Non-judicial foreclosures take place without court involvement. This is the most common type of foreclosure in Texas. Although the court usually doesn’t play a role, there is a legal process that lenders must follow.
Contact from the loan servicer
Texas foreclosure law requires that the loan servicer contact you within 36 days of the first missed payment to discuss options for minimizing losses. Note that they must only attempt to contact you, so if you missed their phone call, then this still counts as contact. For each subsequent missed payment that you have, they must contact you within 36 days too. Some lenders are willing to modify your loan when you are struggling to pay. It’s important to reach out as soon as you know you’re not able to make the payment to work out a solution.
Receive a breach letter
The mortgage company should send you a breach letter to inform you that foreclosure proceedings will soon start if there is no resolution. Texas law requires that mortgage companies send this letter by the 90th day to allow you at least 30 days to catch up on payments or negotiate a resolution.
Your home is up for foreclosure
After 120 days of your first missed payment, your lender is now able to put up your home for foreclosure in an auction. Once they have an official date of the auction, they need to send you a notice of the auction date, time and place at least 21 days in advance.
Foreclosure auctions in Texas occur on the first Tuesday of the month from 10 a.m. to 4 p.m. They take place at the county courthouse, and anyone may place a bid, including the lender. If your lender wins the auction, they only pay what you owe for the home. In situations where the house sells at a loss, your lender could file a deficiency judgment against you in order to recover the losses. On the other hand, you might receive a credit for the difference if your home sells at a profit.
The foreclosure process is faster in Texas than in some other states. However, you will have a chance to work out a solution with your lender before they list your house in a foreclosure auction.