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:
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.
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."
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.
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.
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."
The entity that issued the loan to pay for the property. Also sometimes referred to as the "mortgagee."
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.
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.
While commonly mistaken for the "mortgage", the promissory note is the actual document that contains the promise to repay the amount that was borrowed.
The contract used to create a lien on the homeowner's property, typically a deed of trust or a mortgage.
A company that is hired by the lender to manage the loan. Also sometimes referred to as a "mortgage servicer" or "loan servicer."
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.
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.
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.
State laws governing requirements for action to repossess, foreclose, or accelerate payment of entire debt on a manufactured home.
State laws governing the foreclosure process.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.
