• Knowing home repossession laws in Texas may help you keep your home.home sweet home image by David Dorner from Fotolia.com
  
  With 29,838 foreclosures in the third quarter of 2009 alone, home repossession laws are on the mind of many Texans. In a shaky economy, it's smart to consider the state foreclosure and repossession laws before they directly affect you. Knowing these laws will help you to be prepared in the event of unfortunate circumstances.
  
  

Foreclosure Types

• In the state of Texas, there are both judicial and non-judicial foreclosures, though non-judicial foreclosures are the most common way homes are repossessed. Judicial foreclosures occur where no power of sale clause exists in the terms of the mortgage. A lawsuit must be filed, after which the property will be sold at auction. However, most mortgages have this clause, by which the homeowner agrees in advance that the bank may sell his home if he fails to live up to his financial agreement.
  
  

Foreclosure Procedure

• A specific process exists in Texas for repossessing a home with a power of sale in the mortgage. After defaulting on loans, the bank must send you a letter informing you that you have 20 days to repay all delinquent charges. After a homeowner fails to bring her account current the bank must file a notice of foreclosure with the county clerk. This notice is then mailed to the homeowner as well as posted on the door of the county courthouse. The notice cannot be delivered fewer than 21 days prior to the foreclosure sale.
  
  

Foreclosure Sales

• Texas law regulates foreclosure sales on repossessed homes. All foreclosure sales in Texas occur on the first Tuesday of the month, even if this day is a legal holiday. Auctions are held on the steps of the local county courthouse. Anyone may bid, including the foreclosed property's former owner. All payments must be in cash, with the highest bidder winning the house.
  
  

Redemption

• Unlike many other states, Texas law does not have the right of redemption. Once the allotted 20 days have passed, a homeowner may not retain possession of a house by making all delinquent payments and bringing his account current.
  
  

Deficiency Judgments

• In Texas, banks may obtain deficiency judgments from homeowners. This means that the former homeowner can be sued by the bank for damages. However, Texas state law limits the amount of damages to the difference between fair market value of the home and what it sold for at auction. Banks are not entitled to the full value of the outstanding mortgage under Texas law.