The foreclosure process

The foreclosure process is not very difficult to understand. There are several stages during which the homeowner has an opportunity to bring the loan current and avoid foreclosure.

There are several stages during which the homeowner has an opportunity to bring the loan current and avoid foreclosure. In Texas the usual time is three months of default. After the third month of default your lender evokes the acceleration clause in your mortgage and requires you to pay the entire amount... immediately.

In this letter they give you notice that you have 20 days to cure the delinquency before foreclosure will begin. At this point they're not fooling around and your alternatives drop significantly...not to mention the fact that your credit is seriously damaged.

The next step after 20 days of no payments or contact from you in the foreclosure process, your lender will then publish a legal notice of the pending foreclosure auction (sale) to be held at least 21 days later - on the first Tuesday of the following month on the county court house steps.

Your lender also files a notice with the county clerk and mails a certified copy of the notice to you – called a Notice of Default (N.O.D.).

This is when the dreaded FORECLOSURE PROCESS technically begins

Once the Notice of Default is filed, the foreclosure is imminent.

Then the auction date arrives. This is often called an auction, sheriff's sale or foreclosure sale. The auction is literally held on the county courthouse steps and anyone can bid. Anyone who can pay cash (or cashier's check) that is.

During the process homeowner has fore options.

1. Declare bankruptcy.

2. Reinstate the loan.

3. Sell the property (Short sale)

4. Let the property go to auction.

40% of homeowners choose #4!

Of the remaining 60% here is what they do:

55% choose to declare bankruptcy

5% go after reinstating the loan

40% choose to sell the property