Real estate foreclosures in the state of Texas can take place judicially or non-judicially. In comparison with many other States of the USA, the procedure for Texas foreclosures is very easy and the entire process is done at very fast pace. The entire process of foreclosure can be completed within two to three months.

The mortgage or the Deed of Trust can include within it a clause stating the power-of-sale, using which the lender can exercise the right to foreclose the debt and offer the property in sale for recovery of the dues, in the event of a default by the borrower. In the absence of such a clause, the borrower has to file a lawsuit against the borrower and obtain an order of sale from the Court to foreclose the property. The property can be scheduled for sale in public once the declaration for foreclosure is issued from the court.

In Texas, however, more foreclosures are accomplished non-judicially. This means that a large number of mortgages contain the power-of-sale clause in favor of the lender. Before the Texas foreclosure process can be commenced, the lender has to notify the borrower, by mail, the default of payment and permit a minimum period of 20 days so that the borrower is able to make payment for the default amount on the mortgage.

If the borrower fails to respond to the initial notice within the said 20 days, the lender can commence the foreclosure procedure by issuing the borrower another second letter stating that the entire loan is immediately due and that the lender shall schedule a sale for the recovery of the entire dues.

The notice of the foreclosure sale shall be posted by the lender on the county courthouse premises, and shall file a notice of foreclosure with the county clerk within a period not less than 21 days from the date the Texas foreclosure sale is scheduled. The lender shall also send by mail a foreclosure notice copy to the borrower, to the borrower's last known living address, within a period not less than 21 days of the date of the sale.

The foreclosure laws of Texas do not necessitate the publication of the notice of foreclosure sale in any of the local newspapers.

All the foreclosure sales in the State of Texas are held on the first Tuesday of each month from between 10 a.m. to 4 p.m., irrespective of whether the day is a holiday or not. The place of auction is normally within the Texas county courthouse premises. The foreclosure sale is a public auction and all members of the public including the lender are eligible to bid.

The foreclosure sale shall be awarded in favor of the highest bidder in the auction. The prized bidder is required to pay the entire bid amount immediately in cash. However the trustee can permit some the payment of the entire amount within a specific time period on the same day as the sale for the prized bidder.

The transfer of ownership of the property to the prized bidder shall be done by the trustee. Such transfer of ownership shall be free from Junior or subordinate liens, but shall be subject to existing senior liens.

In the event of any surplus generated during the sale, after the discharge of the debts to the lender, the amount is utilized for discharging the junior lien holders.

In the State of Texas, the borrower does not have the right to redeem the property once the sale is concluded in favor of the highest bidder.

If you need more information about Texas foreclosure laws, you should contact a foreclosure lawyer, or contact us so we can recommend one for you.