Welcome aboard! What is the foreclosure process (McAllen TX)? In this article, we will discuss the foreclosure type, timeline, and the process.

In McAllen, most foreclosures are nonjudicial meaning the lender does not need the approval of the court to foreclose your home. It is also possible to arrange a legal foreclosure agreement, but it is rare in McAllen.

What is a Judicial Foreclosure?

In a judicial foreclosure, the lender must file a lawsuit against the borrower. The court will approve the case, and usually, it takes nine months to foreclose the home. Buyers have the right to reinstate their loan 24 hours before the auction. Once the auction date is set, the court sells the property to the highest bidder.

A judicial sale occurs if there is no “power of sale” clause in the mortgage documents. If a “power of sale” clause exists, then lenders have the right to impose a non-judicial foreclosure.

What is a Non-Judicial Foreclosure?

Simply speaking, non-judicial foreclosures happen outside the court. These foreclosures follow a pattern, but the process is different from the judicial system. Since Texas is a non-judicial state, we will discuss the same foreclosure process in this article.

Foreclosure McAllen TX: Timeline & Process

60 Days of Missing the 1^st Payment:

It is only a matter of months before your home is foreclosed if you do not respond back in a timely manner. The foreclosure begins once you have missed the second consecutive loan payment. That means the lenders will inquire why you are not paying the loan. You will usually receive phone calls asking to make the payment with an explanation of the consequences.

90 Days of Missing the 1^st Payment:

After missing the 3^rd consecutive payment, the lenders will send you the “breach letter or demand letter”. This letter is the beginning of the non-judicial foreclosure process because the lenders will ask you to pay the outstanding payments in one installment.

120 Days of Missing the 1^st Installment

You will get 30 days to make your loan current. If you do not respond back, the lenders will “accelerate” your loan. Once this happens, you must pay the entire loan balance and not just the outstanding payments.

Foreclosure McAllen TX: Notice & Legal Proceedings

In Texas, a lender is not obliged to send you a detailed foreclosure notice. You may receive these 3 notices or documents:

• Default notice: It is usually sent to you after 60 days of missing the first loan installment and 20 days before you receive the notice of sale.
• Notice of Sale: The notice of sale arrives after the default notice. The lenders must send this notice 21 days before the date of the auction.
• A public foreclosure notice is published. Usually, the local trustee issues this notice.

The lender informs you about the date, location and time of your foreclosure auction. In most cases, the lender will pick the highest bidder, and he will sell your property.

Redemption Period:

In Texas, there is no way to redeem your property after the sale is over.

Eviction Period

The new property owner has the right to remove you from the home if you have not already left the property. Local eviction laws apply in this case.

Deficiency Judgment

What is a deficiency? It is the difference between the loan amount you owe and the market value of your home. The price of your home is calculated according to the Fair Market Value. In that case, your home might be worth $375k, but you may owe $400k. Your loan deficiency will be $25k in that case.

In Texas, there is no law explaining the deficiency judgment. The lenders can ask you to pay the remaining balance even after the foreclosure is over. However, the creditors must file a lawsuit against you in next two years of the foreclosure. You can respond back by filing a lawsuit after 90 days of the foreclosure.

In case of short sale and deed in lieu of foreclosure, you may still have to fight a deficiency judgment. Non-judicial foreclosures proceed quickly, but you always get a chance to stop property foreclosure on your home. Please consult a foreclosure attorney or call us to get a solution to your problem.