We have assisted hundreds of people who hold mortgages, liens, or other types of security interests in Texas real property when the debtor defaults on the loan. The process has complex rules that you cannot afford to violate. If you are not careful, you can be forced to pay the debtor’s attorney’s fees, have the sale set aside, or find yourself starting over from scratch. We have a system that ensures accuracy and moves as quickly as the law allows.
The Documents That Control a Foreclosure
Foreclosure is the proper remedy for repossession of real property by a mortgagee or lender when the mortgagor defaults on the underlying note obligation. Every Texas real estate foreclosure begins with two documents.
The Promissory Note
The note describes the terms of repayment of the debt. It is the borrower’s written promise to repay. The note creates the obligation, but by itself it does not give you the right to take the property. For that, you need the deed of trust.
The Deed of Trust
The deed of trust is the document that establishes your security interest in the property. In it, the borrower conveys the property to a trustee, to hold for your benefit, so that if the borrower defaults the trustee can sell the property without resorting to a lawsuit. This three-party arrangement is what makes Texas non-judicial foreclosure possible. All of your foreclosure remedies are described in the deed of trust, and none of them are triggered until the borrower commits an act of default as described in that document.
Non-Judicial vs. Judicial Foreclosure in Texas
Most Texas foreclosures do not require a court order. When your loan is secured by a properly drafted deed of trust and the property is not the borrower’s homestead under a home equity loan, you can proceed through the trustee sale process entirely outside of court.
The main exception is a cash-out home equity loan on a Texas homestead. Under the Texas Constitution, that type of loan can only be foreclosed with a court order. We handle that process too. It is a streamlined court proceeding rather than a full-blown lawsuit, but it does require judicial involvement.
The Five Steps
Click on any step below for a full explanation of what is required at that stage.
Step 1: Default. Before anything else, we review the note and deed of trust to confirm a default has occurred and identify any notice or cure requirements. Not every missed payment automatically lets you proceed; the documents control.
Step 2: Notice. Texas law requires specific written notices before a foreclosure sale can proceed. The critical deadline is that notice must be filed with the county clerk and mailed to the borrower at least 21 days before the sale date. There is no flexibility here.
Step 3: Lien Search. A title search must be ordered at the start of the process. We need to know the priority of your lien, identify any senior encumbrances, and, most critically, check for IRS tax liens that trigger a separate federal notice requirement.
Step 4: The Sale. The foreclosure sale takes place on the first Tuesday of the month at the county courthouse. The substitute trustee conducts the bidding and, when complete, executes a trustee’s deed to the successful buyer.
Step 5: Cleaning Up. After the sale, there may be post-sale issues to address: a potential deficiency judgment if the sale did not cover the full debt, removal of occupants, outstanding property taxes, and management of acquired property if the lender bids it in.
Common Mistakes That Can Derail a Texas Foreclosure
These are the most costly mistakes we see in Texas foreclosures handled without experienced counsel.
Accepting a partial payment after the debt has been accelerated and the sale posted. A single payment accepted at the wrong time can give the borrower grounds for a temporary restraining order to stop the sale on the morning it is scheduled.
Sending notices to a stale address. If the borrower has moved and the lender’s records have not been updated, notices sent to the old address may be defective.
Missing the IRS notice requirement. If a federal tax lien is on the property and the IRS does not receive its required advance notice, the IRS lien survives the sale, and whoever bought the property owns it subject to an IRS claim.
A defective substitute trustee appointment. If the document appointing the substitute trustee is not properly prepared, executed, notarized, and recorded before the sale, the trustee may lack authority to conduct it.
We have seen every one of these. Our process is built to prevent them.
In this section: Step 1: Default · Step 2: Notice · Step 3: Lien Search · Step 4: Sale · Step 5: Cleaning Up
Frequently Asked Questions
How quickly can a Texas foreclosure be completed?
In a clean situation, with no IRS liens, no cure-period requirements, and no bankruptcy filing, we can typically complete a Texas non-judicial foreclosure in 45 to 60 days from first engagement. The legal minimum notice period is 21 days, but the surrounding steps take additional time we do not skip. Residential property requires a 20 day notice of intent to accelerate the note before the 21 day notice of foreclosure can be sent.
Does the borrower have the right to stop the foreclosure?
Yes, in several ways. The borrower can pay off the entire outstanding debt before the sale concludes. They can file for bankruptcy, which immediately triggers the automatic stay and halts the sale. They can seek a temporary restraining order from a Texas court if they believe there is a procedural defect in the process, which is exactly why we follow every step precisely.
What happens to junior liens when you foreclose a senior deed of trust?
When a senior lender forecloses, liens junior to that lender's deed of trust are generally extinguished by the sale. The buyer acquires the property free of junior claims. However, liens senior to yours and ad valorem property taxes, which are always senior to private liens, are not affected and survive the sale.
Can I foreclose a second lien without the first lienholder's consent?
Yes. A second-lien holder can foreclose its own lien independently. But a buyer at your sale takes the property subject to the first lien, which remains fully in place. Understanding the senior debt balance is essential before deciding whether junior-lien foreclosure makes economic sense.
What if the borrower files bankruptcy right before the sale?
Stop everything and call us. The automatic stay goes into effect from the moment the petition is filed, even if the sale is scheduled for the same morning. We file for relief from the stay in the bankruptcy court and advise you on the fastest path to resuming the foreclosure.
Do you handle commercial as well as residential foreclosures?
Yes. We handle both. The legal framework under Texas Property Code Chapter 51 applies to both, though commercial properties often have additional complexity (environmental considerations, lease issues, multiple lienholders) that we address as part of our standard process. Residential property requires a 20 day notice of intent to accelerate the note before the 21 day notice of foreclosure can be sent.