How to Stop Foreclosure in Texas: A Step-by-Step Guide

Foreclosure can be overwhelming, but Texas homeowners have options to prevent losing their homes. If you're facing foreclosure, understanding your rights and taking swift action can make all the difference. This guide will walk you through the steps you can take to stop foreclosure in Texas.

1. Understand the Texas Foreclosure Process

Texas is a non-judicial foreclosure state, meaning lenders do not have to go to court to foreclose on a property. This makes the process faster than in other states. Here’s a general timeline:

Missed Payments: Foreclosure typically starts after 90 days of missed mortgage payments.
Notice of Default (NOD): The lender sends a formal notice giving you time to catch up.
Notice of Sale (NOS): At least 21 days before the foreclosure sale, the lender must notify you of the auction date.
Foreclosure Auction: Homes are sold on the first Tuesday of the month at the county courthouse.

2. Contact Your Lender Immediately

If you’re behind on payments, do not ignore your lender’s calls or letters. Many lenders offer options such as:

Forbearance: Temporary reduction or suspension of payments.
Loan Modification: Adjusting the loan terms to make payments more affordable.
Repayment Plans: Spreading missed payments over time.

3. Apply for a Loan Reinstatement

A loan reinstatement allows you to catch up on missed payments in one lump sum before the foreclosure sale. Check your mortgage agreement or call your lender to request the exact amount needed.

4. Seek Foreclosure Assistance Programs

Texas offers various programs to help homeowners in distress:

Texas Homeowner Assistance Fund (TXHAF): Provides mortgage relief for eligible homeowners.
HUD-Approved Housing Counselors: Offer free guidance on foreclosure prevention (Call 1-800-569-4287).

5. Consider Refinancing or Hard Money Loans

If you have equity in your home, you might qualify for a refinance or hard money loan to pay off the delinquent amount. These loans come with higher interest rates but can prevent foreclosure.

6. Sell Your Home Before the Foreclosure Sale

Selling your home quickly can prevent foreclosure and protect your credit score. Options include:

Traditional Sale: Listing with a real estate agent.
Cash Buyers: Selling to an investor for a fast, as-is sale.
Short Sale: Selling for less than what’s owed with lender approval.

7. File for Bankruptcy (Last Resort Option)

Filing for bankruptcy temporarily halts foreclosure due to the automatic stay. However, this should only be considered with legal guidance, as it has long-term financial consequences.

8. Recover Surplus Funds if Your Home is Sold

If your home has already been foreclosed and sold for more than what you owed, you may be entitled to surplus funds (excess proceeds). NOFA can help you claim these funds legally and efficiently.

Take Action Today

The sooner you take action, the more options you have to stop foreclosure. If you need assistance, NOFA specializes in helping Texas homeowners prevent foreclosure and recover excess funds. Call us at 866-800-6632 for a free consultation.