Texas Mortgage Deficiency Balance

Texas Mortgage Deficiency Balance

How long does a mortgage company have, to file a deficiency judgment in Texas?

How long does a mortgage company have to file a deficiency judgment in Texas? If they do not file the deficiency judgment within the allowable timeframe, can they still come after us for any money owed? If the money is not paid back to the mortgage company, will the foreclosure / voluntary repossession always stay on your credit report or will it eventually come off (such as after 7 years)? Our ex-mortgage company foreclosed on our property in March of 2005, they are calling it a voluntary repossession - we had moved but were still actively trying to sell the property (Realtor’s sign out front, cleaned up, all appliances still there, etc.); they called it abandoned and began foreclosure proceedings; they say they sent letters to us but we never received them even though we received other correspondence, such as a new payment stub book, from the company before and after they sent the foreclosure letter; more to that end of the story but that’s the short version!]; we contacted them via a certified letter shortly thereafter with our updated contact information and requested them to let us know the status of our account with them. They never responded to that request but recently contacted us with a "settlement" offer for the remaining balance on our account. We are trying to determine if we should attempt to pay it or just let it be. If they no longer have a legal recourse to get the money, and it will clear off our report in a few years, we are just going to leave it be and let it eventually go away on it’s own. If this will not solve the problem we will need to figure out what we need to do and/or what our best option will be at this point.

Under Texas law, mortgage companies that foreclose on a Texas home can pursue the former homeowner for two years to collect on any deficiency balance owed on the mortgage after foreclosure sale.

Since your foreclosure took place in March, 2005, I would suspect that the statute of limitations to sue you to collect on the deficiency balance has expired. However, consult with a Texas attorney to determine what legal recourse, if any, the creditor still has against you.

If you determine that the statute of limitations has expired, then you likely need not worry about the mortgage company suing you to collect on the deficiency balance owed on the mortgage. However, you should know that the expiration of the statute of limitations generally does not prevent a creditor from calling or sending you letters to try to collect on the debt. It only provides you with an absolute defense in court if the creditor tries to sue you for the amount still owed on the mortgage note. Again, you should speak with your attorney to determine what liability you still have for this outstanding mortgage balance. To learn more about foreclosure, I encourage you to visit the Bills.com Foreclosure page.

Credit report and foreclosure

Concerning your credit report, the foreclosures should appear on your credit report for seven years from the date of the entry of the foreclosure judgment. In your case, this means that this listing can likely appear on your credit report for at least four more years.

Unfortunately, there is not much you can do to remove a foreclosure listing from your credit report if the entry is correct. However, if you are not worried about this listing appearing on your credit report for the next few years, it may not be worth your money to repay this mortgage deficiency balance. For more information about credit reports and credit scoring, I encourage you to visit the Bills.com Credit Help page.


You should understand that the fact that your former mortgage holder mailed you a letter asking you to make payments on your old delinquency balance does not mean that you are legally obligated to pay the debt. If the statute of limitations has expired, then your best option may be to not pay the debt and to simply let it fall off your credit report with time. Again, you should discuss the situation with your attorney to determine the best solution available to you given your financial situation.

I hope this information helps you Find. Learn & Save.





EEfinityMortgage.com, Jul, 2010
"Letting it be" is never the right option -- it will only come back to haunt you at a most inopportune time. Contact your mortgage servicer to find out all the details of your foreclosure and work with them to make arrangements that work for you and the servicer.
BBill, Oct, 2009
If I understand your question correctly, the statute of limitations in Minnesota for this type of debt is six years. Please see Collection Laws and Statute of Limitations.
MMatt, Oct, 2009
How long does a mortgage company have to file a deficiency judgment in Minnesota?
BBill, Oct, 2009
Debt related to foreclosure is unsecured. In the eyes of the law, debt related to foreclosure is no different than a credit card debt, medical debt, a deficiency balance from a repossession, or a payday loan. Therefore, I want you to read two of my recent answers to other readers who had similar questions regarding unsecured debt. First, read "What Are My Debt Consolidation Options?" Second, read "Collections Advice." This will help you understand your rights as a consumer. Regarding your lien question, yes, the bankruptcy trustee has the option to remove liens as a part of a bankruptcy discharge. See the Bills.com bankruptcy page for more information.
ccrimson, Oct, 2009
If we foreclose on a house in Illinois, can that lendor put a lien on our house in Arkansas? If we then file bankruptcy, would the lien be lifted?