FORECLOSURES IN TEXAS

Texas Statutes, Title 5, Section 51.002

Judicial Foreclosure Available: Yes

Non-judicial Foreclosure Available: Yes

Non-judicial foreclosure proceedings are permitted in Texas, provided there is a power of sale clause in the trust deed.  If the power of sale clause specifies the time, place and terms of sale, then the specified procedure must be followed.  Otherwise, the non-judicial power of sale foreclosure is carried our as follows:

Preliminary Notices: Non-judicial Foreclosure

Notice of Default: A written 30 day Notice of Default (and the opportunity to cure) and Intent to Accelerate is given to each borrower and each party in the chain of title and to the property address and the last known address as shown by the lender’s records by certified mail, return receipt requested and U.S. first class mail postage prepaid.  The lender must mail the borrower a letter of demand, informing the buyer that they have 20 days to pay the delinquent payments or foreclosure proceedings will begin. 

Cure:  The borrower has up to 20 days before the foreclosure process begins to cure the default by paying the past due payments.

Notice of Acceleration and Sale: If the borrower fails to pay after the 20 day period has expired, written Notices of Acceleration and Sale are sent at least 21days prior to the next available sale date (the first Tuesday of each month) (“Texas Tuesday”). 

Posting:  The Notice of Sale is posted at the place designated by the County Commissioner, filed with the County Clerk, and mailed to the borrower’s last known address.    

Sale Procedures:  The sale will be a public auction held on the courthouse steps, and will be held on the first Tuesday of any month, even if that Tuesday is a legal holiday.  The lender may bid by canceling all or part of the outstanding loan balance, and in the absence of any higher bids, take title to the property.  

Deficiency: The lender may obtain a deficiency judgment, limited to the difference between the sale amount and/or fair market value and the outstanding loan balance.