You might need to catch up on your mortgage due date, or you’ve seen an auction for foreclosure coming up, and you’re wondering how you can stop foreclosure in Texas. Bankruptcy might be one of the most sought-after alternatives, but what’s the cost of the amount you pay today? Does bankruptcy offer the relief you need?

The intention behind this article is to attain the following:

1. Understand Foreclosure in Texas
2. Options to Stop Foreclosure in Texas
3. Conclusion

Most of these options are targeted to allow you to continue making a modified payment towards your mortgage. Some of them are more focused on eliminating the entire debt. The choices are all complex, so continue reading to learn more about the alternatives available.

Foreclosure in Texas

There’s no solution to this, and being in foreclosure in Texas is a nightmare. It doesn’t matter if you lost your job, became ill or disabled, or another issue kept you from keeping the mortgage payment on time—foreclosure is one of the most terrifying and demoralizing risks you’ll ever confront. 

We’ll first look at judicial and non-judicial processes of foreclosure in Texas. This is a brief distinction and what’s permitted in Texas:

1. Judicial Foreclosure: The loanee has to file a foreclosure suit (judicial foreclosure) to get the court’s permission to market the property.
2. Non-Judicial Foreclosure: A lender is not required to file a lawsuit for foreclosure. These foreclosures are typically managed by either the Clerk of Court’s Office or the Sheriff’s Office in the county where the property is located.

Texas allows judicial foreclosures, meaning you will be served with the foreclosure suit and are given a certain amount of time to respond. If you fail to respond to the lawsuit, the court will enter a default judgment, requiring the home to be auctioned off in the upcoming foreclosure sale.

A judicial foreclosure involves filing a summons and complaint, asking the court to order the home to be auctioned off during foreclosure. The homeowner must be served an original copy of the complaint. You are given 20-30 days to reply to the complaint in many states.

Texas also allows non-judicial foreclosures. In this case, the mortgage lender must give you notice of default and provide a period to rectify your insolvency (catch up on non-payments). Generally, the lender must notify you of its intention to foreclose due to non-payment. The deadlines and guidelines for non-judicial foreclosures differ by state.

How to Stop Foreclosure in Texas

The idea of foreclosure is overwhelming. However, there are some options you can take to stop, deter, and stop foreclosure in Texas as soon as possible. Let’s discuss those currently, starting with bankruptcy, a typical choice for preventing foreclosure.

• Loan Modification

Are you beginning to realize that your mortgage payments are becoming increasingly difficult to make in full? Did something important happen in your life that prevented you from paying your mortgage? If you cannot pay, it might be worth contacting your lender to inquire whether they will look into loan modifications.

Although Texas aid in debt is a common practice for unsecured debt, it could be less frequent when faced with the threat of foreclosure unless you can have suitable cash through the debt consolidation program to get your mortgage paid in arrears.

• Reinstate Your Loan

Did you miss payments but have suitable cash for everything you still need? Contact your lender with the money and see whether they’ll take the amount and let you continue paying off your loan without legal proceedings. In general, if you have funds to pay and lenders are willing to take this choice.

• Repayment Strategy

Did you miss some payments, but are you still capable of making payments? Consider asking if your lender is willing to consider a repayment program. 

A repayment plan lets you slowly repay your missed loan while making regular mortgage payments. This lets you slowly cover the missing payments rather than needing to pay them upfront. While lenders might be reluctant to make this arrangement, you could find a way to agree to pay a monthly installment on top of your mortgage, which they will be willing to accept.

• Forbearance Agreement

Let’s talk about the process of forbearance. Have you recently experienced something preventing you from making your monthly payments? 

Have you lost your job, become sick, or gone through a divorce or other event that could affect your finances? The lender can negotiate a forbearance arrangement. 

The agreement usually means that the lender gives you the right to make fewer amounts (or none at all) for a certain period. In most instances, if you can prove that the reason for having trouble making payments isn’t a long-term obstruction, your lender could offer you a limited amount of time in the form of a ‘grace period.’

• Refinance

Interest rates have increased recently, making refinancing an unwise opportunity to consider, especially when you’re barely making the entire amount due. However, refinancing allows you to begin afresh with a new lender, which makes them more inclined to assist you if you need more help later.

It could be difficult to qualify for refinancing if your credit score has been adversely affected.

• Sell Your Home

It’s a challenging decision, but selling your house is sometimes the best option. If you could earn profits or even a break by selling your home, it’s a great opportunity to think about. 

You can purchase a more affordable property or rent a place to regain control of your finances. In any case, selling your house allows you to avoid foreclosure, which can dramatically affect your credit score and reputation.

• Short Sale

A short sale of your home involves selling your house for less than the amount you owe. Since many homes that go to auction don’t sell for the appraised price, certain lenders and banks will allow a short sale of your house.

• Free or Low-Cost Foreclosure Help

There are many possibilities for foreclosure help in Texas, including free or low-cost. The state government encourages homeowners to remain in their homes, and resources could be available to help you keep your home.

Conclusion

In the end, you’ll know your situation best, so hopefully, this will provide clear solutions that will help you stop foreclosure in Texas. You may also contact your lender to discuss your situation’s best course of action. Feel free to reach out if you’d like to speak with someone about your options.