Legal Steps to
Foreclose on a home in Texas
This page is based on information provided as a service of the National
Consumer Law Center and the Federal Trade Commission.
In Texas, lenders
may foreclose on deeds of trusts or mortgages in default using either
a judicial or non-judicial foreclosure process.
process of foreclosure, which involves filing a lawsuit to obtain
a court order to foreclose, is used when no power of sale is present
in the mortgage or deed of trust. Generally, after the court declares
a foreclosure, the property will be auctioned off to the highest
process of foreclosure is used when a power of sale clause exists
in a mortgage or deed of trust. A "power of sale" clause is the
clause in a deed of trust or mortgage, in which the borrower pre-authorizes
the sale of property to pay off the balance on a loan in the event
of the their default. In deeds of trust or mortgages where a power
of sale exists, the power given to the lender to sell the property
may be executed by the lender or their representative, typically
referred to as the trustee. Regulations for this type of foreclosure
process are outlined below in the "Power of Sale Foreclosure Guidelines".
Power of Sale
If the deed of trust or mortgage contains a power of sale clause
and specifies the time, place and terms of sale, then the specified
procedure must be followed. Otherwise, the non-judicial power of
sale foreclosure is carried out as follows:
to proceeding with a foreclosure, Texas laws state that the lender
must mail the borrower a letter of demand, informing the buyer he
has twenty (20) days to pay the delinquent payments or foreclosure
proceedings will begin.
point after the borrowers twenty (20) days have expired, but at
least twenty one (21) days before the foreclosure sale, a foreclosure
notice must be: 1) filed with the county clerk; 2) mailed to the
borrower at their last known address; and 3) posted on the county
sale must take place on the first Tuesday of any month, even if
said Tuesday falls on a legal holiday, 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. Anyone may bid,
including the lender, who bids by canceling out the balance due
on the note, or some part of it.
obtain deficiency judgments, but they are limited to the difference
between the fair market value of the property at the time of sale
and the balance of the loan in default.