Foreclosure Law in Texas
In Alamo, Texas is a process allowing a lender of a mortgage to take possession or ownership of the property that secured the mortgage in the first place, to cut their losses when a borrower defaults on his or her loan.
When consumers have to deal with foreclosure, it almost always involves a home. The bank will typically take possession of the house, and then sell it at auction, to try to cover the balance of the mortgage. Banks usually want sell the property quickly, for as much money as possible.
In Texas, and every other state, foreclosed homeowners can go through a "foreclosure by judicial sale." In this type of foreclosure sale, a court supervises the sale, ensuring that the bank makes every reasonable effort to get the highest price possible for the house. The purpose of this is to maximize the chances that the bank gets, at the very least, the remaining balance of the mortgage. Although this may seem counter-intuitive, it is intended to protect the borrower: it helps prevent them from still owing money after the house is sold at auction.
In some states, original mortgages are considered "non-recourse" loans. This means that once the house or other property that secured the mortgage is sold, and if it sells for less than the balance of the mortgage, the lender has to absorb the loss, and cannot sue the borrower for the remainder. This usually does not apply to second mortgages or refinanced loans.
How to Possibly Avoid Foreclosure in Alamo, Texas
It is absolutely essential that you maintain a line of communication with your lender. Your can't expect your lender to accommodate your changed financial situation if they don't know about it. Ignoring the issue and hoping it will go away is the worst possible solution.
Bear in mind that banks aren't in the business of real estate speculation - they're in the business of lending money, and making profits through interest on their loans. In short, the bank doesn't really want your house - they'd much rather have you continue making your mortgage payments. For banks, foreclosing on a home is a last resort. Basically, nobody likes foreclosures, and everyone wants to avoid them.
Because banks don't particularly enjoy foreclosing, they will probably be willing to work out an alternative payment plan with you, if necessary. However, if you think that this might be needed in the near future, you should contact your lender immediately. The sooner they know about it, the more options you have.
As a last resort, you might consider a "short sale," which results in loss of the home, but it usually leads to a great deal of the debt on the mortgage being forgiven. Essentially, a short sale in Texas involves selling the house for whatever price it can fetch. The proceeds from the sale go to the lender, and if it sells for less than what's left on the mortgage, the balance of the debt is forgiven.
Can a Alamo, Texas real estate attorney help?
If you live in Alamo, Texas and believe that your house is in danger of being foreclosed, you may have more options and protections than you think. You may not know what all of them are, but an experienced real estate lawyer probably will.