Foreclosure Education
Free, plain-English answers about the Texas foreclosure process — no email required.
The Foreclosure Process in Texas
Texas is a non-judicial foreclosure state, meaning your lender does not need to take you to court to foreclose on your home. Your lender can have your home auctioned without your consent, and in most situations you receive none of the proceeds from the sale.
Your lender is required by law to notify you by mail on two occasions. If the balance is not brought current after those notifications, the lender completes the proceedings and the home is auctioned to the highest bidder — on the first Tuesday of the month. Within about a month after the auction, if you have not vacated, the lender coordinates with law officials to remove any persons and possessions from the home.
Dallas–Fort Worth Foreclosure Facts
Missed mortgage payments are not the only reason foreclosure proceedings begin. Late payments for property taxes, homeowner association dues, and home insurance can also trigger foreclosure.
Bankruptcy, loan modifications, and other financial restructuring can delay foreclosure — but bringing all accounts current and paid in full is the only way to stop it. Most homeowners who complete a bankruptcy or loan modification without increasing their financial commitment toward the home face foreclosure again within a year, often with a significantly increased loan balance.
The Truth About Bankruptcy
Many homeowners consider bankruptcy as a way to remain in their home, but most who file find themselves facing foreclosure again very quickly. Your monthly mortgage payment can actually increase as a result. If you could not afford the payments before filing, you most likely still cannot afford them afterward unless your income increases.
Other consequences include a credit score that can fall below 500 — making it difficult to obtain a car loan, home loan, credit card, or even a rental for up to seven years — employment decisions that factor in bankruptcy filings, and the reality that not all debt can be discharged.
Negative Consequences of a Loan Modification
Many homeowners pursue a loan modification to delay foreclosure. Often the lender brings you current by placing a second lien on your home equal to the amount you were behind. A modification can also significantly increase your total loan payoff with penalties, legal fees, and a lengthened lending period — and usually results in a higher monthly payment.
Critically: during the modification trial period, missing a single payment by a single day can allow your lender to move forward with foreclosure immediately. A modification that is only “in process” does not move your auction date.
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