How to avoid foreclosure in Texas

How foreclosure works in Texas, step by step

1. Missed payments

   Federal rules generally stop your servicer from starting foreclosure until you are more than 120 days behind. Use this time to call your servicer and ask about options to catch up or change the loan.

   12 C.F.R. § 1024.41(f)

2. Notice of default and chance to cure

   The servicer must send you a letter by certified mail saying you are in default and giving you at least 20 days to cure before it can give notice of a sale. Your loan papers may give you more time.

   Tex. Prop. Code § 51.002(d)

3. Court order, for some loans only

   For a home equity loan, reverse mortgage and some other liens, the lender must first get a court order. You are mailed a citation, and your written response is due the first Monday after 38 days from the mailing date shown on the citation.

   Tex. R. Civ. P. 735, 736

4. Notice of sale

   At least 21 days before the sale, a notice of sale must be mailed to you by certified mail, posted at the courthouse door and filed with the county clerk. The county must also post it on its website.

   Tex. Prop. Code § 51.002(b), (f-1)

5. Foreclosure sale

   The home is sold at public auction between 10 a.m. and 4 p.m. on the first Tuesday of the month, at the county courthouse or another place the county has designated. The sale must begin at the time in the notice or within three hours after it.

   Tex. Prop. Code § 51.002(a), (c)

6. After the sale

   There is generally no right to buy the home back after a mortgage foreclosure sale. If you do not move out, the new owner must give you a written notice to vacate, at least three days unless your loan papers set a different period, and then file an eviction case in court.

   Tex. Prop. Code §§ 24.002, 24.005

Texas foreclosure deadlines to know

These are the periods written into the law. Your own dates are on the notices you received. If a notice and this page disagree, trust the notice and ask a counselor or lawyer.

Your rights as a homeowner in Texas

Other Texas protections

• Written default notice and 20 days to cure

  For a home you live in, the servicer must send a certified mail notice of default and give you at least 20 days to cure before it can give notice of sale. This applies no matter what your loan papers say.

  Tex. Prop. Code § 51.002(d)

• Court order needed for home equity loans

  A lender on a home equity loan, home equity line of credit or reverse mortgage must get a court order before it can sell. If you file your own separate lawsuit about the loan before 5:00 p.m. on the Monday before the sale, the expedited case is automatically stayed.

  Tex. R. Civ. P. 735, 736.11

• Fair market value credit on a deficiency

  If you are sued for a deficiency, you can ask the court to credit you with the home's fair market value instead of a low auction price.

  Tex. Prop. Code § 51.003(b), (c)

• Military service notice

  Every foreclosure notice sent to you must include a bold statement about the rights of active duty service members and their spouses. If this applies to you, send written notice of the military service to the sender right away.

  Tex. Prop. Code § 51.002(i)

Texas mortgage assistance programs

If the home is sold for more than you owe

If the trustee's sale brings in more than you owe, the extra money (surplus) belongs first to any other lienholders and then to you. Texas law requires the trustee to keep the sale money in a separate account, keep a record of it, and make reasonable efforts to find the people entitled to the surplus. The trustee can take reasonable fees and costs out of the surplus, and a fee of up to 2.5 percent or $5,000, whichever is less, is presumed reasonable. Write to the trustee named in your notice of sale to claim it, and ask legal aid for help. Ignore companies that offer to recover it for a share.

Tex. Prop. Code § 51.0075(f); Tex. Bus. & Com. Code § 22.006

Ways to avoid foreclosure

Most of your options come from federal rules and from whoever owns or insures your loan, so they work the same way in Texas as anywhere else. What changes by state is how much time you have to use them.

• Repayment plan
• Forbearance
• Payment deferral or partial claim
• Loan modification
• Reinstatement
• Short sale
• Deed in lieu of foreclosure
• Chapter 13 bankruptcy