Owning a home typically requires taking out a mortgage. Since most people in the Dallas-Fort Worth metropolitan area cannot afford the upfront price of a home, they will take out a mortgage and repay it to the lender over a number of years.
If they fail to make those mortgage payments or fall short on property taxes, the lender or the local government could initiate foreclosure proceedings. The result of a completed foreclosure is the party that is owed takes legal possession of the property so they can sell it and recoup the losses.
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Texas Foreclosure Process
Facing foreclosure is a difficult situation for a homeowner. If you are unable to repay the debt, you could find yourself without a home because the lender or government has the right to legally claim the property. This is what the legal process looks like in a foreclosure in Texas.
Defaulting Mortgage Payments
The most common cause of foreclosure is delinquent mortgage payments. In this scenario, the homeowner fails to make full payments based on the agreed-upon rate in the loan contract. Defaulted mortgage payments could occur because they were either made late or were not paid in full.
In general, payments must be at least 120 days late before a foreclosure is initiated. Many Fort Worth homeowners default on payments when they are facing financial difficulties in other areas, such as job loss or emergency expenses. The lender will obtain a deficiency judgment from a court as the first step in the process.
Notice of Default
Lenders are required to provide a notice of default or demand letter to borrowers who have late payments. If foreclosure is initiated without a notice of default being sent to the borrower, the homeowner would have a case to delay or avoid foreclosure. The demand letter will typically give you 20 days to repay the debt in full. It is the first stage of the pre-foreclosure process.
Notice of Sale
If you fail to make the mortgage payment on time, the lender has to send a notice of sale at least 21 days before the property auction occurs. The notice of sale only needs to be mailed 21 days before the auction — it doesn’t matter when you receive your mail. The notice will also be posted at the courthouse.
Foreclosure Sale
A foreclosure sale is an auction-style event where bidders can attempt to claim your home. These auctions are public knowledge, and anyone can bid on a property at the sale. If the foreclosure sale is completed and someone wins the bid on your property, you would have a redemption period during which you can buy back the property from the buyer unless the property was sold by the government or a tax lender.
How to Avoid Foreclosure in Fort Worth, TX
Avoiding foreclosure can protect your financial future. You have likely poured a lot of money into this Fort Worth home, and all that equity will go to waste if another party is allowed to seize the property.
If you do not stop foreclosure on your home, it will have a huge negative impact on your financial outlook. Here are some strategies to halt the process if you are facing foreclosure due to missed payments.
Apply for Loss Mitigation
Loss mitigation is a strategy for avoiding foreclosure in which the borrower and lender work together to find a solution to halt the process. There are several examples of loss mitigation that can work, such as a restructured payment plan, a short sale, a loan modification, or a deed-in-lieu of foreclosure.
Generally, you must submit your application for loss mitigation at least 37 days before a scheduled auction to avoid foreclosure. These steps must occur during the pre-foreclosure process if you want to have a chance to stop foreclosure.
File for Bankruptcy
Bankruptcy is often a last resort for individuals who are unable to afford all their bills and debt payments. There are two types of bankruptcy, called Chapter 7 and Chapter 13. A Chapter 7 bankruptcy involves liquidation, where a bankruptcy trustee sells certain assets to pay back creditors, and then the remaining debt is canceled.
A Chapter 13 bankruptcy involves creating a repayment plan that usually lasts three to five years before the remaining debts are forgiven. Both circumstances can stop foreclosure from occurring, though the sale of a home may occur with Chapter 7 bankruptcies.
Pay Off the Loan
The simplest and most common method of stopping foreclosure is to pay what is owed to the lender, plus any interest and extra fees associated with the late payment. If done so in time, the lender has no right to initiate a foreclosure on your Fort Worth home. If the lien on your Dallas-Fort Worth home is based on unpaid property taxes, you would need to pay the government what is owed plus interest and fees to stop foreclosure.
Sell the House
As a last resort, homeowners can choose to sell their properties quickly to avoid foreclosure and take advantage of the proceeds from the sale. If you take the traditional home sale route, it may take too long to close the deal before the foreclosure is initiated.
Selling your Fort Worth home to A-List Properties is a viable option to prevent foreclosure. We buy houses as-is so homeowners can avoid spending money on repairs or cleaning. We are BBB-accredited cash home buyers, so you can expect fast, efficient, and reliable service. Plus, you won’t be paying for common closing costs like real estate agent fees.Once you contact us and tell us about your Forth Worth, TX home, we will come back with a fair cash offer that can close the deal within two weeks, allowing you to make money from the sale rather than face foreclosure and risk losing the house for nothing. Call today at (972) 526-7042 or fill out a contact form to get your fair cash offer — no strings attached.
Zach Shelley
Zach Shelley is a seasoned real estate investor with a diverse network spanning across the nation. As the founder of his own real estate venture, Zach is committed to offering innovative solutions to homeowners facing various real estate challenges.. Through his dedication and strategic approach, Zach continues to make a significant impact in the real estate industry, providing homeowners with alternative pathways to navigate their property transactions.
