If you receive a foreclosure notice, the most important thing you can do is respond—immediately. The foreclosure process can work differently depending on your unique mortgage agreement, but, in all cases, it can occur quite rapidly. Most foreclosures are complete within 2 months, from the initial demand letter to the auction.
How Does Foreclosure Work in Texas?
In Texas, foreclosure may be either judicial or non-judicial. If your mortgage or deed of trust has no “power of sale” clause, the foreclosure process will be judicial, meaning your lender will need to sue you to obtain a foreclosure order from the court. Once they obtain this order, they will auction off your home. The required lawsuit in the judicial process gives you slightly more time and a greater opportunity to defend your home. If you don’t respond to the lawsuit, however, the court will more than likely grant a judgment against you.
If your mortgage or deed of trust DOES have a “power of sale” clause, the foreclosure process will be non-judicial. Your lender will not need to go through the court system because the clause authorizes them to sell your property and recover what’s due if you default on your mortgage payments.
Unless the “power of sale” clause outlines the foreclosure process, your lender will follow these steps:
- Mail you a letter of demand and an explanation that you have only 20 days to pay delinquent payments before they initiate foreclosure
- File a foreclosure notice with the county clerk, send it to you in the mail, and post it on the county courthouse door
- Proceed with the foreclosure sale no less than 21 days after filing the notice
Texas is one of roughly half of the states that can use the non-judicial foreclosure process. Because every contract is different, you will need to fully understand yours to know what to expect if you default on your mortgage payments.
What Is an Acceleration Clause?
Many mortgage agreements contain acceleration clauses. An acceleration clause authorizes the lender to demand full payment of the loan in certain circumstances. If the borrower cannot come up with the entire balance, the lender can foreclose and sell their home.
The way an acceleration clause is triggered depends on the specific language in your contract. Some allow the lender to demand the full balance if you miss just one payment, while others allow you to miss several before triggering the clause. It may even hinge on your credit score. For example, if your score falls below a certain level, your lender can demand the full balance and foreclose your home if you can’t pay.
Assessing Your Foreclosure Defense Options
Saving your home may require one of several strategies. Ultimately, you will need to work closely with a qualified attorney to select and implement the solution that is right for your situation.
You may be able to defend your home against foreclosure through:
- Deed in lieu of foreclosure
- Short sale
- Mortgage modification
- Legal injunction
- Repurchasing the property during the auction
Each of these potential solutions has its own advantages and drawbacks, and some may work significantly better for you than others. As previously stated, the most powerful tool you have is urgency—the sooner you retain counsel, respond to the notice, and select a defense strategy, the higher your likelihood of success.
For more information about foreclosure or to begin building your defense today, call the Campbell Law Firm at (903) 345-0031 or contact us online today. If you would like a remote consultation due to COVID-19, we are more than happy to accommodate you with over-the-phone or video chat services.