General Information

About This Guide

Foreclosure is the legal process that allows for a piece of property to be sold in order to satisfy certain debts that are owed by the property owner.

This guide was created to help provide information on how the foreclosure process works in Texas. It includes the following:

links to Texas and federal laws that govern the foreclosure process
resources that will help you better understand the laws
information on who to contact if you are facing foreclosure

Important Terms

There are many legal terms used in the foreclosure process that non-lawyers may not know. Below are some terms that are helpful to understand when facing a foreclosure. Other pages in this guide will provide more information about how they factor into the process.

Borrower
The borrower is the individual (often the homeowner) who borrows money and pledges the home as security to the lender for the loan. Also sometimes referred to as the "mortgagor."
Deed of Trust
A contract used to create a lien on the property. Unlike a mortgage, a deed of trust involves three parties: the borrower, the lender, and the trustee.
Lien
A notice that a creditor can file in the public records on a piece of property (like a home) to let everyone know that you owe them money. If certain kinds of debt are not paid (examples being a home loan, property taxes, or assessments from a property owners association), the creditor can then foreclosure on that property and use the money it receives from the sale to pay what is owed to them.
Lienholder
A creditor who has placed a lien on a piece of property. Also sometimes referred to as the "lienor". Some lienholders, like your home loan lender, are more important than others and take priority (i.e. will get paid first) if the property is foreclosed upon. These lienholders are sometimes referred to as "senior lienholders" while the others are referred to as "junior lienholders."
Lender
The entity that issued the loan to pay for the property. Also sometimes referred to as the "mortgagee."
Mortgage
A contract between the lender and the borrower that can be used to create a lien on the property. In Texas, deeds of trust are more commonly used to create a lien than a mortgage.
Power of Sale
Language that can be found in the contract that gives the lienholder the authority to foreclose on the property through the non-judicial foreclosure process, which does not require the lienholder to file a lawsuit against the homeowner.
Promissory Note
While commonly mistaken for the "mortgage", the promissory note is the actual document that contains the promise to repay the amount that was borrowed.
Security Instrument
The contract used to create a lien on the homeowner's property, typically a deed of trust or a mortgage.
Servicer
A company that is hired by the lender to manage the loan. Also sometimes referred to as a "mortgage servicer" or "loan servicer."
Trustee
An independent party to the "deed of trust " whose primary function is to handle the foreclosure process if the loan goes into default. This can sometimes be a title company or an attorney, but most often it is a company whose sole purpose is to handle nonjudicial foreclosures.

Additional terms can be found at the link below.

Foreclosure Terminology
A glossary of terms as well as links to helpful articles from legal self-help publisher Nolo for those just beginning their research into the foreclosure process.

Laws on Foreclosure

Below you will find references to areas of Texas and federal law related to foreclosure. If you find these statutes difficult to understand, please see the Understanding the Law resources below for a "plain English" explanation of these laws.

Texas Law

Chapter 22 of the Texas Business & Commerce Code
State laws governing the sale of residential real property under power of sale.
Section 347.356 of the Texas Finance Code
State laws governing requirements for action to repossess, foreclose, or accelerate payment of entire debt on a manufactured home.
Chapter 51 of the Texas Property Code
State laws governing the foreclosure process.
Section 82.113(g) of the Texas Property Code
Law governing the "right of redemption" in a foreclosure involving an assessment lien of a condominium owners association.
Section 209.011(b) of the Texas Property Code
Law governing the "right of redemption" in a foreclosure involving an assessment lien of a property owners association.
Chapter 34 of the Texas Tax Code
State law governing tax lien foreclosures.

Federal Law

Chapter 13 in Title 12 of the U.S. Code
Federal laws governing foreclosures across the United States.
Section 7425 in Title 26 of the U.S. Code
Law governing the "right of redemption" by the United States to satisfy federal tax liens.
Chapter 50 in Title 50 of the U.S. Code
Federal law governing civil relief for servicemembers. See Subchapter III for sections regarding the foreclosure protections for those on active duty.
Protecting Tenants at Foreclosure Act (Public Law 111–22, Title VII)
Federal law providing protections for tenants living in properties affected by foreclosure.

Federal Rules

Title 12, Section 1024.41(f)(i) of the Code of Federal Regulations
Federal regulation issued by the Consumer Financial Protection Bureau that states the mortgage loan obligation must be over 120 days delinquent before initiating a foreclosure action.

Understanding the Law

Facing Foreclosure
This publication from the Texas Young Lawyers Association provides an overview of the foreclosure process in Texas.
Foreclosure in Texas
A Texas real estate attorney provides this in-depth look at the foreclosure process in Texas.
A Homeowner's Rights Under Foreclosure
This publication, written in 2009, from the Texas A&M University Real Estate Center discusses Texas laws on home foreclosures and the foreclosure process focusing on ways homeowners can protect their homes from improper foreclosures.
TexasLawHelp.org - Foreclosure
A list of the foreclosure resources available on TexasLawHelp.org.
Nolo - Texas Foreclosure Law Center
A list of foreclosure-related articles available from legal self-help publisher Nolo.

E-Books from the Texas State Law Library

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 .

Texas foreclosure manual [electronic resource]
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.
Texas real estate guide [electronic resource]
This multi-volume set of e-books provides comprehensive coverage of real property law, transactions, and litigation. Along with drafting guides and forms, it includes discussions of the law with citations to statutes, case law, regulations, and court rules.

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.

Home foreclosures : including reverse mortgages, tax liens, condominium liens, land installment sales, and seizure of manufactured homes [electronic resource]
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.
The foreclosure survival guide : keep your house or walk away with money in your pocket [electronic resource]
"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
Real estate finance law / [electronic resource]
"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
Real estate finance in a nutshell / [electronic resource]
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.