Simply put, foreclosure is a process that allows the bank to take back “your” house – because you fell behind on your payments. How can they do this? Because you told them they could! In Texas, odds are there is a clause in your mortgage or deed of trust allowing the bank to accelerate the entire balance of your mortgage – letting it to sell your house. The rules in Texas are clear:
20 days – The mortgage company must notify you to catch up on your late payments or it will foreclosure on your house.
21 days – After the 20 days expired, but at least 21 days before the foreclosure sale, notice of foreclosure must be mailed to your last known address. This is important because the 21-day clock runs from the time the mortgage company mails the letter – not 21 days after receiving the letter.
All foreclosures are conducted on the 1st Tuesday of every month and auctioned off to the highest bidder.
Oddly enough the mortgage company can bid on your house– and obtain a deficiency judgment against you. For example if the balance on your mortgage is $200,000 but the house sells for the fair market value of $125,000 – you could be held responsible for the difference – $75,000.
Bankruptcy law is a powerful weapon to avoid paying the deficiency judgment or even saving your house from foreclosure.
Bennett Cunningham is a Bankruptcy Attorney licensed in Texas and is a former Investigative Reporter for the CBS Television Station in Dallas. Mr. Cunningham has garnered 7 Regional Emmy Awards, including the Best Investigative Reporter in Texas 2 years in a row, as well as several National Awards for his exposés into the mismanagement of taxpayer dollars and government waste. Mr. Cunningham is also admitted to practice in the US Bankruptcy Court for the Northern District of Texas and the US Bankruptcy Court for the Eastern District of Texas. He is a member of the National Association of Consumer Bankruptcy Attorney’s, American Bar Association, American Bankruptcy Institute and the Dallas Bar Association.
This blog is not meant to give you legal advice. If you need to seek legal advice, you should consult a licensed attorney in your jurisdiction.