What is a foreclosure?
Foreclosure is a process that allows the lender to take over the property when a homeowner defaults or falls behind on mortgage payments. This can be due to hardship or strategic default, which is defined below:
can include (but not limited to) job loss, reduce working hours or pay rates,
unexpected large bills (e.g. medical bills), heath, divorce, some unexpected events, etc
is the case when the homeowner may be able to pay the mortgage but simply chooses to walk-away from the mortgage. This is often done when the homeowner owes more on the home than it’s worth.
The Foreclosure Process:
Foreclosure is a process and not a product (e.g., it is not a house, nor a land, etc.). There are three phases of foreclosure from the time a homeowner defaults to the time the lender or Bank sells the property. These phases are pre-foreclosure, foreclosure at court-step, and post-foreclosure also known as REO (Real Estate Owned by bank).
Pre-foreclosure Process (Phase 1)
Notice of Sale (Foreclosure Timelines)
When a homeowner falls behind on mortgage payments,
the lender will send a series of notices to the
homeowners allowing them to correct the problems,
otherwise its’ intention to sell the property at
auction. Each State has different rule and
regulations regarding the minimum number of days
that the bank needs to notify homeowner before it
forecloses the property and how to conduct
foreclosure sale. Below are the rules for foreclosure timelines and conduct of sale for
foreclosure Sale in state of Texas.
Property Code 51.002 these notices must give minimum
number of days to the homeowner prior its action.
Notice of Default (minimum
Notice of Acceleration
(minimum 20 days)
Notice of Sale (Sometimes
combined with #2 above)
Minimum 21 days.
Posted at Court House
Mailed, certified Return
Receipt Requested, to debtor with address on Deed of
Filed with County Clerk
Foreclosure Process (Phase 2)
Conduct of Sale
If the problem has not been resolved between the lender and homeowner prior to the date and time of the sale, the property will be auctioned and awarded to the highest bidder. Each State has different rule and regulations regarding how and where to sell foreclosure properties.
Below are the specific rules and regulations regarding how and where to sell foreclosure properties in Texas.
Place of Sale: At
designated spot in County Court House
Day of the Sale: 1st
Tuesday of the month whether or not it falls in the
weekend, holiday, new year, 4th of July, or weather
Time of Sale: 3 hours
window Between 10:00 AM-to-1:00 PM and 1:00
PM-to-4:00 PM as posted
Method of Payment: Exact
amount with Cash, Certified cashier check/money
order, or combination of all.
Conduct of Sale: There are
two types of foreclosure process in Texas,
Judicial and non-judicial. Each one is
define in detail as follow:
process in Texas:
This type of foreclosure must be with court approval
and conducted by Sheriff and the homeowner might
have rights of redemption for a period of time.
Judicial foreclosure applies to the following types
This type of foreclosure is conducted
by Sheriff and
the homeowner has rights of redemption as follow:
(Therefore if you buy Tax Sale foreclosure you
should not immediately list it for sale)
Rights of Redemption
Two (2) years if: the property is homesteads,
agriculture exempt, has minerals.
Six (6) months for other cases
Home equity liens
Certain Military Debtors
Non-Judicial foreclosure process in
Texas: (Typically Deeds of Trust)
This type of foreclosure is conducted by
Trustee/Substitute Trustee and controlled by Texas
Statutes and terms of the Deed of Trust. There is no
Right of Redemption for these types of foreclosure.
Post-foreclosure Process (Phase 3): Property goes back to Bank, Real Estate Owned (REO)
If the property is not sold in auction, as described above, it goes back to the lender or Bank. After that point, the property will be known as
REO (Real Estate Owned by bank or lender) and will be listed in MLS, by an authorized licensed real estate agent, to be sold. This is the type of property that most of purchasers, by mistake, refer to as foreclosure.
to see the process and procedures from Banks to Sell
their foreclosed Properties.
List of Foreclosure (REO) Properties in North Texas
For the most up-to-date list of foreclosures (REOs) in North Texas, please visit