Mortgage Foreclosure Facts

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Quiz
Mortgage Foreclosure Facts
By Judon Fambrough
April 2002

With foreclosures on the rise, now might be a good time to test your knowledge of current Texas mortgage foreclosure laws. Laws governing tax foreclosures and property owner association foreclosures sometimes differ and are not included in the quiz.

In a lending arrangement, the mortgagee is the borrower and the lender is the mortgagor.
T F
In Texas, the homeowner who loses the home in foreclosure has the right to redeem the home for two years following the sale.
T F
Texas law requires that a home be sold for fair market value at a foreclosure sale.
T F
Before the promissory note may be accelerated prior to foreclosure, the lender must give the homeowner 21 days to cure the payments in arrears.
T F
Foreclosure sales take place only on 12 days during a year.
T F
A homeowner may avoid foreclosure by transferring the deed to the lender. This is known as a deed in lieu of foreclosure. The lender's consent is needed to implement the process.
T F
The lender has four years to sue for a deficiency judgment if the foreclosure fails to generate sufficient revenue to cover the unpaid balance of the promissory note and associated costs of the sale.
T F
If the lender sues for a deficiency judgment, the price the home sells for at the foreclosure sale conclusively sets the fair market value of the property.
T F
The lender cannot collect installment payments that are delinquent more than four years.
T F
If an irregularity occurs in the foreclosure process, the homeowner may sue for damages or have the sale rescinded (cancelled), depending on the circumstances.
T F

For an explanation to all answers, click here.

For more information on foreclosure, see the Center's publication 825, "A Homeowner's Rights Under Foreclosure"; publication 652, "Force Sale Remedies"; and publication 613, "Transfer the Deed, Cancel the Debt: Alternative to Foreclosure."

Fambrough is an attorney, member of the State Bar of Texas and senior lecturer with the Real Estate Center at Texas A&M University.

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