If you loan someone money and the loan is secured by real estate in Texas, you may have the right to have the real estate sold to pay the loan if you are not repaid.
As a lender with a defaulted loan, the Dallas foreclosure process may be daunting. However, in some cases, a Deed in Lieu of Foreclosure could be an option. When a borrower defaults, it is wise to utilize the services of a real estate attorney who understands the complicated process of foreclosures.
Terms used in Foreclosure
- Real estate which is used to secure a loan is called “Collateral.”
- The person who loaned the money is called the “Lender.” The Lender may also be the Seller if the property was sold using Seller financing.
- The person who owes the money is called “Borrower.”
- “Foreclose” is when the Seller takes the collateral and applies it to the Loan.
- A “Foreclosure Sale” is when the property is taken and sold at public auction to the highest bidder. The money from the sale is then applied to the loan.
- The person who conducts the foreclosure sale is called the “Trustee” or the “Substitute Trustee.”
Collateral for a loan may also be a car, jewelry or other items of personal property.
Foreclosure sales in Texas are conducted on the 1st Tuesday of the month.
Note: If a Lender tries to foreclose improperly, the Debtor may have the right to sue the Lender.
Also of note: The Debtor may have the right to file for bankruptcy protection.
Deed in Lieu
A common alternative to foreclosure, is a Deed in Lieu of Foreclosure. If the Lender agrees, the Borrower gives the Collateral to the Lender and the loan is canceled.
Loan Modification Agreement
Another common alternative is a Loan Modification Agreement. This document allows the parties to renegotiate the terms of the loan.
Do you have questions about Foreclosure? Speak directly with attorney Scott Steinbach at 972-960-1850 for a free consultation.
R. Scott Steinbach is AV Preeminent rated by Martindale-Hubble. Peer rated for Highest Level of Professional Excellence.