Texas is a non-judicial foreclosure state. This means in most cases, banks and mortgage companies do not need court permission in order to foreclose. Whenever an individual defaults on his/her mortgage, the bank only needs to follow the requirements of the Texas Property Code.
- If the property is homesteaded, the trustee (an attorney appointed by the bank) must send the defaulting owner a default, or demand, letter that must precede, by 20 days, any public posting of the property for foreclosure. This letter is a private letter, is not filed in county records, and is not available to the public.
- If the property is not homesteaded, or if the 20 days alluded to above lapses, the trustee will post a notice of the pending foreclosure most commonly referred to as a trustee sale notice. This notice must be posted no later than 21 days before the scheduled foreclosure sale.
Foreclosure sales only occur on the first Tuesday of the month. The sale will proceed even if that first Tuesday falls on a holiday such as New Years or Independence Day. On the day of the sale, the trustee who represents the bank will sell the property for cash for the loan balance plus interest, penalties & legal costs, etc.
- The loan balance is not public information under Texas law.
- The loan balance is not furnished on the foreclosure notices.
- The loan balance is not filed in public records.
- The trustee or the bank will not disclose if called.
For this reason, Foreclosure Report Services provide the original amount borrowed and the origination date of the loan so you can make a subjective judgment about what the loan balance is.
Tax foreclosures in Texas are judicial foreclosures and require court permission before a foreclosure can proceed and are governed by the Texas Property Tax Code. After a court grants permission to foreclose, notices are posted 21 days before the sale just as are mortgage foreclosure notices and the auctions occur the first Tuesday of the month.
Sheriff's auction properties are foreclosed on to collect delinquent taxes or to execute(satisfy) a judgment. In most cases, the former owner has the right to re-claim or redeem the property after the auction, but will have to pay the purchaser at least 25% over the amount paid at the auction.
The sales are conducted by deputy constables who sell the property for whatever the tax delinquency amount is for cash.
If you are seriously interested in purchasing foreclosers on the courthouse steps, you will want to subscribe to a service similar to the ones found on Roddy's Foreclosure Listing Service.