Although various sources show Texas to be a “nonjudicial” foreclosure state (e.g., here), or generalize about the length of time required to foreclose (e.g., here), Texas has three different processes that are used to foreclose on a homestead, depending on the type of debt involved.
I. Original Purchase Money or Refinance – Nonjudicial
There is the standard original purchase loan (loan used to purchase the home), or the refinance of the original purchase loan, both of which can be foreclosed without any judicial involvement–assuming there is a valid deed of trust. A deed of trust is, of course, not a deed or a trust; it is a document that allows the creditor (who lent the money to purchase a home, or refinance a debt used to purchase a home), the right to foreclose without obtaining a court order. A chart that shows this process is here.
Texas has a two-step process in order to foreclose on these debts: 1) a first notice of at least 20 days notifying the borrower of the default and giving him a right to cure; and 2) a second notice of the sale giving the borrower and the public at least 21 days notice of the sale (and the sale can only be on the first Tuesday of a month). Typically, the lender hires attorneys to perform the foreclosure, including sending the notices (which must be sent by certified mail). Texas law does not require that the borrower actually receive the notices. The sale can occur as soon as 10 am on the first Tuesday of the month. At the sale, a lender’s attorney is often designated as a trustee and puts the property up for sale to the highest bidder. Typically, the trustee accepts a bid from the lender for the outstanding balance of the loan and the lender is the winning bidder at the sale.
While it is possible that a lender will bid less than the loan amount owed (and create the chance for a deficiency), that is not typical. [Some reasons include the fact that a borrower has defenses in a deficiency situation, and even if the lender wins, it is difficult to collect a deficiency judgment from an indigent borrower in Texas as compared to other states (for example, in Texas a home loan creditor cannot garnish current wages)]. Thus, there is less need to worry if the lender will not agree to a short sale (in which a lender agrees to lower the amount owed to the amount the homeowner can sell the property for, and then avoid any chance of a lender pursuing the homeowner for a deficiency judgment).
There is no right of redemption upon a foreclosure of these loans. This means that the former homeowner does NOT have any absolute right to buy the property back from the high bidder after the foreclosure sale (but the former homeowner can ask the high bidder if it will agree to let her buy the property back), and there are few defenses to an eviction case brought by the new owner against the former homeowner (Note: Tenants that were renting the property from a landlord who was foreclosed on are still entitled to continue their lease, and if the lease is expired they still get a 90 day notice to vacate; article here). Review the chart here for more details, and Chapter 51 of the Texas Property Code.
Unless a lender voluntarily agrees to stop a foreclosure, a temporary restraining order must be entered by a judge or the filing of a bankruptcy must be accomplished prior to a sale.
II. Home Equity Loans and Property Tax Loans – Hybrid (nonjudicial and judicial combined)
For loans that provide a borrower cash, that consolidate debts, that refinance this kind of debt, or that are used to pay property taxes, the lender must obtain court approval to sell the home at a foreclosure sale. After the first notice is sent, and the homeowner has not cured the default, the lender must apply to a court (district usually, but county court in some jurisdictions) to request an order to foreclose. Usually, the fastest way that a lender can do this, is by filing an application for expedited foreclosure. The application is filed and a copy mailed by certified mail to the borrower (not served by a sheriff or constable). The homeowner is the respondent, and has 38 days to file a response to the application. If the respondent files a response in writing, the court will set the matter for a hearing. No evidence is usually heard from the witness stand; instead, the court reviews the documents on file to see if the applicant is entitled to foreclose. If so, the court will authorize the foreclosure to occur and the procedure will proceed just as in nonjudicial cases (second notice will be sent, giving borrower and the public at least 21 days notice that a sale will occur). See Rules 735-736 of the Texas Rules of Civil Procedure for more information here.
In order to stop an application from being granted, a suit challenging the foreclosure often needs to be filed before the order is signed (a temporary restraining order is not required). Even if a court grants the application, however, a borrower may still be able to prevent the foreclosure by obtaining a temporary restraining order or filing for bankruptcy before the first Tuesday when the home is scheduled to be sold.
Tax lenders have the same process, but it should be noted that a tax lender can foreclose only if the government can foreclose (for example, if the homeowner elects to defer as explained below, then a tax lender cannot foreclose either).
There is no right to redeem after a foreclosure of a home equity loan, but the lender cannot sue the homeowner for the deficiency if the property is sold for less than the amount owed.
III. Property Taxes Owed to the Government – Judicial
The government must file a traditional lawsuit (no application for expedited foreclosure) in order to have a home sold to pay for property taxes owed. Lenders can always use this method as well; however, this method does take longer in most cases. At the conclusion of a case, and if the homeowner loses, the judge orders the property sold at auction which is conducted by a sheriff or constable on the first Tuesday of a month.
Even after suit is filed, most taxing entities will enter into payment agreements with homeowners in certain circumstances. If a homeowner is 65 years of age or older, or disabled (defined as entitled to receive SSI disability payments), the homeowner may request a deferral — postponement. (If the homeowner is elderly or disabled, she may also obtain an extra exemption which lowers the tax bill, but it alone does NOT stop a tax foreclosure. Only a deferral affidavit stops the foreclosure activity). The deferral can be obtained merely by filing an affidavit with the appropriate appraisal district. Form here.
If a tax collection suit has been filed already, the affidavit must be sent to more officials by a certain time period in order to stop the sale (e.g., attorneys for the taxing entities, sheriff or constable that conducts the sale, appraisal district). The deferral only works for the government (and for tax lenders). If the homeowner still owes money for the purchase of the home or a home equity loan, then a deferral affidavit will not stop a foreclosure for nonpayment of the taxes. The lender almost always has language in the documents that requires the taxes to be kept current; so the government may not foreclose for a deferral, but some other lender might. A homeowner can still file bankruptcy as well to stop a foreclosure for nonpayment of property taxes.
There is a right to redeem after the government forecloses for nonpayment of taxes — that is the homeowner has the right to buy the property back from the high bidder at the foreclosure sale. In general, the person will have to pay an extra amount (more than the amount paid by the bidder), and for homesteads that were lost to foreclosure the person has two years to buy it back. In general, there is a 25 percent premium required to be paid in the first year, and a 50 percent premium in the second year (you should check the law on this issue depending on the exact type of property involved because mixed uses have different formulas). The amount required to be paid back will also grow over the two year period because the person will have to pay for any amounts used to maintain the property.
Although a deficiency judgment is possible, often the property is sold for more than the tax amount owed creating excess proceeds. The excess is deposited with the registry of the court and a homeowner must apply to the court to obtain it (and after time passes it is forfeited to the state).
Josh Fuhrman, a representative of the Homeownership Preservation Foundation (you know, the lender-funded and controlled organization that runs the national “Hope Hotline,”that everyone says to call), appeared at a packed townhall meeting on October 5, 2009 about the foreclosure crisis at the Center for Changing Lives in South Minneapolis, and said this in response to the slow moving pace of the industry to modify loans under the HAMP program created in March:
“We don’t want to mention bankruptcy [in a foreclosure prevention guide] because it is so detrimental to borrowers.”
The Supreme Court of Kansas recently referenced a Bankruptcy Court from Massachusetts that said:
It is no surprise that private lenders and their lawyers are attempting to push tenants out of a property after they foreclose so they will not have to comply with the 
What about all these other foreclosure task forces scattered throughout the country? No better.