Help w/ Foreclosure Rules Texas

Bought a property at trustee sale back in Nov 04.

When notifing current folks living at the property that I was the new owner, found out they had bought it from the forclosee (person who did not pay bank) on a wrap. Ouch !

Anyway, informed them that there position had been wiped out due to foreclosure. I felt sorry for them, they had completly remodeled this house. I told them that I would be willing to sell it back to them, but they said they had no money because of the rehab.

Anyway, I offered to give them a year to get a bank loan. I had my attorney draw up a deed of trust, etc. 12 months of payments, baloon due end of 05.

Well, first of year came around and they still don’t have a loan. They asked if I would take $5000 to hold off foreclosure. I said sure, send me a certified check and I’ll give you four months. So, that was the first of Jan 06. Havn’t heard from them since. So, had my attorney send default notice to start foreclosure process.

Funny, today I get a certified mail envelope with a check for a monthly payment amount. They never sent their monthly payments certified.

I started to deposit it, but remember reading in the law books about a case where court found in favor of home owner, because bank had accepted less than full amount in past. This simply allowed owner more time in home under default. I’d like to use the check to defer some of the taxes I need to pay on their property.

My attorney is out of town, so thought I’d ask here about any known laws. Any help?

i do beleive that if u accept the pmt and cash it, u will have trouble continuing ur foreclosure just like a lender would. i’d suggest u continue talking to u attorney even if on vacation, or at worst wait for him to come back. i do not have all the info u need, and I am not an attorney. however, i do beleive u r correct. maybe someone else will come around and have more insight.

And the scum-sucking foreclosee is why the legislature in Texas has it out for REI......  >:(  Stories like that infuriate me and make want to track down, maim and kill the dirtbag. Please share his name with the board for the protection of anyone investing in Texas.


jeeze david, do u really have to maim? :o

I’m talking about going medieval on him…Maiming would be the least of his problems.

Well - I decided to send their monry back to them. Indeed - the occupants got screwed, as they had given the forclosee a good down payment, plus rehabbed the place and were making payments to him (owner of record David Thomas Nixon, lives in Dallas.) They did not even have an official contract for deed drawn up.

I really felt that I tried to help them, but this is my business. I buy and sell houses. I made the deed of trust for a year, becasue as a dealer, I have to pay income tax for the sale, although I have not received enough $ to cover it.

Guess it’s a lesson learned. Don’t get your emothions envoled in the housing business.

Hello from an expatriated Texan, bighat.
I agree, their problems aren’t yours. I’d also say you went aboveboard to try and help them, I commend you. We’re all in this business as a business and sometimes have to make the tough decisions. You hit the nail on the head about emotions, I wish more folks understood that.
My heart aches for the folks getting screwed though…I hope the lousy SOB investor rots in HELL. Dangit, getting mad again…Whereabouts are you?

I live in the Rebublic of East Texas - You know “frog country” - Harrison County, home of caddo lake - last county east on I-20.

I’m in Longview. We buy lots of junker properties. I tried the rehab route, but no longer rehab junkers - just sweep and sell.

The nicer home are well worth a rehab.

I’m trying to think of a good website name, I actually registed, but my 12 year old son said no way to that. Also registered
Think I’ll go with the latter. We sell to many hispanic folk.
My wife is from Mexico, so we speak spanish. They have bought everthing south of I-10, now they are coming for I-20. I heard they want to buy Texas back! Indeed, they are my strongest market for the junker properties.

I’m still a newbie, been doing this full time for three years.

First house that I bought from foreclosure sale was the wrong house. Lady said, sonny - Texas Eastman paid off this house when my husband died, maybe you bought the house across the street - (it was burnt, nothing but the brick stanting) oh SH*!!

Turned out the house was about 3 blocks away. I had the right plat, but wrong phase.

Live and learn

Dave - where are you?

I make my home in far northwest Texas in Albuquerque, NM by way of the western slope of the Rockies in Colorado. Originally from Ft Worth and used to travel with my dad to Longview and the oil patch as a young boy. I still remember the smell of the marsh gas and the beauty of the Kilgore Rangerettes. The last speeding ticket I got 20 years ago was in your county by a Copenhagen-dipping, illiterate deputy sheriff. Sure is some good fishin’ out that way, though and pretty country to boot. Just can’t stand the bugs, heat and humidity there anymore, so I elevated myself to 8,000 feet. Couldn’t stand the snow and bone-numbing chill of the western slope in Colorado and came south to New Mexico. As Goldilocks would say, just right.
I believe you did the right thing in returning the check, it would have shown an intent to work out a forbearance and might have hindered your efforts at foreclosure. I hope you’ll point these folks towards the AG for assistance in going after Mr. David Thomas Nixon and taking the scumbag for everything he’s got. I know I’ll be looking for him next time I get to DFW.
Good visiting with you, bighat.

Hey bighat…you’re in my neck of the woods. I’m just over the border in Louisiana but have to make the drive to Longview for business quite often!


Keith - Just down the street huh? I try to stay away from the gambling boats, but every now and then I go over there and leave a donation in the Red River.

Dave - my father lives in Kilgore. It’s not a boom town anymore, although the Rangerettes are still gorgeous.
Indeed, many folks will leave here with the impression that it’s redneck country. Actually, I can attest to that.

It’s like everything is in slow motion. I returned to the area three years ago, prior to that I was in the Bay Area of Cali for five years. Good place to make some money, but way too many people for me. I guess I missed the frog country a bit. That plus, I figued I could trade my $400,000 1000 sq ft shack for an investing business.

Keith, how does the tax foreclosures work over in your state? I have a friend that owns a business in Shreveport, he recently bought a tax forclosed property - said it took a long time. What about the trustee sales?

The local HomeVestor franchise owner told me he thinks there is a real estate goldmine over there. ??

The trustee and tax sales here n Gregg County are very congested and people get caught up in the bidding frenzy quite oftem. I often leave thinking it would be easier and cheaper if they just opened the classifieds or found a realtor. Is there something I don’t know about?

I don’t do any foreclosure stuff, per se…I did buy a HUD repo. On tax foreclosures, the owners have 3 years to redeem – no thanx, not interested in holding your property for 3 years, fixing it up, and having your reclaim for the tax amount plus intersest.

I don’t know about “real estate goldmine” but there are a lot of bargains that “clean up real good” and rent out fast.

Keep coming to the boats, we need the revenue!


Question about terms. Can someone explain “on a wrap” and how these people purchased a home in foreclosure without satisfying any of the loan? I am assuming these people who bought “on a wrap” did no title search whatsoever. (Just want to protect myself in the future)Thanks

Jeff -

This was a young couple in their 20’s that bought the house from the scumbag seller who had bought the house from the VA. He borrowed money from Bank of America, which is a mortgage. I think he rented it out to some lower level type folks because it was a junky older property. These tenants really ramshacked the place. I’m sure he decided that it was not a very good rental and decided to sell it using owner financing. People who think they are buying a home usually take much better care of it. (I learned this after I bought the place)

Anyway, the “wrap” is that he already had it financed for $50,000, but sold it for $60,000 with perhaps a $3000 down payment.

The young couple did not assume his mortgage, they just paid him and he was suppose to pay the bank. He probably used the money to smoke crack, so did not pay the bank.

The loan is now in default, full balance due. He did not pay, so the bank accelerates the note and announces it to be sold at a trustee sale to the highest cash bidder.

I go look at the place, and think wow, nice little house - I’ll pay $50,000 for it, cause since the rehab it’s now worth $70,000. Mind you I never talk to anyone, no door knocking to try to see inside or buy it pre sale. All I know is: I might get a good buy.

So, first Tuesday comes around and nobody else looked at it ( it’s in the same county as the sale, but a different town.) so I was the only bidder. Trustee said sold. The trustees around here will not give you but about 10 minutes to produce the cash, which I did.

So, now I’m the new owner. I wait for the deed to arrive about two weeks later. Deed in hand, I go to the property to inform the owners to get out.

Here is where I learn about the wrap around mortgage. Their position was wiped out because the foreclosure of the first lien wipes out the lower position. Actually, I don’t think they even had a contract for deed.

That’s a wraparound, to create financing around an existing mortgage.

Always research the title before you buy! I recently got a call from a lady wanting to sell her junker property. I went and looked, offered he $5000, she said, well Itake it if it’s cash. ALright I said, but let me run title first.

Turns out it was not her house! She did swear that her friend said she could have it, but they never filed a deed.
I passed on the deal. Be careful out there.

Thanks for the info. Will watch out for that.