How to Prevent Judicial Foreclosure in Texas

In Texas, your lender has the right to perform a judicial or nonjudicial foreclosure. The judicial process requires the lender to go through the court. Your lender would need to file a lawsuit to obtain a court order granting permission to foreclose the property. Once the court declares the foreclosure official, the property is set for auction. The home is sold to the highest bidder. You can avoid Texas judicial foreclosure by using state resources.

• 1

  Read your mortgage papers. In Texas, unless there is a "power of sale" clause in your mortgage or deed of trust, the judicial process must be used to foreclose.

• 2

  Contact your lender to discuss available options to prevent foreclosure. Depending on your loan, the lender may refinance, offer a forbearance or place you on a repayment plan. Your lender can determine your eligibility for assistance through the Making Home Affordable program to lower your payment. You will most likely need to submit a hardship letter to know lender stating the reason you are unable to afford your current mortgage payment.

• 3

  Meet with a counselor approved by the Department of Housing and Urban Development. There are many foreclosure-prevention counselors throughout Texas. The counselors have extensive knowledge of the judicial foreclosure process and the steps you will need to take. After reviewing your loan details, the counselor can match you to appropriate assistance programs. Contact the Texas Foreclosure Prevention Task Force or HUD to locate a counselor.

• 4

  Respond to court notices. If you are served with papers from the court, it is important to submit your response within the appropriate time frame. You will receive a letter of demand first. Respond to the court, explaining the situation. You have 20 days before foreclosure proceeding begin. Never ignore court paperwork during the foreclosure. You can request mediation to meet with a neutral third party and your lender to discuss possible solutions.

• 5

  Seek legal aid. There are pro bono attorneys in Texas who provide services to Texas homeowners to prevent judicial foreclosure. The services are typically available for low- to moderate-income homeowners. Legal Aid of Northwest Texas and Lone Star Legal Aid both serve Texas residents. Refer to HUD for an agency near you.

• 6

  Consider a short sale. The lender may be willing to let you sell the house for less than the amount owed. If your Texas lender participates in the Home Affordable Foreclosure Alternative program, you may be able to receive money to relocate if you sell the home in a short sale.

• 7

  File bankruptcy. In Texas, if you file either a Chapter 7 bankruptcy or Chapter 13 bankruptcy, you can delay or stop the foreclosure process. Once the file, the court issues an Order for Relief. In the relief is an "automatic stay" clause that requires creditors, including your lender, to cease collection activity. Even if your house has been scheduled to be sold, the sale must be stopped while the bankruptcy is pending. Bankruptcy will have a negative impact on your credit for at least seven years.