But while foreclosure can seem terrifying and completely out of your control, it is important to know and understand foreclosure laws in order to set your expectations and protect yourself and your property as much as possible.
First of all, it is important to understand that foreclosure is the process a mortgage lender must take in order to gain possession and sell a home when the borrower has defaulted on the loan. Basically, this means that the lender that provided the loan for the home is no longer receiving sufficient payments on the loan and must take action to secure their funds. The best action for the lender is then to try to get their money back by selling the home through a foreclosure auction. The foreclosure process must be followed carefully and is outlined below.
Notice of Default
In the state of Texas a homeowner must be given 20 days to pay the full amount owed before a foreclosure process is initiated. The Default Letter must clearly outline the total amount due and the date it is due by. This provides you with the information and time frame you need to try to address the problem within the time frame allotted, or explore alternative options.
It is also important to note that depending on the investor or insurer guidelines, the servicer may have to extend the time frame in order to honor those pre-determined guidelines, giving you more time in the property.
Begin Exploring Options
Just because foreclosure has been threatened, doesn’t mean you have no other options outside of paying the amount or foreclosure. In fact, you may qualify for several options that would be less stressful and problematic to your credit score and living situation as a foreclosure would. This includes a deed in lieu of foreclosure, a short sale, or possibly selling your house fast for cash.
Foreclosure Sale Scheduled
If the borrower does not pay within the 20 day time frame, or take alternative steps to avoid foreclosure, the next step is for the lender to begin the process by scheduling the foreclosure sale. The lender must post the notice of foreclosure at the courthouse, file the notice with the county clerk, and notify the borrower of the date and time of the foreclosure sale.
Also, in the state of Texas, foreclosure sale must be made on the first Tuesday of any month. This is only after all notices have been given.
The sale is an auction which results in the highest cash bidder purchasing the house. The lender may also bid on the house, which would cancel out the balance due on the note, or at least some part of it. Once the auction is complete, the sale is finalized and the new owner may proceed with the property as desired.
The key to foreclosure is not to run and hide the moment it comes to your attention, but instead to take action. Consider your other options so that you don’t have to go through the painful foreclosure process.
Looking to avoid foreclosure? Local Cash Buyers will take over your payments and pay the mortgage up to date, helping you avoid the repercussions of foreclosure. Contact us today by calling 469-701-1666 or filling out our online form.