After the sale, if the property sells for less than what is owed, the creditor may try to come after the borrower for the remainder of what is owed to them. This is referred to as a deficiency judgment. In nonjudicial foreclosures, a lawsuit must be filed in order to obtain a judgment to collect the deficiency. In judicial foreclosures, a second lawsuit needs to be filed. These lawsuits must be filed within two years of the sale.
If requested by the borrower, the remaining amount that is owed may be determined by the fair market value of the property.
State law giving borrowers the right to request the fair market value be used to determine the deficiency judgment amount owed.
An article from legal self-help publisher Nolo on how lenders can obtain deficiency judgments after a foreclosure sale.
After the foreclosure sale, if the property sells for a higher price than what is owed, the excess funds would then be used to pay off any additional liens that may be on the property. If no other liens exist, or if there are additional funds after the junior liens have been paid, the rest of the funds may be available to the former homeowner.
The clerk of the court will notify the former homeowner if there are any excess funds. The homeowner then has two years from the date of the sale to claim them.
Laws governing the disposition and claims of excess proceeds following a property tax lien foreclosure.
An article from self-help legal publisher Nolo on what happens when there are excess funds from a foreclosure sale.
The "right of redemption" refers to one's ability to reclaim the property even after the foreclosure sale takes place. In Texas, the "right of redemption" is only available for specific kinds of foreclosure actions such as foreclosures of certain tax liens and property owners association assessment liens.
The redemption period as well as how much it will cost will vary, so see the resources below for further details.
Law governing the "right of redemption" in a foreclosure involving an assessment lien of a condominium owners association.
Law governing the "right of redemption" in a foreclosure involving an assessment lien of a property owners association.
Law governing the "right of redemption" in tax lien foreclosures.An article from legal self-help publisher Nolo on the "right of redemption" after an assessment lien foreclosure by a property owners association.
An article from legal self-help publisher Nolo on the "right of redemption" after a property tax foreclosure sale.
Information from a private Texas real estate attorney on the "right of redemption" and things for potential buyers to keep in mind when purchasing properties at auction.
If the previous owner refuses to vacate the property after the sale, the new owner may need to file an eviction case against them in court in order to take possession of the property. See the Eviction page of our Landlord/Tenant research guide to learn more about this process.
For tenants who may be living in a home affected by foreclosure, see the Tenant Rights in a Foreclosure page of this guide for information on your rights during the foreclosure process.
An article from legal self-help publisher Nolo on eviction procedures after a foreclosure.You can borrow the e-books below with your library account. Don't have a library account? Texas residents can register for a library account online! Learn more about how to register online.
This State Bar of Texas manual covers foreclosure laws and procedures in Texas including debt collection, secured loans, bid evaluation, alternatives to foreclosure, and the specifics of foreclosure: notice of sale, conducting the sale, post-sale considerations, and penalties. Includes forms, foreclosure sale sites, and further Internet resources for all Texas counties.
This multi-volume set of e-books provides comprehensive coverage of real property law. Volume 1, Ch. 8 discusses nonjudicial foreclosures. Volume 4, Ch. 53 discusses real property security interests and Ch. 70 discusses property tax foreclosures. Volume 5, Ch. 100, §103.06 discusses property owners' association foreclosures.
With a foreclosure crisis looming, attorneys and homeowners alike will benefit from the straightforward information and advice this volume offers about foreclosure procedures and defenses.
"If you're one of the millions Americans who are having trouble making your mortgage payments or are already in jeopardy of foreclosure, this guide will give you the practical information you need, including: the ins and outs of foreclosure; how to decide if you should try to keep your house; federal programs to help you avoid foreclosure; alternatives to foreclosure, such as short sales and deeds in lieu; delaying or avoiding foreclosure with bankruptcy; and avoiding foreclosure scams." - publisher's description
"This treatise provides current, expert coverage on the law of mortgages, including the mortgagor-mortgagee relationship prior to foreclosure; mortgage substitutes; transfers by the mortgagor; transfers by the mortgagee; payment and prepayment; the foreclosure process; deficiency judgments and anti-deficiency regulation; priority issues; governmental intervention in the mortgage market; and financing real estate construction. " - publisher's description
This nutshell provides a quick overview of real estate finance law and touches on the mortgage market, real estate financing devices, and the underlying obligation as well as rights and obligations after default and before foreclosure.
