Texas Foreclosure – What Proceedings Occur in Texas?
Texas foreclosure proceedings consist of two kinds – judicial foreclosure and nonjudicial foreclosure. The difference between them is that with the judicial foreclosure, the matter is dealt with through the courts. This occurs because there’s no-power-of-sale clause in the mortgage or deed of trust so the lender can obtain a court order to have the property foreclosed if the borrower gets behind in a payment and defaults on the loan. Once the court order to foreclose has been obtained, then it’s just a matter of the property being advertised and put up for public auction and being sold to the highest bidder.
With nonjudicial foreclosures the matter can be settled out of court because of the power-of-sale clause that’s in the deed of trust. If the borrower defaults on the loan, the lender sends them a letter of demand telling them they have twenty days to pay the outstanding payment, otherwise proceedings for foreclosure will be put into effect. If no payment is forthcoming the lender can them start proceedings for foreclosure by making use of the “acceleration” clause in the deed of trust and requesting the entire loan balance be paid.
With a Texas foreclosure sale, the lender must file a foreclosure notice with the county clerk three weeks before the foreclosure sale date. In addition to this, they must post it on the county courthouse door and mail a copy of it to the borrower three weeks before the foreclosure sale. The property is then sold off at public auction with the property going to the highest bidder. Texas foreclosure sales are conducted once a month, the first Tuesday, from 10 am til 4 pm. Payment must be in cash and the lender is able to bid as well.
In October 2008, Texas foreclosure postings numbered 9,900 (up 7.7% from September) so there are plenty of opportunities for purchasing properties at greatly reduced prices in this state.
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