How does a foreclosure Work?

Left. Right. In Texas, this one-two punch is how the foreclosure process begins and sometimes, sadly, ends. How does a foreclosure work? It is a quick process. A Houston mortgage borrower receives a notice that they have defaulted on their mortgage payments. The ‘notice of default,’ as it is called, is telling a borrower they are in danger of losing their house if their mortgage loan is not paid in full?

All Texas homeowners have is 20 days before getting a notice their house will be sold in a foreclosure sale. How does a foreclosure work? Once a homeowner receives a notice their house will be sold to satisfy unpaid debt, a foreclosure auction is arranged. How does a foreclosure work, as in, who arranges the sale? These details are left up the Houston’s Harris County Clerk, where foreclosure sales are usually held a certain day each month, at a designated location at the courthouse. For example, foreclosure sales may be the first Tuesday of every month, between 8 a.m. and 4:30 p.m. on the courthouse steps.

How does a foreclosure work, do you have options?

Many homeowners think once their house is slated be sold via a foreclosure auction that they have little choice in deciding who buys their house. This is a myth. A homeowner always has a choice, and may have more options if they can answer the question, how does a foreclosure work? If a borrower has enough time between their lapse of making mortgage payments and the first notice their mortgage is in default, he or she may be able to arrange a short sale. It would allow a family or couple to choose whom lives in their house, instead of seeing their house auctioned. If borrowers do decide to have a short sale, keep in mind the sale of the house may not be enough to pay back the mortgage loan in full. The mortgage lender can still sue to recover the difference between the short sale price and the mortgage agreement.

It is a fact some people do not know when they ask ‘How does a foreclosure work?’ They do not realize they may still have to claim bankruptcy after selling their house. The seller of a short sale can put a clause on the sale that they are not liable for any mortgage payments not covered from the sale. As long as the mortgage lender and the seller agree, the lender cannot later sue borrowers for the full mortgage amount. Having a successful short sale also means a borrower never has to ask, how does a foreclosure work?

What happens if there is no time for a short sale?

If a borrower does not have time to arrange a short sale before getting the notice for foreclosure in the mail, they may still be able to file for bankruptcy. Filing for bankruptcy stops the foreclosure process immediately, but there are several other options so we try to do everything we can to help our clients avoid the bankruptcy route.

If you are in danger of having your house foreclosed and need to know more about how does a foreclosure work, and what your options are, please call 512-271-5044. The call is free; our services are always free; we can help you keep your home.

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