Falling behind on a mortgage is frightening, and it is easy to freeze when the letters start arriving. The most important thing to know is that you usually have more options early than late. This guide explains how foreclosure typically works in Texas and what you can do at each step.
It is general information, not legal advice. If you have a sale date, talk to a Texas attorney or a HUD-approved housing counselor as soon as you can.
How foreclosure usually works in Texas
Most Texas home loans can be foreclosed without going to court, which makes the process faster than in many other states. For a home loan, the usual path looks like this:
- Missed payments. Under federal rules, a servicer generally cannot start the foreclosure process until a loan is more than 120 days behind. This is the time to act.
- Notice of default. For a residence, Texas law requires the lender to send a notice of default that gives you at least 20 days to catch up before it can move to a sale.
- Notice of sale. The notice of sale must go out at least 21 days before the sale date.
- The sale. Texas foreclosure sales are held on the first Tuesday of the month, at the county courthouse.
Your options, from earliest to latest
Call your servicer. Ask what options they offer. Depending on the loan and your situation, that may include:
- Reinstatement: paying the missed amount plus fees to bring the loan current.
- A repayment plan: spreading the missed amount over several months on top of your regular payment.
- Forbearance: a temporary pause or reduction in payments, often after a job loss or illness.
- A loan modification: changing the loan’s terms to make the payment affordable.
Talk to a free housing counselor. HUD-approved housing counselors help homeowners talk to their servicer at no cost. You can find one through the U.S. Department of Housing and Urban Development at 800-569-4287.
Sell before the sale date. If keeping the house is not realistic, selling it yourself before the foreclosure sale lets you pay off the loan and keep any equity, instead of losing it at auction. A foreclosure on your record can also make it harder to rent or buy for years.
Short sale or deed in lieu. If you owe more than the house is worth, the lender may agree to accept less than the full balance in a short sale, or to take the house back with a deed in lieu of foreclosure. Both need the lender’s approval and take time.
Watch out for foreclosure scams
- Never pay a fee up front to someone who promises to stop a foreclosure.
- Do not sign over your deed to anyone who says you can “rent it back” until things improve, unless an attorney you hired has read the paperwork.
- Make all mortgage payments to your servicer, never through a third party.
How we help homeowners facing foreclosure
When you reach out to Mercy Property Solutions, the first thing we do is talk through whether there is a way to keep your house. If selling is the right move, we work back from your sale date, and we can speak with your lender with your permission. You pay no fees or commissions, we cover the normal closing costs, and we often put more than one offer on the table, sometimes with terms that leave more money in your pocket than a plain cash sale.
One of our sellers in Crowley was a few weeks from foreclosure. In her words, “Her first priority was to HELP us, not make a buck.”
Want to know what your house would bring as it stands? See how we work, or call or text Savanna at 682-321-9138. There is no obligation, and if selling to us is not your best move, we will tell you what we would do instead.
