Brief Lesson On Foreclosure Procedures In Texas
Are you facing foreclosure or looking for information to help someone who is? Many people struggle with foreclosure, so you’re not alone. The laws and procedures for each state are different, but this is how foreclosure works in the state of Texas.
The first step in the foreclosure process is, obviously, going through foreclosure. In the first 90 days of being behind on payments, you are what they call delinquent on payments. After day 90, you are now in default of the loan. This is when a substitute trustee deed is filed. Under Texas law, a lender may allow the mortgage servicing company, which handles payments from the borrower, to appoint a substitute trustee. Sometimes known as a foreclosure deed, a substitute trustee deed is a deed held by a person appointed by the mortgagee or mortgage servicer to exercise the power of the sale. It’s a deed to your home that is given to a third party who ensures that the foreclosure is fair and impartial. The bank is often not prepared to carry out court filings, attend hearings or gather foreclosure paperwork and will turn those tasks over to a law firm by substituting the attorneys as trustees.
Now that the bank has appointed a law firm to act as the substitute trustee, they begin handling the collection and foreclosure. You will start receiving attorney’s fees that start piling on, so make sure you communicate with the lender throughout the process instead of ignoring the problem. You don’t want a small amount of money owed to snowball into something you just can’t manage anymore. In Texas, foreclosure can sneak up on you much faster than in other states. It is one of the most efficient states for foreclosure in the nation, so you must stay up to date with your lender. In Texas, foreclosures are only held on the the first Tuesday of each month. According to law, your lender only has to give you notice 21 days ahead of the foreclosure.
If you aren’t able to stop your foreclosure in the ways we’ve outlined before, then your home will eventually go to auction. The auction is held neither at the bank nor your home, but with a contract auction site. These auctions often attract many eager investors looking to make a tidy profit. These work just like any other auction you might have seen on television, the auctioneer opens bidding with a minimum bid and investors either meet the bid or drop from the auction.
If at this point the investors fail to bid the minimum required amount to satisfy the debt, then the banks buy back the home and it becomes an REO. Banks aren’t in the business of owning homes and it’s not in their best interest, so they try to avoid this at all costs. By this point in the process they have already spent thousands in lawyers fees and upkeep fees, so the last thing they want is to hold onto a property that drains more and more resources. That’s why they rarely allow themselves to get caught in this situation, and so they let homes go at auction for very low bids.
Don’t Give Up
If you’re facing foreclosure, it can be hard but you must keep your head on straight. If you read some of our other posts about the topic, you’ll see that there are many ways out and you may not be as trapped as you think. If you’re really underwater, take this opportunity to work with an investor like ShapeUp Homes so you can downsize and bring your financial house back in order. We want to help, but we can’t do that until you call.
No problem is too big and we’ve probably seen it all, so call today 210-441-4233.