Foreclosures can vary quite a bit from state to state. Each state has different laws on how purchases are made, financing is done, legal notices of late payments and whether or not you will have to go to court or not. A foreclosure in Texas is a relatively simple and fast process when compared to other states like Hawaii or Michigan. In Texas the average foreclosure in Q2 of 2023 occurs in 162 days and this depends a lot on the type of loan you have, it can be as short as 40 days.
If you are facing foreclosure today it can feel like you are all alone because nobody talks about financial trouble they face. That being said I can assure you that you are not alone and we talk to people every week, just like you, in the greater Katy, TX and Houston, TX area that need help. Once you understand the process and work with a real estate professional to talk through options that work for you it puts you back in control of a situation that once seemed overwhelming. We wrote this article to help walk through how a foreclosure works in Texas but we are here for you just reach out!
- Texas is a Non Judicial state which makes foreclosure much faster than other states. On average 162 days.
- Legal Paperwork that enables foreclosure is done at purchase or refinance which means only a written notice is required to foreclose on a property
- There are options for help, reach out to us and we can help you or we can get in touch with someone who can.
How Long does it take to foreclose in Texas?
Texas, being a non judicial state, has an average of 162 days to foreclose but legally a foreclosure can occur in just 41 days. Texas is faster than most states to foreclose however it is not the fastest state out there as Wyoming has an average of just 104 days. On the other extreme, states like Michigan, are seeing average foreclosures take 2,601 days because they are a judicial state and require a number of notices and opportunities to contest or work out options. To simplify what this means, there are two types of foreclosures in all 50 states. Judicial foreclosures require the lienholder to file a civil suit against you if they wish to foreclose on a property and Non Judicial foreclosures do not require a civil suit to be filed and you will not go to court if you are facing foreclosure. The difference between the two types of foreclosures can be significant!
How does Texas Require a lender to give Notice of Foreclosure?
In Texas the lender is required to send you two notices via mail, that’s it. Texas requires that lenders give a notice of late payments and then gives the borrowers 20 days to get caught up on those late payments. If that doesn’t happen the lender may enforce a full payment of the loan amount or enforce foreclosure within 21 days. At that point the property may be auctioned to the highest bidder or be given to the bank as a bank owned property. They are not required to call or to set a court hearing or schedule any formal in person notification. If you are borrowing in Texas but you are using a federally backed loan then this could change as the Federal government does have several disclosures and communication requirements for loans such as Conventional, FHA, VA etc. That being said even federally backed loans are non judicial in Texas so there is no civil suit or court hearing required in Texas.
What Happens in a Foreclosure In Texas?
The foreclosure process in Texas is relatively straight forward because the paperwork was completed when you purchased the property or refinanced the property. A Deed of Trust is signed by the borrower when they take out the loan on the property then it is filed with the county clerk. This deed has a power of sale clause in it which allows the lender to file the foreclosure in the event of nonpayment. Some states will have a right of redemption clause which allow you to redeem the ownership of the property if certain terms are met after the property is foreclosed. Does Texas offer a right of redemption? In Texas the right of redemption is reserved for foreclosures that occur to delinquent taxes or HOA dues. The right of redemption clause does not apply to late payments on mortgages.
Foreclosure Help in Texas
Depending on your needs and your circumstances there can be a number of options for you to find the help you need to avoid foreclosure. When we work with others in your situation we will look at things like:
- Finance options and loan restructure
- Condition of the property
- Do they have a place to move to?
- How much time do we have to avoid foreclosure?
- Is the title fully in their name and is it free and clear?
J&A Home Buyers is a cash buyer here in Katy, TX but that doesn’t mean we buy every house we come across. We will often refer people who contact us to lenders, attorneys or a realtor to help them list their house on the MLS if we are not the best fit for their specific needs. We know that helping people is what local businesses are made of and helping people in a time of need is the RIGHT THING TO DO 100% of the time. We have multiple licensed realtors on our team which means we do background checks and we have a higher standard of ethics to uphold with the Texas Real Estate Commission Ethics and Conduct.
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