Are you a homeowner in Texas facing foreclosure? If so, you may be experiencing anxiety, confusion, and frustration. Losing your home can be terrifying, but you are not the only one who feels this way. Every year, thousands of Texas homeowners face foreclosure, but there are resources available to assist you.
This blog post provides an overview of the foreclosure process in Texas, as well as some tips on how to protect yourself and your loved ones.
What is a Foreclosure, and How Does it Work in Texas?
Foreclosure is the result when a lender seeks to collect unpaid loan balances from a delinquent borrower. As a general rule, federal law prohibits foreclosures until 120 days after your mortgage is past due. There are, however, some exceptions.
How to Avoid Foreclosure
If you want to avoid the foreclosure process, you can do a few things. Contact your lender and request a payment plan as your first step. It is not uncommon for lenders to help out homeowners who are having difficulty if they come forward.
A HUD-approved housing counselor or foreclosure prevention specialist might also be able to guide you. A professional can help you better understand your options and devise an effective plan.
The Foreclosure Process in Texas
Your lender may foreclose on your property either judicially or nonjudicially if you default on your mortgage payments in Texas.
Judicial Foreclosures
Lenders initiate judicial foreclosures by filing lawsuits asking courts for orders allowing foreclosure sales. In the absence of a written response from you, the lender automatically wins the case. In the event that you defend the foreclosure lawsuit, the court will consider the evidence and determine the winner. If the lender wins, the judge will order an auction of your home.
Nonjudicial Foreclosures
In the case of a nonjudicial foreclosure, the lender must follow the state statutes regarding out-of-court procedures. Once the lender has completed this process, the home can be sold at a foreclosure sale. In most cases, lenders prefer the nonjudicial process because it is quicker and cheaper than litigation.
How to Stop or Delay Foreclosure
If you’re having a tough time making your mortgage payments, it may seem as though there is no way out of foreclosure. However, there are ways to avoid foreclosure even when it’s already begun.
Reinstate Your Loan
Under Texas law, the borrower can prevent a nonjudicial foreclosure by “reinstating” the loan (paying the overdue balance) within 20 days after receiving a notice of default. In addition, most deeds of trust provide additional time for reinstatement. For more information on how much time you have to reinstate, check your loan documents.
Redeem Your Property
Foreclosed borrowers in some states can also buy back their homes after the foreclosure sale through a redemption period. However, in Texas, there is no redemption period after a sale.
File for Bankruptcy
Despite its shortcomings, bankruptcy can protect you from foreclosure. When a bankruptcy is filed, the automatic stay prevents the lender from collecting a debt or foreclosing.
Sell Your Home
Selling your home may be an alternative for you if you’re facing foreclosure. The sale proceeds can be used to pay off your loan and prevent foreclosure.
What if Foreclosure is Inevitable?
The damage caused by foreclosure can still be minimized, even if it is inevitable. To have more time to find a new home, you should remain in your house until the foreclosure is complete.
Legal advice should also be sought if you are considering taking any action. An attorney can help you understand your rights and options to achieve the best outcome.
No one wants to think about the prospect of foreclosure, but if it happens, it’s essential to know what to do. When you understand how foreclosure works, and learn about state laws and your options, you can make an informed decision.
What are the Drawbacks of Foreclosure?
Homeowners and communities can suffer adverse effects from foreclosures. It may be difficult for homeowners with damaged credit scores to find new housing after a foreclosure. Also, it can make it harder for you to get a mortgage or rent an apartment. Homelessness can also result from foreclosures when affordable housing is unavailable.
Communities can also be negatively affected by foreclosures. Unattended vacant or abandoned homes can reduce property values and create safety hazards. Crime rates are also bound to increase as criminals target vacant homes.
Resources for Homeowners Facing Foreclosure in Texas
If you are facing foreclosure in Texas, several resources are available to you. The U.S. Department of Housing and Urban Development offers homeowners counseling and assistance to prevent foreclosure.
Sell Your Home Fast & Avoid Foreclosure in Texas Today
Foreclosure can be very stressful and challenging, and it could severely damage your credit, compromising the future of your finances. With the help of your trusted Texas home buyer, you can avoid foreclosure and restore your peace of mind.
We buy houses in any condition at Favor Home Solutions and offer cash offers so you can get back on your feet ASAP. Get in touch with us today for more information about how we can assist you through this challenging time!
