Q: What are my options if my house in Texas goes to foreclosure or deed in lieu?

A: A deed in lieu of foreclosure appears to be a solid option.

A: Typically, a deed in lieu of foreclosure is preferable because you are in greater control of the outcome. Issues that will need to be addressed are the waiver of any deficiency by the lender, the tax implications of a deed in lieu of foreclosure versus a foreclosure, the date you have to vacate, and the issuance of a moving allowance by the lender. Schedule a free consultation to ensure the best decision about the future of the property is made.

A: If your home in Texas is heading toward foreclosure and the short sale didn’t go through, a deed in lieu could be a good option to avoid the full foreclosure process. It allows you to voluntarily transfer ownership of the property back to the lender, which can sometimes help protect your credit from the harsher impact of a foreclosure. You’ll need to make sure the lender agrees in writing not to pursue a deficiency judgment—otherwise, you might still owe money if the home is worth less than what you owe.

If the home goes into foreclosure, Texas is a non-recourse state in many cases, which means you might not be held personally liable for the remaining loan balance. However, this isn't always guaranteed, and lenders can still try to recover the difference unless the loan was a purchase-money mortgage or if there's a specific agreement releasing you from liability. It's really important to ask the lender directly whether they plan to pursue any deficiency after foreclosure or deed in lieu.

Between foreclosure and deed in lieu, the latter often has a softer impact on your credit and may help you move on more quickly. If you’re leaning toward walking away, just know there could still be financial consequences if you don’t get written confirmation about the debt forgiveness. It's okay to feel overwhelmed, but taking action and communicating with your lender puts you in a better position.