Understanding the foreclosure process in Killeen, Temple & Copperas Cove is an important part of navigating your own home foreclosure.
What is foreclosure anyway?
Foreclosure is the legal process that banks (or any large lien holder) use to take back property securing a loan, generally after the borrower stops making payments. The most typical scenario is when a borrower stops paying a mortgage for a period of time. Typically it takes 6 to 12 months before a lender will start the foreclosure process but this can vary wildly and sometimes it can be as little as a month!
Foreclosure is no fun. But just know that it’s not the end of the world. When you know how foreclosure in Killeen works… it arms you with the knowledge to make sure you navigate it well and come out the other end as well as possible.
The Basic Process of A Foreclosure in Texas
In Texas, foreclosure is generally a three step process, starting with two notifications followed by the sale or auction of a property.(Exception: If you have a home equity loan, home equity line of credit, a tax lien transfer loan, or owe assessments to a homeowner’s association, a court order is usually required before your property can be posted for sale. In some instances, an order is also required to foreclose on a reverse mortgage. A lawsuit must be filed if a government entity is trying to foreclose, e.g. for property taxes, a condemned property, etc.).
Step 1 – Notice of Default – By law, the lender is required to send a written notice allowing you 20 days to pay the full amount owed and bring the defaulted loan current. There are a few loan types (FHA, VA) that give you an additional 10 days but it’s still not much time and the clock is ticking at this point.
Step 2 – Notice of Sale – Next, the law requires at least 21 days’ written notice of the date on which the foreclosure sale (auction) is to take place. It’s worth noting that the 21 days begin the date the notice is mailed, not the date you receive it. This will be sent as a certified letter. Failing to collect, open or read your certified mail will not stop the foreclosure sale! The foreclosure notice will also be posted at the courthouse and filed with the county clerk. At this point you will probably be contacted by various companies, investors, etc.
Step 3 – Foreclosure Sale – This is the final stage of the process. After the auction you will no longer own your house (even if you are living in it!) and the new owner will most likely start eviction or other removal if the home is occupied. Foreclosure sales are held at the county courthouse on the first Tuesday of each month. By law, this is the same for every county in Texas. Anyone may bid but most often the bank bids on it’s own property and takes ownership. After the auction, you do not have a right to buy back your property from the new owner unless it is being sold by a government entity, a tax lender or for nonpayment of homeowner’s association fees. There are time limits involved and in some cases you must pay a redemption fee.
Can I refinance or sell my home to avoid foreclosure?
If you are behind in payments, refinancing is not typically possible as lenders will not consider you for a loan. However there still may be time to sell a property *if* the sale proceeds would pay off the mortgage and cover the cost of the sale. At this point, talking to an investor like Liberty might be your best option as we are familiar with the process and can move MUCH quicker than the typical sales process.
What Happens After A Foreclosure Auction?
First and foremost, foreclosure can be an emotionally difficult time and for that I’m truly sorry. On the more day to day side, your credit is obviously going to be in rough shape for a while and renting a house or apartment will be a bit more challenging as most will ask about evictions and foreclosures as well as run a credit check.
On the financial side, after a foreclosure is complete, the loan amount is paid off with the sale proceeds. Sometimes, if the sale of the property at auction isn’t enough to pay off the loan, a deficiency judgment can be issued against the borrower. A deficiency judgment is basically where the bank gets a judgment against you, the borrower, for the remaining funds owed to the bank on the loan amount after the foreclosure sale. Here’s a great resource that lists the state by state deficiency judgment laws, since every state is different.
Foreclosure, sucks, bottom line. However, I will say that the people I see who do the best with it are folks that recognize the problem early, realize if they can or can’t get caught up and then make a plan to sell or otherwise deal with the property *before* they get in to the foreclosure process. They are in a better bargaining position with everybody and can take time to weigh options, make plans, etc.
If you are behind on payments or already in the process of foreclosure please don’t hesitate to call me, Dominic, directly at the number below and I will be happy to listen and help you come up with a plan that works for you!
Give us a call anytime (512) 961-9943 or
fill out the form on this website today! >>
Another Foreclosure Resource For Killeen Texas HomeOwners: