The Pritchard Law Firm PLLC
represents client in foreclosure matters in all counties in Texas.
- Prepare and send Notice of Default, along with borrower’s Right to Cure and Notice of Intent to Accelerate.
- Order title, bankruptcy, federal tax lien and judicial records searches if requested.
- Send all required Notice of Acceleration and Notice of Non-Judicial Foreclosure sale.
- Prepare and file Appointment of Substitute Trustee.
- Post and file Notice of Non-Judicial Foreclosure Sale.
- Provide Client with copies of the letters and documents prepared.
- Conduct the Non-Judicial Foreclosure Sale on the first available sale date.
- Provide creditors with results of foreclosure sale the day of the sale.
- Prepare all post-sale documents including Substitute Trustee’s Deed.
- Record all documents in the real property records of the appropriate county.
- Assist with any post-foreclosure title issues.
In Texas, unlike many other states, liens against real property may be foreclosed non-judicially without suing for a judgment ordering foreclosure. This lowers servicing costs and ultimately making loans more readily available than they would be if foreclosure procedure were more time-consuming and expensive. The exception to non-judicial foreclosure is home equity or property tax loans.
If the property is the borrowers homestead a thirty day notice must be given to the borrower, allowing the borrower time to cure the default. All foreclosures require a twenty one notice day notice, after acceleration, and all foreclosures take place on the first Tuesday of each month (holidays included).
Before foreclosing a lien against real estate, the debt secured by the real estate must have matured. With consumer loans, this usually occurs through acceleration of the loan after a default in payment. Failing to properly accelerate the debt is probably the most common foreclosure defect and will serve to void a foreclosure sale.
To property accelerate a debt there must first be a default under the terms of the loan documents. While the most common default is default in payment, failing to pay property taxes, maintain the condition of the property or maintain insurance, also defaults under most loan documents.
If the most form deed of trusts, once a default is declared, the lender is required to provide the consumer thirty days to cure the default. If a deed of trust is used which does not specify a right to cure period, Texas law requires that a consumer be provided with 20 days written notice of their right to cure their default. Beyond requiring thirty-days notice many deeds of trust require the lender to provide specific notices to the consumer including notifying the consumer of his or her right to reinstate the debt after acceleration.
The fair Debt Collection Practices Act (“FDCPA “) requires that a debt collector provide the borrower 30 days in which to request verification of the debt. The FDCPA 3o-day period and the deed of trust periods may run at the same time, if an attorney sends the right-to-cure demand letter while the FDCPA 30-day period in which to request verification will not lengthen the time necessary prior to foreclosure if an attorney sends the right-to-cure demand letter, it will lengthen the time necessary prior to foreclosure if the attorney’s initial correspondence is the 21-day Notice of Sale. This is because the 21-day Notice would be extended to 30 days to assure that foreclosure does not occur before the expiration of the FDCP A 30-day debt verification period.
Notice of Acceleration
Once the notice of default has been property given and the time provided to the borrower to cure the default has passed, the debt may be accelerated. The debt must be accelerated and notice of acceleration given in order to foreclose. The borrower should also be advised in writing of the date of acceleration.
Notice of Sale
Once the right-to-cure period has expired and the notice of acceleration sent, notice of the foreclosure sale must be provided. Texas law requires that the Notice of Sale must be provided to the borrower and posted and filed in the county courthouse of the county where the property is located. Beyond serving notice on the borrower, Texas law requires that notice also be given to each obligor on the indebtedness, including guarantors. Failure to provide notice to any obligor may prevent the lender from pursuing that obligor for any remaining deficiency although it will not void the foreclosure sale. Texas law does not require that prior lienholders or owners of the property (if other than the deed of trust lien grantor) be given notice of foreclosure. Further, superior lienholders are not required to be given notice, as their rights are unaffected by the foreclosure. The foreclosure notice must also specify the time and place of the sale. In Texas. foreclosure sales may only be held on the first Tuesday of the month following 21 days notice. The sale may only be conducted between the hours of 10:00 and 4:00 p.m. and they must be conducted at the place designated by the commissioners’ court of the county where the property is located.
The pubic sate of the property must be conducted by the trustee or a validly appointed substitute trustee. A sale conducted by anyone else is void.
When conducting the sale, the trustees simply read a copy of the posted Notice of Sale or prepared script reciting the pertinent facts such as the lien information and the property description and then announce thatthey will accept bids.
The deed of trust generally states sale must be a cash sate and the trustee must give the winning bidder a reasonable opportunity to obtain cash and return with it at the time when the sale is to be reconvened later that same day and prior to 4:00p.m. when the sale may be completed. If the winning bidder is unable to obtain the necessary funds, the sale is made to the next highest bidder at the time of the reconvened sale.
The vast majority of foreclosure sales in Texas, the mortgagee will buy the property by bidding as a credit against the secured debt. A very small percentage of properties sold at foreclosure are sold to third-party bidders.
One who purchases at a foreclosure sale takes the property at their peril. The conveyance from the borrower is similar in certain respects to a quitclaim deed. This means that a prospective purchaser at a foreclosure sale takes substantial risk unless he has previously investigated title to the property to determine if there are any superior liens against the property. If there are superior liens against the property, whoever purchases at foreclosure will take title subject to those superior liens, as well as to parties in possession.