Texas Foreclosure Laws

Texas Foreclosure Laws - House In Texas, there are a variety of different processes involved when it comes to foreclosure. The two primary types of Texas foreclosure laws include what are known as non-judicial foreclosures and judicial foreclosures. The following will take a closer look at these Texas foreclosure laws, how they affect your ability to sell your home, and the power of sale clause that can sometimes apply.

Judicial Foreclosure

A judicial disclosure begins when a lawsuit is filed in order to receive a court order to foreclose on a mortgage or deed of trust. This type of foreclosure is typically used when a power of sale clause hasn’t been placed onto the mortgage or deed of trust. Once a foreclosure has been set, the property in question will be placed into an auction, where it will then be sold to the person or entity that bids the highest.

Non-Judicial Foreclosure in Texas

A non-judicial foreclosure only takes place when a power of sale clause has been placed onto the deed of trust or mortgage. This clause is placed into the original loan by the borrower, which formally authorizes the sale of the property if a default occurs on it. The mortgage or deed of trust can then be sold in order to pay off the balance of the original loan. When this clause is in place, either the lender or representative for the lender has the right to sell the property. These people are commonly known as trustees.

Power of Sale Clause Regulations

Texas Foreclosure LawsThere are certain guidelines and regulations that come with a power of sale clause in Texas. First, if the power of sale clause within the deed of trust or mortgage specifically states the terms of the sale and when and where it is to take place, then the lender must follow those guidelines. However, in the event that there are no specific guidelines, there are a set of rules that have to be followed. For instance, the lender will be required to mail a letter of demand to the borrower, which states that the borrower will have exactly 20 days to pay all leftover payments that are due. If these payments are not payed, the foreclosure will go forward. Once 20 days have passed, but at least three weeks before the foreclosure is set to take place, a notice of foreclosure will need to be filed, posted on the door of the county courthouse and mailed to the borrower. Lastly, the foreclosure will need to take place on the first Tuesday of the month. The mortgage or deed of trust will go to auction and the highest bidder will receive it.

While many people believe that filing bankruptcy in the case of a foreclosure is the best thing to do, as this delays the foreclosure from taking place for a few months, Jed Shaw at Shaw Defense has an alternate and more beneficial solution to bankruptcy. For more details about this solution and for additional advice on your personal situation, contact us at 713-750-9038 today!

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