Helpful Homebuyers USA

Foreclosure Surplus Funds in Texas

In Texas, non-judicial foreclosure sales (the most common type) are governed by the Texas Property Code. If a foreclosure auction generates more than the outstanding mortgage balance plus costs, the excess must be paid to junior lienholders first, then to the former homeowner. The trustee is required to account for surplus funds, and you must file a claim. There is no statutory deadline for a former homeowner to claim surplus funds in Texas, but the sooner you act, the easier recovery is. Texas also has a 2-year right of redemption for tax lien sales (Tax Code §34.21).

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Foreclosure Surplus Funds in Texas — FAQ

Contact the trustee named in the foreclosure notice or the foreclosing lender's attorney. Request an accounting of the sale proceeds and any surplus. If they do not respond, a surplus funds attorney can send a formal demand or file a court petition.

If your property was sold at a tax foreclosure sale in Texas, you have 2 years to redeem it by paying the purchaser the sale price plus 25% (or 50% in the second year) plus any taxes they paid. Contact us immediately — the clock is ticking.

Yes — this is the best outcome for most homeowners. If we close before the foreclosure auction, you receive the full equity above your debts rather than only the surplus (if any) left after auction costs. We can close in as little as 7 days.

Many are legitimate, but some charge excessive fees (up to 50% of recovery). Be cautious. We connect you with attorneys who work on reasonable contingency fees and give you a clear accounting of costs before you sign anything.

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