Foreclosure is a legal process that a mortgage company or bank uses to satisfy your mortgage loan, typically by taking back your home.

These entities usually use foreclosure after you fail to make your mortgage payments or property tax payments.

The main difference comes down to whether or not your lender needs to go to court before foreclosing on your property.

While a judicial foreclosure does require them to obtain a judgment from the court, non-judicial foreclosure allows them to foreclose without the court, as long as the deed of trust has a power of sale clause.

In Texas, the most common type of foreclosure is non-judicial.

Any missed mortgage payment can result in foreclosure since it is a breach of your agreement with your lender or servicer.

However, more lenders don’t initiate foreclosure proceedings immediately after a missed payment. You may be charged with late fees, though. These expenses can add up over time, especially if you continue to miss payments.

If you miss more than 3 payments, most lenders will begin the foreclosure process.

You should contact the loss mitigation department of your lender. It’s best to contact them as soon as possible since you’ll have more options available to you to work out an alternative.

When you contact them, make sure to have your financial information so they can determine what options you qualify for. It’s important not to ignore these notifications and take action quickly.

Yes, there are a number of alternatives to foreclosure. The sooner you contact your lender after you know you won’t be able to make a payment, the more options you’ll have available.

Some solutions are permanent while others are temporary. Other options will allow you to continue living in your home, and others will require you to move, but in a less disruptive way than foreclosure.

Depending on your situation, you may be able to:

• Modify your loan to reduce your monthly payments and extend the loan term
• Get short-term forbearance or repayment plan
• Arrange short sale or deed in lieu of foreclosure

There are usually 3 steps in the foreclosure process within the State of Texas.

• Notice of Default: Lenders and servicers are required by law to send you a written notice that gives you 20 days to pay the full amount owed.
• Notice of Sale Filed, Posted, and Mailed: By law, you will receive written notice at least 21 days before the date of the foreclosure sale. This 21-day period starts on the day the notice is mailed, not when you receive it.
• Foreclosure Sale: The county courthouse will hold a foreclosure sale where anyone is allowed to bid. After the auction is complete, you are not allowed to buy back the property from the new owner unless it’s sold by a government entity, tax lender, or for nonpayment of homeowner’s association fees.

While filing bankruptcy won’t prevent foreclosure, it may help your situation. Chapter 13 can help you save your home since it reorganizes your debts and lets you repay over time. Chapter 7 usually doesn’t let you keep your home since it liquidates your assets to pay back your debts.

The best thing to do in this situation is to contact a foreclosure attorney like Richard Hughes. You can also get free house counseling during this time. The U.S. Department of Housing and Urban Development can give you recommendations for approved housing counseling agencies.

Unfortunately, the foreclosure process can be lengthy. It can range anywhere from 120 days to over a year, depending on how willing the lender is to negotiate, how quickly you respond to notices, and any other delays.