Foreclosure is a legal procedure in which a mortgage lender recoups some of its losses in the event of default by acquiring possession and/or ownership of the home that secured the loan in the first place in Krum, Texas When a house is foreclosed, it is typically sold at auction shortly thereafter. This is because banks typically want to get rid of the property as soon as possible, even if it means losing some money, and an auction is an simple way to do this.

In every state, including Texas, there is an option to go through foreclosure by a judicial sale, which is a process in which a court supervises the sale of the property, and makes sure that the proceeds first go the to the holder of the mortgage, then to anyone else who may have a lien on the property, and lastly to the debtor if anything is left. In numerous states, original mortgages (as opposed to refinanced loans) are "non-recourse" loans, meaning that the most the lender can collect is whatever the foreclosed property sells for. The bank cannot go after the debtor for the balance, if the sale nets less than the amount due. You should consult an attorney in Krum, Texas to learn the details of the law here. You should also know that this rarely applies to loans that have been refinanced.

How Can I Avoid Foreclosure in Texas?

First of all, you shouldn't dismiss the problem. You should stay in contact with your bank, and be forthright with them. Ignoring the issue will not make it go away. You should remember that banks in Krum don't want your house. While the foreclosure process can be devastating for the homeowner, it's no walk in the park for the bank, either. They expected to make a profit through interest on the loan paid over time, and foreclosure is a last resort, allowing them to cut their losses and move on. If you are forthright with them, lenders will typically try to accommodate your changed financial situation, to avoid a default on your part, and the necessity of foreclosing on their part.

If you can't work things out with your lender, there are other avenues. You can try a "short sale," which is when you sell your house for whatever amount you can get for it, and use the proceeds to pay your mortgage. If the house sells for less than you owe, the bank still receives those proceeds, but the remainder of the loan will be forgiven. You might also consider a "short refinance" which allows a part of the debt to be forgiven, and lets you refinance the rest.

How Can A Krum, Texas Attorney Help?

If you are facing the possibility of foreclosure, a good Krum, Texas real estate lawyer can help. At the very least, they will be able to inform you of your legal options.