- Here's what you need to know about foreclosure in Texastexas map image by Vladislav Gajic from Fotolia.com
Foreclosure is a reality for a great many people in the state of Texas, as it is in every other state in the union. Foreclosure will allow banks to take the home of someone who owes money to them for a home loan. However, there are certain rules governing what the banks may do when they foreclose on your home in the state of Texas. - Texas allows lenders to choose whether to sue (judicial foreclosure) or to simply seize a person's home (nonjudicial foreclosure). These two choices allow lenders some flexibility, because, under judicial foreclosure, they can potentially seize additional assets from the borrower to cover the difference between the sale price of the home and the amount still owed.
Under nonjudicial foreclosure, there is no need to formally sue the defaulting homeowner. The lender simply needs to file the paperwork with the court to foreclose on the home. However, a nonjudicial foreclosure typically means that the lender can only recover the value of the home being sold and cannot claim other assets owned by the debtor. - Before a lender can even begin the procedure to foreclose on a home, notice must be provided to the debtor in writing, allowing him at least 20 days to pay the bill in full. The notice must mention the intent to foreclose as well. The lender is entitled to begin foreclosure proceedings after just one missed payment by the borrower.
- At least 20 days after the initial notice has been served to the debtor, the lender must serve notice of pending sale of the property, with at least 21 days' notice to the county clerk, the borrower and the county court where the sale of the home will take place.
- The sale must take place on the first Tuesday of the month at the courthouse, between 10 a.m. and 4 p.m. The debtor is allowed to bid as well. Not only that, but the debtor is also given a credit for the amount of debt that is still outstanding on the home.
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