by a government entity, a tax lender or for nonpayment of homeowner’s association fees. There are time limits involved and in some cases you must pay a redemption fee.
How Can I Avoid Foreclosure in Texas?
Depending on your specific situation, there could be different Options, we strongly suggest you to be informed so you could make the best deception for you and your loved ones. If you are behind in payments you most likely have already talked with your Lender, if you haven’t please make sure to talk to them and understand How Much You Owe and when the Loan actually goes into Default. Once you have this information get in touch with us! we will then review your case and prepare one of our multiple options we have available for you, it does not matter how much you owe or the condition of the house. We have been helping Home Owners in Texas to avoid Foreclosure and stay in their house. The perfect time frame for you to be able to avoid it, is when you are in the Step 1 or Pre-Foreclosure. Here we will have many options available to you and most important you will have time to think about it and make the best deceptions for you and your family.
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