Behind on Mortgage Payments in Texas? Your First Steps

Say Gloria has fallen behind on mortgage payments on the Texas home she lives in, and no letter has come yet. Her hours at work have been cut. The latest statement shows a late charge, the servicer's number is saved in her phone, and each time she starts to dial, she sets the phone back down. Lying awake, she runs the same math and gets the same answer. Here is what comes next, with the rules that apply if you are in the same spot.

This guide is general information, not legal or tax advice; a HUD-approved housing counselor or attorney can apply it to your situation.

Read your note, then expect the servicer's call and letter

Start where Gloria would, with the papers already in the house. Her promissory note spells out what happens when a payment is missed (CFPB note explainer). The standard Fannie Mae and Freddie Mac note leaves blanks for when a late charge starts and how big it is, so your own note holds your numbers. Under that form, a short or late payment is a default.

If the payment stays unpaid, federal servicing rules (Regulation X) set two early steps:

• A call. The servicer must make good faith efforts to reach you live, by phone or in person, no later than the 36th day of the delinquency and again after each due date while you stay behind, then tell you about options if appropriate (12 CFR 1024.39(a)). A recorded voicemail does not count.
• A letter. By the 45th day, it must send a written notice with a phone number for staff assigned to you, examples of options that may be available, how to apply or learn more, and where to find HUD-approved housing counselors (Sec. 1024.39(b)).

These steps cover only a borrower's principal residence (12 CFR 1024.30(c)), and small servicers, reverse mortgages and certain Farm Credit System lenders are exempt. Under 12 CFR 1026.41(e)(4), a small servicer generally handles 5,000 or fewer loans, all made or owned by it or an affiliate. A bankruptcy case can also switch off the call requirement.

So if Gloria's loan sits with a small servicer, the call may never come. And if she lets unknown numbers ring through to voicemail, the servicer still meets its duty just by trying. Waiting for the phone is not a plan. Calling first is.

How many mortgage payments can you miss before foreclosure in Texas?

Say Gloria is wondering how many months behind she can get before foreclosure starts. Texas law does not set a number. The Texas Department of Housing and Community Affairs foreclosure FAQ says one missed payment already breaches the loan agreement, and that most lenders and servicers start the foreclosure process once a borrower is three payments behind.

Federal rules draw a firmer line. Under 12 CFR 1024.41(f)(1), a servicer generally may not make the first notice or filing for a foreclosure on a loan for your principal residence until the loan is more than 120 days delinquent, unless the foreclosure rests on a due-on-sale clause or joins another lienholder's case. Small servicers must respect this line too (Sec. 1024.41(j)).

In Texas, that first notice is generally read as the notice of sale. The CFPB's official commentary points to the earliest document the law requires to be recorded or published, and Texas requires the notice of sale to be posted at the courthouse door and filed with the county clerk (Property Code Sec. 51.002(b)). A Texas attorney can confirm that reading for your loan.

Something can still come sooner. For a home used as the borrower's residence, Property Code Sec. 51.002(d) requires a certified-mail notice of default giving at least 20 days to cure before a notice of sale. That letter is only mailed, so under that reading it can arrive before the 120-day line.

Say a certified-mail slip turns up in Gloria's mailbox. Leaving it at the post office does not slow anything down. Under Sec. 51.002(e), service is complete once the notice is mailed to her last known address, and the cure period counts from the day it is mailed, not the day she reads it. Keep your address current with the servicer, too (Sec. 51.0021).

How to catch up on missed mortgage payments

Now say Gloria is ready to make the call. The CFPB's page on what to do if you can't pay your mortgage says to be ready to explain why you can't pay, whether the problem is temporary or permanent, and your income, expenses and other assets. For Gloria, the second question is the hard one: she does not know yet whether her hours will come back. The answer shapes which option fits:

• Repayment plan. You add part of the past-due amount to your regular payment until you are caught up. The CFPB warns that the servicer may treat the loan as delinquent until then and may still report the delinquency to the credit bureaus (CFPB on repayment plans).
• Forbearance. You pause payments or pay less for a while, but you still owe the full amount. Depending on the plan, you repay it in one lump sum when payments restart, through higher payments for a set time, through payments added to the end of the loan, or with a new loan. Ask how interest adds up meanwhile (CFPB on forbearance).
• Loan modification. A change in the loan's terms, such as more years to repay, a lower interest rate, or forbearing or reducing part of the principal. Ask how it changes both your payment and the total you will owe (CFPB on modifications).

No servicer has to offer you any particular option (Sec. 1024.41(a)), which is one reason to bring in a HUD-approved housing counselor. Counselors help at little or no cost, and the CFPB's housing counselor search lists approved agencies. You do not have to pay anyone to help you avoid foreclosure. The CFPB's scam warning signs include an up-front fee, a promise that you will not lose your home, a request to sign over your title, and advice to stop paying your mortgage or to pay someone other than your servicer.

Send a complete application before the first notice

Picture the papers spread across Gloria's kitchen table: the servicer's form, pay stubs, bank statements and a short letter about her hours. Before any notice of sale, this packet may be the strongest tool she has.

Under 12 CFR 1024.41(f)(2), if you send a complete loss mitigation application before that first notice or filing, the servicer may not make it until one of three things happens: you are found not eligible for any option and any appeal is over or not taken, you turn down every option offered, or you fail to keep a loss mitigation agreement.

Complete is the servicer's call: it means the servicer has all the information it requires, and it must use reasonable diligence to get what is missing (Sec. 1024.41(b)). With no sale scheduled, it must tell you in writing within five business days whether the application is complete and what else it needs.

Two cautions. The hold generally works once: if you have stayed behind since a complete application the servicer already evaluated, it need not repeat these steps (Sec. 1024.41(i)). And small servicers are exempt from the hold; only the 120-day line and a ban on starting foreclosure while you keep a loss mitigation agreement apply to them (Sec. 1024.41(j)), so ask yours in writing how it handles applications.

Say Gloria photographs every page before it goes out and writes down how she sent it. If the servicer later says something is missing, she can show what went in.

If catching up is not realistic

Now say Gloria sits down with a counselor and the gap is too wide: even a modified payment would leave her short every month if her hours do not come back. That is a hard place to be, but it is a choice, not a verdict. Selling the house is another path. Our page on selling your house to stop a foreclosure explains how a sale pays off the loan at closing, and starting before any notice of sale means fewer deadlines are already running. If other bills are part of the squeeze, our guide to selling your house to pay off debt in Texas explains how homestead protection and liens work.

Where this guide stops: the notice of sale

If you are behind on mortgage payments and a notice of sale has already been posted at the courthouse, filed with the county clerk and mailed to you, new deadlines are running. The county must also post each filed notice on its website (Property Code Sec. 51.002(f-1)). From there, our guide on how to stop a foreclosure in Texas picks up, including reinstatement and bankruptcy.

For Gloria, the example ends before any of that. She has the servicer's letters, her copies of the application and the counselor's number on an envelope. Keeping the house or selling it is still her decision to make.

If you decide to sell

Cash Home Advisors buys houses in Dallas–Fort Worth, Houston, San Antonio and Austin. You sell as-is, no repairs, and there are no agent commissions. We pay all closing costs.

Asking is free, no obligation, and a real person calls you back. A cash offer is usually less than the house could bring on the open market after repairs, so listing can net more if you have the time and money for it. Request a cash offer, or read how our process works first.

Frequently asked questions

Sources

1. CFPB, Regulation X 12 CFR 1024.39, Early intervention requirements for certain borrowers
2. CFPB, Regulation X 12 CFR 1024.41, Loss mitigation procedures (including official interpretation 41(f)-1)
3. CFPB, Regulation X 12 CFR 1024.30, Scope (small servicer and principal residence limits)
4. CFPB, Regulation Z 12 CFR 1026.41(e)(4), Small servicer defined
5. Texas Property Code, Chapter 51 (Secs. 51.002 and 51.0021)
6. Texas Department of Housing and Community Affairs, Foreclosure Frequently Asked Questions
7. CFPB, Promissory note explainer (Fannie Mae/Freddie Mac uniform note)
8. CFPB, If I can't pay my mortgage loan, what are my options?
9. CFPB, What is a repayment plan on a mortgage?
10. CFPB, What is mortgage forbearance?
11. CFPB, What is a mortgage loan modification?
12. CFPB, Find a housing counselor

General information, not legal or tax advice. Talk to a Texas attorney or CPA about your situation.