In some states, lenders are required to file a lawsuit in order to proceed with a foreclosure. This is referred to as a judicial foreclosure, and it can take many months or even more than a year in some situations, giving homeowners a great deal of time to fight back. Unfortunately, Texas is not one of those states.
In most cases, Texas lenders are able to conduct a nonjudicial foreclosure. They are able to foreclose on a home and take it back from a homeowner without filing a lawsuit. Homeowners can find themselves kicked out of their homes in a matter of months. They must act quickly if they want to prevent foreclosure.
When To Take Action
Even though the nonjudicial foreclosure process moves quickly, there are still numerous checkpoints along the way that are good opportunities to take action.
Late payment notices: Notices of late payments are often ignored. You may think that these are not a big deal. You may have plans to catch up soon. However, if you have gotten more than one of these, it might be a sign to take action. You can consult with an attorney to find out about options like loan modification, which could help you get caught up and prevent foreclosure before it even becomes a real threat.
Breach letter or notice of default and intent to accelerate: Depending on the terms of your mortgage, a breach letter may be sent to notify you that you are in default and telling you that you need to cure the default by a certain date, which is usually not less than 30 days from the date of the notice. Alternately, you may receive a notice of default and intent to accelerate, giving you not less than 20 days to cure the default. An acceleration clause requires you not only to cover the late payments, but to pay the entire balance of the loan. This makes matters challenging. The threat of foreclosure is definitely real, and you may want to contact a lawyer as soon as possible to review foreclosure defense options.
Notice of sale: This is the notice that your house is going to be sold in a foreclosure sale. You will receive it no less than 21 days before the sale. If you do not take action at this point, your house will be sold, and you could be on the hook for a deficiency judgment following the sale. Working with an experienced foreclosure prevention attorney, you may still be able to keep your home or at least review options for selling your home that will protect you from having to pay a deficiency.
As a general rule, the sooner you take action, the more opportunities there may be to avoid foreclosure. That being said, even if foreclosure is imminent, it is worth discussing the matter with a lawyer, because there may still be options.