Foreclosure is an unfortunate and scary process for homeowners. Foreclosure is a legal process, where a creditor (i.e. a lender or mortgage holder) can repossess or sell a property for the purpose of repaying the debt owed on that property. Mortgage holders can foreclose on a property any time after the borrower starts missing making payments, unless otherwise is set out in the mortgage or in the state where the property is located.
In Texas, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process. The judicial process of foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust.
When Does Foreclosure Begin?
The foreclosure process begins when you get behind on your mortgage payments (illustrated as 1PM on the foreclosure clock). If you have not been able to pay your mortgage for a couple of months, in some cases just a single month, the lender/bank will start sending you letters and make calls.
When this happens, you should try to work out a payment plan with the lender/bank or modify the loan immediately. You need to get up to date with your mortgage payments to stop the foreclosure process.
How Long Do You Have Before The Lender/Bank Takes Your Home?
According to the federal law, which regulates banking, you must be delinquent for 120 days before a lender can serve you with a notice of foreclosure. However, there are some independent lenders that do not fall under this law’s jurisdiction, and can begin foreclosure at any time after the loan goes into default.
At this point, pre-foreclosure starts (3PM on the foreclosure clock).
Notice Of Default And Acceleration Clauses
If the lender/bank chooses to proceed with foreclosure after the minimum delinquency period has passed, they will send you a “Notice of Default” (7PM on the foreclosure clock). This means that you have a specified time period to pay back what you owe, usually a legally mandated period of 20 days (occasionally up to 30 days).
Texas mortgage agreements often include acceleration clauses. The clauses give the bank the right to demand immediate payment of your entire balance, if you violated the terms of the loan.
If your mortgage includes an acceleration clause, and you go into default, your lender may ask you to pay off the remainder of the loan or face foreclosure.
How Long Do You Have Before The Auction?
If you have not yet managed to pay the amount due or modified your loan/s, your bank will send you a “Notice of Sale”. With this means, a written notice stating that the bank will sell your home at auction.
The foreclosure rules in Texas require a written notice of minimum 21 days before the bank/lender can sell your home. The bank/lender must also post the “Notice of Sale” at the door of your county courthouse and file it with the clerk of that county. The notice of sale must include; the location, date, and time of the planned auction/sale.
What Happens At The Foreclosure Sale/Auction?
In Texas, foreclosure auctions (9PM on the foreclosure clock) take place at the courthouse for the county in which the property is located. The proceedings are held on the first Tuesday of every month and may be scheduled any time between 10AM and 4PM.
A representative of the lending entity/bank must be present at the auction. State law permits the lender/bank to purchase the home as the highest bidder at auction. In bidding, the lender/bank receives as credit the value of any outstanding debt on the mortgage.
What Are The Consequences
There are many uncomfortable consequences for the homeowner after foreclosure is a fact:
- First of all, your credit will be completely damaged for 7 to 10 years – impacting your ability to get new housing, credit, and maybe even potential employment. Only on-time payments of three years or more will restore the credit score.
- A foreclosure on the credit report can make it difficult to rent a new home. A landlord’s opinion: Why would you pay the rent if you did not pay your mortgage payments? A bank loan is rarely even a question.
- There may be a deficiency balance after the foreclosure sale that you still owe.
- You will lose any relocation assistance or leasing opportunities that may be available with other options.
- Forfeit ability to get a Fannie Mae mortgage to purchase another home for at least 7 years (Fannie Mae guidelines).
- Most property owners do not realize that by losing their home to foreclosure, there are likely going to be tax implications.
- Many years of expensive and limited credit are the long term consequences of foreclosure, making financial recovery very difficult, if not nearly impossible. The components of a FICO score consist of payment history, amounts owed, length of credit history, new credit, and types of credit used.
We Can Help STOP Foreclosure!
You can always stop foreclosure by selling your home, but since the foreclosure process in Texas is so quick, it can be difficult to facilitate a traditional sale in time. To sell a home for retail value can take months – in most cases 3 months or longer – even up to a year. With a foreclosure notice, you do not have that time frame to sell.
This is where Texas Home Cash Buyer steps in and purchases your home FAST and As-Is (no repairs needed). We can catch up your back payments and save your credit – even improve your credit score.
You walk away with your credit intact and can move on with your life.
The sooner you contact us, the better, but we CAN stop foreclosure as late as the day before the auction.
We will try and make the transition to your new home as easy as possible. If we can help you in any way possible, we will. We are here to assist you in the unfortunate situation of foreclosure.
We CANNOT help you when your home already has gone to auction, so please contact us before this happens.
We understand that the foreclosure situation is overwhelming, and you may feel inclined to simply turn a blind eye to the proceedings, but please DON’T.
Why go through all hardships from foreclosure when we can help?
Call us today at (682) 730-0922 or email: email@example.com, so we can discuss your options.
At your service,