Foreclosure is a legal process that allows your lender to take ownership of your home if you fall behind on mortgage payments. Texas law offers some protections to homeowners, but the process moves quickly, so it’s common to feel blindsided and overwhelmed.
If you’re struggling with missed mortgage payments and worried about foreclosure in Plano, the foreclosure attorneys at Toronjo & Prosser Law can help. Contact us today for a free consultation to get the legal support you need.
The Foreclosure Process in Texas
Texas allows two types of foreclosure: judicial and nonjudicial. Judicial foreclosures require the lender to file a lawsuit and get a court order before selling the home. Nonjudicial foreclosure, the most common type, follows a faster process under state law.
The process begins when you miss mortgage payments. Texas law requires lenders to follow specific steps before they can sell a home at a foreclosure sale. After 120 days, the lender can start foreclosure by sending a notice of default and intent to accelerate. This notice gives you at least 20 days to catch up on payments. If you do not pay by then, the lender sends a notice of sale at least 21 days before the foreclosure auction.
Foreclosure sales happen on the first Tuesday of the month at the county courthouse. The highest bidder wins the home. If the sale brings in more than you owe, you can claim the extra money. If it sells for less, the lender could seek a deficiency judgment against you.
Legal Options for Fighting Foreclosure
Borrowers facing foreclosure have several options to stop or delay the process. One option is loan reinstatement, which allows you to pay the overdue amount within a set time to bring the loan current. Texas law gives you at least 20 days after receiving a notice of default and intent to accelerate to reinstate a loan.
Another option is a loan modification, which changes your loan terms to make payments more affordable. You can apply for this before the foreclosure sale. If approved, your lender could lower your interest rate, extend your loan term, or simply add missed payments to your balance.
Some borrowers choose to file for bankruptcy. Chapter 13 bankruptcy allows homeowners to catch up on payments over time while keeping their homes. Chapter 7 bankruptcy can delay foreclosure but does not provide a long-term solution. A lawyer can help you understand your options based on your unique financial situation.
Home Equity Loan Foreclosures
Foreclosures on home equity loans in Texas follow a different process. Lenders must get court orders before they can proceed. This step, called a quasi-judicial foreclosure, adds legal protections for borrowers.
Lenders seeking home equity loan foreclosures must file foreclosure applications in court and send copies to you. Then, you have 38 days to respond. Your response can challenge the lender’s claims, such as disputing the default amount or proving payments were made. If you do not respond, the court could approve the foreclosure without a hearing.
If the court grants the lender’s request, the foreclosure sale follows the nonjudicial process. However, Texas law prevents lenders from seeking deficiency judgments after home equity loan foreclosures. This means you would not owe anything beyond the foreclosure sale.
Deficiency Judgments and Borrower Protections
If your home sells at a foreclosure auction for less than you owe on your loan, your lender could seek a deficiency judgment to recover the remaining balance. Texas law allows deficiency judgments, but it also gives borrowers certain protections in these proceedings.
Lenders must file deficiency judgments within two years of foreclosure sales to collect deficiencies. You can challenge the amount by proving that your home’s fair market value was higher than the sale price. If the court agrees, it will reduce your debt by that difference.
If you have a home equity loan, you will not face a deficiency judgment after foreclosure. Texas law prevents lenders from collecting any remaining debt after a home equity loan foreclosure. You should carefully review your loan type and sale details with a knowledgeable attorney to determine your rights if you are facing foreclosure.
Military Foreclosure Protections
Active-duty servicemembers are entitled to foreclosure protections under the Servicemembers Civil Relief Act (SCRA). This federal law protects military personnel who face foreclosure while on active duty.
Under the SCRA, lenders cannot foreclose without a court order if your mortgage was taken out before your active duty began. This rule protects servicemembers from losing their homes while serving. The court can delay foreclosures if military service affects your ability to make payments on your loan.
The Texas Property Code also requires foreclosure sale notices to include a disclosure for servicemembers. You must notify your lender if you qualify for SCRA protections. If a lender forecloses illegally, you could challenge the sale in court. You could also qualify for loan modifications, repayment plans, or other relief options as a military homeowner, so you should speak with your loan servicer if you face financial hardship.
The Importance of Legal Representation in Foreclosure Cases
If you are facing foreclosure in Plano, you should seek legal guidance to explore your options. A lawyer can help you by negotiating with lenders, identifying legal defenses, and challenging improper foreclosure actions.
Lenders must follow strict legal procedures during foreclosure. Mistakes in notices, loan servicing, or sale processes could create legal grounds to delay or stop a foreclosure. A lawyer can review these details on your behalf and take action if necessary.
An attorney can also help you explore foreclosure alternatives like loan modifications, bankruptcy, or short sales. You should act quickly and seek legal help if you receive a notice of default or notice of sale. Delaying action could limit your available solutions.
Contact a Foreclosure Attorney in Plano
Foreclosure can move fast, but you still have options. The sooner you take action, the more choices you might have to protect your home or reduce the financial impact. The foreclosure attorneys at Toronjo & Prosser Law can provide the legal representation and guidance you need. Contact us now for a free consultation to get answers to your questions and take the first step toward protecting your future.