Loan modification, pre-foreclosure sales and bankruptcy are all ways you can stop Texas home foreclosure.
If you need to stop Texas home foreclosure, there are steps you can take to save your home. These steps include, but are not limited to, selling in pre-foreclosure, modification and bankruptcy.
Texas has the shortest foreclosure period of any other state in America. The foreclosure process is swift and straightforward, because Texas is a power of sale state, meaning all foreclosures are non-judicial, the court system is not involved. As a result, you may have less than a month before your home is foreclosed and sold. Texas has thousands of homes in foreclosure and thousands more in pre-foreclosure.
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Once you are behind on your mortgage, you will receive a Notice of Default (NOD), which is your notification that you have 20 days to make a payment before you receive a Notice of Sale (NOS). The NOS states that your home will be sold at a foreclosure auction the first Tuesday of the following month.
Loan modification
Before the sale, you can request a loan modification, which would stop the foreclosure and the sale of your home. A loan modification is a change in the terms of the loan that allows you to make payments that you can afford. You can ask your lender about internal loan modification programs it has and talk to a U. S. Department of Housing and Urban Development (HUD) counselor about the many modification programs available through the Making Home Affordable (MHA) Program. If you qualify for a HUD modification, you can stop Texas home foreclosure during the modification process.
If your mortgage payments are in arrears because of unemployment, you can stop your Texas home foreclosure by requesting forbearance from your lender. Forbearance will suspend your payments temporarily. If the lender does not have a forbearance program, MHA does.
Refinancing and short sales
Two other options available through MHA, and possibly your mortgage lender, are refinancing or a short sale. Refinancing may be difficult if you are too far behind on your payments. The MHA also has refinancing programs for homeowners that are underwater on their mortgages, meaning you owe more than your home is worth.
You may also qualify for the MHA short sale program or a short sale program through your bank or lender. In a short sale, your mortgage lender allows you to stop Texas home foreclosure by selling your home for less than the balance you owe on it because the home’s worth has dropped significantly. If your lender agrees to a short sale, it will likely postpone the foreclosure auction.
Texas lenders try to work with homeowners because they have so many foreclosed homes to sell already. The sooner you talk to your lender, the more likely you are to stop Texas home foreclosure.
Bankruptcy
In a worst-case scenario, you can stop Texas home foreclosure by filing for bankruptcy. Meet with a bankruptcy attorney to discuss your options and what will happen to your home if you file. In some bankruptcies, you will still be responsible for your mortgage.
The Texas Young Lawyers Association and the State Bar of Texas has developed a "Facing Foreclosure" booklet to help you understand Texas law regarding the foreclosure process. In addition, the Texas Foreclosure Intervention Resource Guide contains information for homeowners facing foreclosure. It is available in English and Spanish and was written by the Texas Foreclosure Prevention Task Force.
You can stop a Texas home foreclosure by talking candidly to your lender and asking for a mutually acceptable plan. Reply! can connect you with professionals to help.