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Judicial foreclosure available: Yes
Non-Judicial foreclosure available: Yes, (using the
power of sale clause in a deed of trust)
Preliminary Notices
Twenty-Day Demand Letter
The lender must mail a residential borrower a demand
letter giving the borrower 20 days to come up with all the missed payments
before proceeding with a foreclosure or sending the 21-day notice.
Twenty-One-Day Foreclosure Notice
The trustee must send a foreclosure notice stating the
date, place and earliest
Method of Giving Notice
Advertising: Texas does not require preliminary
advertising of the foreclosure in a newspaper.
Posting
Texas requires a foreclosure notice to be posted at the
county courthouse door 21 days before foreclosure.
Recording/Filing
Texas requires a foreclosure notice to be filed with the
county clerk 21 days before foreclosure.
Mailing
A foreclosure notice must be
mailed to the borrower at the last known address as shown in the records of the
lender 21 days before foreclosure.
Sale Procedures
The foreclosure sale must take place on the first
Tuesday of any month, even if it is a holiday such as the Fourth of July or New
Year's, but only after the proper preliminary notices have been given. The sale
is on the courthouse steps by auction to the highest bidder for cash. Lenders,
however, can bid by canceling out the balance due on the note, or some part of
it. There is no organization to the sales. The trustee named in the deed of
trust simply shows up and calls out the property for sale. The trustee or a
lender representative then bids for the lender. Investors must find the trustee
in a noisy crowd to bid against the lender. The title is transferred by means
of a trustee's deed.
Redemption
There is not right of redemption in Texas.
Deficiency
Texas now limits deficiency judgments to the difference
between fair market value and the balance owed on the loan, although the
borrower may have to give evidence about the market value to be sure the
deficiency is kept to a minimum.
Unusual Features
Texas is a very simple state in which to foreclose.
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