If you live in the great state of Texas and find yourself in foreclosure, then you will need to act quickly. Unfortunately, the entire foreclosure process in Texas is much shorter than many other states. That is not to say that you don't have options, rather that your options will have to be understood and executed upon quickly or else you may lose your home. If you are seeking mortgage default assistance, then the first thing to understand is that foreclosures in Texas are carried out both in court and out of court. The entire foreclosure process can take about three months.



To understand the difference between in court and out of court foreclosures, consider this. When no power-of-sale clause is included in the mortgage or deed of trust, then the foreclosure is administered by the court. If that's the case, then the lender will file suit against the homeowner to obtain a court order to move forward and foreclose on the property. Once the court declares foreclosure, the property is scheduled for public sale..

However, in the state of Texas foreclosures are more often accomplished out of court. In that case, the lender will first mail out a letter to the homeowner stating that they have 20 days to pay the total amount of back payments, fees and penalties. After this, the lender may begin the foreclosure process another letter. This time it may state that the loan has been accelerated and that a sale date has been scheduled on the home.

If you haven't already at this point, you should seek mortgage default assistance. As you see, everything progresses very quickly. If the collections department is unwilling to work out a solution with you, you can either seek help from a HUD approved counselor or a mortgage default assistance firm that specializes in stopping sale dates. The lender mails a copy of the notice to the borrower at the last known address 21 days prior to the sale, as well as posting a notice of sale at the door of the county courthouse and files for a foreclosure notice with the country clerk 21 days prior to the foreclosure sale.

Unlike other states, Texas does not require the lender to publish notice of the sale in the local newspaper. In Texas, all foreclosure sales are held on the first Tuesday of the month and the times are between 10 a.m. and 4 p.m. The foreclosure sales are usually held on the county courthouse steps. The property goes to the highest bidder, who pays in cash, at the public auction. The trustee may allow some time within the same day for the winning bidder to collect the full amount. What many don't realize, is that the lender is also eligible to bid on the property as well. At this point, the ownership of the property is transferred to the highest bidder from the trustee. Although this is free and clear of any junior liens, it is subject to senior liens. In the case that a bid is higher than the amount owed to the lender, the surplus would go to the junior lien holders. Unfortunately, in the state of Texas the borrower does not have the right of redemption after the sale takes place.

Now that you have an understanding of the actual process you can see why time is of urgent matter. If you want to keep the home, you may seek mortgage default assistance. The first step is to contact your lender and see if they are willing to work out some type of repayment plan. If a sale date has been issued, you may very well have to cover at least the attorney fees. If you can't seem to get anywhere with your lender or the collection department, you can contact a HUD approved counselor. They may be able to get you assistance and work out a plan that is favorable solution and go over such plans as loan modifications, recast, forbearance, special forbearance and others. It should be noted that Veterans and military personnel have some alternatives. Make sure to contact your VA loan representative. Active duty personnel may be able to receive mortgage default assistance under the Soldiers and Sailors Civil Relief Act, and may be eligible for a reduction in their interest rate. Of course if you no longer want to keep the home, other options may be through a short sale or deed in lieu of foreclosure. However make sure you consult with a tax advisor prior to going through with that as there may be tax consequences.