Foreclosures in Texas are most often contractual in nature with those contracts
having specific detailed procedures for foreclosure when and should the need
arises. This form of foreclosure
is called the non-judicial foreclosure. The non-judicial foreclosure denotes that the lender need not
ask a judge to authorize the foreclosure and sale.
The mortgage instrument (deed of trust) outlines the procedures for
foreclosure that the lender must follow.
Deeds of trust may vary from lender to lender, but all Texas foreclosures
must follow certain procedures. If
the mortgage is on the borrower’s residence, the lender must give the borrower
20 days notice to pay the amount in arrears. The notice must be sent by certified mail and cannot be waived.
Once the 20-day period has passed and if the borrower has not brought the
note and additional expenses current, the lender may accelerate the note by
sending a notice to the borrower. Notice
of the foreclosure sale must be served on the borrower and must also be posted
at the courthouse in the county in which the property is located. The actual
foreclosure sale takes place, as required by Texas law, on the first Tuesday
of the month that is at least 21 days after the notice is posted and mailed.
The sale is conducted by the trustee for the lender and must be carried
out in a lawful manner consistent with Texas law.
Most often the house is not auctioned for fair market value but instead goes
for a sum far less. However,
should the sum be in addition to the amount necessary to pay the lender in
full and expenses, the borrower will receive the overage.
However, if the amount of money received from the sale is not sufficient
to cover the lender’s outstanding balance and expenses, the borrower can be
sued to recover the deficiency.
