When homeowners are unable to make their mortgage payments, it is possible that the lender may move to foreclose on the property. In Texas, a mortgage servicer can start a foreclosure on behalf of a mortgagee if both parties have an agreement that says the mortgage servicer can service the mortgage. There must also be proper disclosure that contains the name and address of the mortgagee.
The property may then be sold at a foreclosure sale. In the event that the sale price is less than the balance owed, a deficiency judgement may be granted. However, any party seeking such a judgment must do so within two years of such a sale. The party from which a recovery is sought may ask the court to determine the fair market value of the property.
Fair market value will be determined by a combination of expert testimony and sales of comparable homes in the recent past. Holding costs and other costs related to selling the home may also be taken into consideration when calculating a fair market value for the property. If there is no request to determine the fair market value of the property or no reasonable value can be determined, the sales price will be used to calculate the size of any deficiency.
Those who are looking to put a halt to a mortgage foreclosure may wish to file for bankruptcy. Bankruptcy may enable an individual to reorganize or discharge certain debts, which may make them easier to manage. Filing for bankruptcy may also make it possible to obtain a stay from creditor contact. An attorney may be able to review a case to determine what type of bankruptcy may be appropriate for that individual.