Skip to navigation
A cardboard house cutout with a gavel and laptop next to it


Oliva Law Sept. 1, 2021

There were nearly 33,700 properties with foreclosure filings during the first quarter of 2021. Although the Covid-19 pandemic moratorium on foreclosures markedly decreased the number of them from the same quarter of 2020, they were still up 9% from the last quarter of 2020. The safety net that supported so many homeowners for a time is gone. For those who were already struggling with mortgage payments, the end of the moratorium may mean they will lose their homes.

If you have fallen behind on your payments, you may be wondering if there is any way to stop your lender or others from foreclosing on your home. Losing a home is undoubtedly one of the most stressful life events.

Oliva Law has helped clients throughout Corpus Christi and the Rio Grande Valley figure out the best way to get through rough financial times for more than 15 years. Foreclosure is only one part of your financial challenges. We discuss your options so you can make the best choice for yourself and your family.

Common Reasons for Foreclosure

Foreclosures occur when a homeowner has defaulted on a financial obligation. There are three key areas of default:

  • You fail to make mortgage payments to the lender or payments to an entity that has a lien against your property as security for another loan.

  • You fail to maintain property insurance as prescribed in your contract with the mortgage lender.

  • You fail to pay property taxes and the governmental entity to whom you owe them forecloses on your property to recover what you owe.

How Does Foreclosure Work?

Texas is a non-judicial foreclosure state which means most foreclosures do not go through the court. Instead, the state has established a procedure for foreclosing on a home. When you signed a mortgage or deed of trust, you consented to a “power of sale” provision which permits non-judicial foreclosure.

The first step in the process is the Notice of Default or “letter of demand” sent to you by the lienholder. You have 20 days to “cure” the default by paying the amount you owe.

If you fail to cure the default, a third-party trustee, unaffiliated with the lender or lienholder but chosen at their discretion, will file a Notice of Sale with the County Clerk’s Office in the county in which the property is located, post the notice at the county courthouse, and mail the notice to you. The Notice of Sale must be filed at least 21 days before the date of the sale. The clock begins when the notice is mailed, not from the time you receive it, open it, or even refuse to open the envelope.

The final step is the foreclosure sale. In Texas, these are held monthly on the first Tuesday of the month and anyone can bid on your home to purchase it. You are not allowed by law to buy back your home from whoever bought it at the sale unless it is being sold by certain parties and under certain time limits.

What Legal Rights and Options Do I Have?

You have a few options for avoiding foreclosure, beginning with moving the foreclosure to court. You can sue the lienholder for wrongful foreclosure if you can prove that they do not hold a valid lien, they failed to adhere to the Texas non-judicial process as prescribed, they violated a relevant state law, or committed some other grievous offense. These cases can be difficult, drawn-out, and cost thousands in court and attorney’s fees. If you are not successful in your case, you may also be ordered to pay the lender’s attorney’s fees and expenses.

Another option is to ask your lender to approve a short sale of your home. If they approve, you can negotiate with a buyer who then pays the purchase price to your lender. This can be risky since you are still responsible for paying the lender any sum left on the mortgage should the home not sell for enough money.

You can also discuss offering the deed to your home to your lender in lieu of foreclosure. The lender would need to accept the deed and release you from all remaining debt obligations. Both parties must agree to this action; however, lenders often lack the incentive to do so. Deterrents to this option are unpaid property taxes and the potential actions of other lienholders.

Perhaps the best option for halting foreclosure right away is filing for Chapter 7 or Chapter 13 bankruptcy. Upon filing for bankruptcy, the court issues an immediate automatic stay which prohibits creditors from taking action against you, such as filing a court action to obtain a judgment against you or proceeding with foreclosure. Banks often respond by filing a motion for relief from the stay and are often successful at getting the court to order the relief. Nonetheless, it may buy you another month or two to figure out if there are any other ways to stave off foreclosure.

You may be able to restructure all debt, including your mortgage, and keep your home in a Chapter 13 bankruptcy. In Chapter 7 bankruptcy, which discharges all debt, you would probably lose your home but discharge any mortgage payments you owe.

Experience You Can Trust: Oliva Law

Foreclosure is frightening and happens relatively quickly. It can be extremely overwhelming. You don’t have to face it alone with uncertainty. What you need is an advocate who can provide you with the information you need so you can make the best decision possible for your family.

At Oliva Law, we help people, like you, facing the possibility of foreclosure or those for whom the process has begun. We know that with a little legal guidance, you make choices that may lighten your financial stress and provide you and your family with a home, no matter where it is.

Let us help carry the load today. Call our office to schedule a free case consultation.