What is a foreclosure by judicial sale?

If you’ve fallen behind in making your mortgage payments here in San Antonio, then it’s likely that your lender has initiated foreclosure proceedings. Your case may have reached the point where a Texas judge presiding over the matter is prepared to enter an order for a judicial sale so that the mortgage company can recover what they’re owed. There are certain steps that a lender must take before they can pursue this foreclosure option.

Lenders must take time to identify “necessary” parties, or anyone who has an interest in the property before it can be offered up for a judicial sale. This means that banks and mortgage companies must identify anyone who is leasing the property, has placed a lien on it or maintains an easement on the property in question. Once these parties are identified, they can be added or “joined” to the lawsuit against the debtor. The goal of doing this is to terminate their property rights.

The next step lenders must take is to identify those individuals with “proper” rights to the property. This includes anyone with a pre-existing relationship with it long before any mortgage was ever taken out. These individuals’ rights to the parcel generally don’t change as part of the foreclosure process. Most jurisdictions’ laws require them to be included as plaintiffs in any lawsuits regarding such matters though.

A judicial sale generally involves a local sheriff’s department offering up a foreclosed property for sale. Either an outside party or the mortgage company can enter a bid for the home. The former is referred to as a junior lienholder if they submit a winning bid. That individual can take various courses of action including foreclosing on the lien and paying off the mortgage on the property if they’d like to secure a clear title to the home.

Mortgage companies may sue homeowners in an individual capacity for any deficiencies between what a house goes for at a judicial sale and what’s due on the mortgage if necessary.

If you’ve fallen behind on your mortgage payments and your home is about to be foreclosed on, then you need to act swiftly. The foreclosure process moves quite fast. Your home isn’t completely gone until it’s sold on the courthouse steps. An attorney can advise you on what you can do to keep this from happening in your case.