Texas House Foreclosure – Useful Information

Foreclosure takes place when the borrower is not able to pay the amount that he had agreed to pay on a loan. You should try to get the proper knowledge about the foreclosure before you enter into the process of foreclosure.

When the borrower is not able to pay the loan, he is termed as “in default.” The lender has the right to sell the property if the borrower is not able to pay the amount that he had contracted for on his loan. This would help the lender to get back the amount that he had given to the borrower. The lender has to follow some rules and regulations if he wants to foreclose a property. The following is the general process of foreclosure

1. Foreclosure should take place only when the borrower is not able to pay the amount that he has borrowed from the lender.
2. You should provide the notice to the homeowner which would give information about the foreclosure that is going to take place.
3. You should give some time to the borrower to pay the remaining amount of his loan.
4. You should follow the rules and regulations of the court.
5. you should follow Sheriffs sale method
6. You should give some rescue period to the borrower.

According to the Texas law if the borrower misses to pay then the lender has the right to force the borrower to pay the whole loan. But in other countries if the borrower misses to make the payments has to pay the remaining amount only and not the whole amount of the loan. Once the notice is issued to the homeowner, he only gets 20 days to pay his loan. If he is not able to pay within these 20 days then his property would be send to foreclosure.

Lenders can follow either the Judicial or Non-judicial method of foreclosure. Judicial foreclosure takes place when the “power of sale clause” is not mentioned in the agreement. In this method the judge has to take the decision of foreclosure. Non judicial foreclosure takes place when the “power of sale” clause is mentioned in the agreement.

After 20days the notice is given to the homeowner that his property would be sold at auction. The auction would take place near the court house and not at the side of the property.

The person who would bid high at the auction would get the ownership of the property. The ownership would be given to him even if the amount that he has bided is not equal to the amount of the mortgage. In this case the original owner has to pay the amount. He has to pay this amount to the lender as soon as possible. This is known as deficiency of judgment.

In Texas you would find different types of people like the big spender, loser etc. in Texas foreclosure takes place at huge scale. There are many reasons behind the foreclosure. The prices of the property is low because the lenders arte the owners and their main aim is to get their principal amount back.

Original: Texas House Foreclosure