What is the Texas Foreclosure Process?

Texas Foreclosure Process | Timeline

Borrower has defaulted on payments to the lender for multiple months (usually 3-6 months in arrears).

Lender sends the borrower a ‘Letter of Acceleration‘. The letter of acceleration lets the borrower know that the loan is in default and if this default is not cured in 21 days, the full value of the note will be accelerated.  This acceleration notice makes sense because the lender can only collect on the defaulted amount, so if the lender does not send this letter, then they are only allowed to foreclose on the current amount in default.  The letter of acceleration must be sent at least 21 days prior to notice of foreclosure.

If the homeowner has not cured the default within 21 days, then the lender sends the borrower the ‘Notice of Foreclosure’.  The notice of foreclosure is a notification document to the public of foreclosure proceedings where property is being repossessed by the lender.  The notice of foreclosure must be sent to the homeowner within 21 days of the notice.  The notice contains the time and the place that the ‘trustee’ will auction the real estate.  During this 21 day period, the owner can still cure the delinquency of the debt.

If the owner has not cured the delinquency, then the property is sold at auction.  The lender has a credit for the amount of the note at the auction.  The property becomes banked real estate owned, or REO property if the winning bidder is the lender.

In Texas, all auctions are held on the first Tuesday of every month, regardless of whether or not this day falls on a holiday.