In Texas, lenders have two options to foreclose on a property in default: judicial foreclosure which involves a court order, or non-judicial foreclosure which is more common and involves a power of sale clause. For non-judicial foreclosure, the lender must send notice at least 20 days before foreclosure and post a notice at the county courthouse at least 21 days before auctioning the property to the highest bidder. Deficiency judgments are allowed in Texas to recover any remaining unpaid portion of the defaulted loan.

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Texas Foreclosure Law Summary
WHAT IS A SHORT SALE
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WHY USE SHORT SALE US
- Judicial Foreclosure Available: Yes
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- Non-Judicial Foreclosure Available: Yes
WHO QUALIFIES FOR A SHORT SALE
- Primary Security Instruments: Deed of Trust, Mortgage
FAQs
- Timeline: Typically 60 days
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- Right of Redemption: No
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- Deficiency Judgments Allowed: Yes
STATE FORCLOSURE LAWS
In Texas, lenders may foreclose on deeds of trusts or mortgages in default
CONTACT US using either a judicial or non-judicial foreclosure process.
HIRE US Judicial Foreclosure
The judicial process of foreclosure, which involves filing a lawsuit to obtain a
court order to foreclose, is used when no power of sale is present in the
mortgage or deed of trust. Generally, after the court declares a foreclosure,
the property will be auctioned off to the highest bidder.
Non-Judicial Foreclosure
The non-judicial process of foreclosure is used when a power of sale clause
exists in a mortgage or deed of trust. A "power of sale" clause is the clause in
a deed of trust or mortgage, in which the borrower pre-authorizes the sale of
property to pay off the balance on a loan in the event of the their default. In
deeds of trust or mortgages where a power of sale exists, the power given to
the lender to sell the property may be executed by the lender or their
representative, typically referred to as the trustee. Regulations for this type of
foreclosure process are outlined below in the "Power of Sale Foreclosure
Guidelines".
Power of Sale Foreclosure Guidelines
If the deed of trust or mortgage contains a power of sale clause and specifies
the time, place and terms of sale, then the specified procedure must be
followed. Otherwise, the non-judicial power of sale foreclosure is carried out
as follows:
Prior to proceeding with a foreclosure, Texas laws state that the lender must
mail the borrower a letter of demand, informing the buyer he has twenty (20)
days to pay the delinquent payments or foreclosure proceedings will begin.
At some point after the borrowers twenty (20) days have expired, but at least
twenty one (21) days before the foreclosure sale, a foreclosure notice must

2. be: 1) filed with the county clerk; 2) mailed to the borrower at their last known
address; and 3) posted on the county courthouse door.
The foreclosure sale must take place on the first Tuesday of any month, even
if said Tuesday falls on a legal holiday, but only after the proper preliminary
notices have been given. The sale is on the courthouse steps by auction to
the highest bidder for cash. Anyone may bid, including the lender, who bids by
canceling out the balance due on the note, or some part of it.
Lenders may obtain deficiency judgments, but they are limited to the
difference between the fair market value of the property at the time of sale and
the balance of the loan in default.
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