Tex. Prop. Code §§ 51.002, 51.007; Tex. Civ. Prac. & Rem. Code §§ 16.003(a), 16.051
Wrongful foreclosure in Texas — the grossly inadequate price requirement
A claim in Texas district and county courts · Last verified August 26, 2026
Texas is a non-judicial foreclosure state. A lender with a deed of trust does not need a court to sell the property — it needs to follow Property Code § 51.002, and the whole process can run in about six weeks.
A wrongful foreclosure claim attacks that sale, and Texas has set the bar high. A defect in the sale is not enough. The courts of appeals uniformly require a grossly inadequate selling price as well, and a causal link between the two.
What the claim is
Your home or property was sold at a foreclosure sale that was not conducted properly, and it sold for far less than it was worth because of that.
Where the right comes from
Common law, layered over the statutory sale procedure in Property Code § 51.002. There is no single canonical element list from the Texas Supreme Court; the formulation below is the one the courts of appeals consistently apply.
What a plaintiff has to prove
- A defect in the foreclosure sale proceedings.
- A grossly inadequate selling price.
- A causal connection between the defect and the grossly inadequate price.
All three. A low price with a clean sale fails. A defective notice followed by a sale at fair value fails too.
The statutory notices — where the defects come from
The 20-day cure letter — § 51.002(d). Before notice of sale can be given on a debt secured by a residence, the mortgage servicer must serve the debtor written notice by certified mail stating that the debtor is in default and giving at least 20 days to cure the default.
The 21-day sale notice — § 51.002(b). Notice of the sale must be given at least 21 days before the sale by three methods: posting at the courthouse door, filing with the county clerk, and serving each debtor obligated to pay the debt by certified mail.
Service is complete when deposited. Section 51.002(e) provides that service by certified mail is complete when the notice is deposited in the mail. Refusing the letter does not stop the clock.
The sale window. Foreclosure sales occur on the first Tuesday of the month (or the first Wednesday where the county so designates), between 10 a.m. and 4 p.m., beginning at the time stated in the notice or within three hours after it.
How long you have to file
Two years for a tort-based wrongful foreclosure claim, under CPRC § 16.003(a), running from the sale.
Four years where the claim is framed on the contract — a breach of the deed of trust — under the residual in CPRC § 16.051.
A claim to set aside the sale in equity is also subject to laches, and delay while a purchaser improves the property is fatal in practice.
What has to happen before you file
Nothing statutory. But if the remedy sought is rescission — setting the sale aside — Texas generally requires the borrower to tender the amount owed, or at least show the ability to do so. A court will not undo the sale and return the property to someone who still cannot pay.
That requirement is why many wrongful foreclosure cases are pleaded for damages instead: the difference between the property's market value and the foreclosure sale price.
What the claim pays
Rescission — setting the sale aside — subject to tender.
Damages measured as the difference between the fair market value of the property at the time of the sale and the price it brought.
Attorney's fees only where a statute or the loan documents provide for them. There is no general fee statute for wrongful foreclosure.
Who can be sued
The noteholder or lender.
The mortgage servicer, which is usually the party that sent the notices.
The trustee named in the deed of trust — though Property Code § 51.007 provides a mechanism for a trustee to be dismissed from the suit on filing a verified denial, unless the plaintiff verifies a claim against the trustee personally.
Common defenses
- No grossly inadequate price. The most common winning defense.
- Notice was properly given, with the certified mail records to prove it.
- No tender, for a claim seeking to set the sale aside.
- Waiver or ratification — the borrower accepted the surplus proceeds, or did nothing for years.
- The borrower was in default, which does not defeat the claim but shapes every part of it.
- Limitations and laches.
What people get wrong
A low price alone does not void a sale. Foreclosure sales routinely bring less than market value. Texas will not undo one without a defect that caused the shortfall.
Refusing certified mail does not defeat notice. Service is complete on deposit in the mail.
The 20-day cure notice and the 21-day sale notice are separate. Both have to happen, in that order, and confusing them is a common pleading error.
Tender matters. A homeowner asking a court to give the house back is asking for equity, and equity asks what they can pay.
Where it came from
Non-judicial foreclosure exists in Texas because the deed of trust does — a security instrument that names a trustee with a power of sale, so that default can be resolved without a lawsuit. The trade for that speed is procedural: the statute fixes the notices, the timing, and the place, and a lender that departs from them exposes the sale.
The grossly-inadequate-price requirement is the courts' own limit on that exposure. Without it, every technical defect in a mailing would unwind a completed sale and cloud the title of every purchaser at a courthouse auction.
Common questions
How long do I have to sue for wrongful foreclosure in Texas?
Two years for a tort claim from the date of the sale, or four years where the claim is based on the deed of trust.
Is a defective notice enough to undo the sale?
Generally no. Texas requires a grossly inadequate selling price and a causal connection between the defect and that price.
How much notice does a lender have to give?
At least 20 days to cure the default, then at least 21 days before the sale.
What if I refused the certified letter?
Service is complete when the notice is deposited in the mail. Refusing delivery does not extend the time.
Do I have to pay off the loan to get the house back?
To set the sale aside in equity, Texas generally requires tender of the amount owed or a showing that you can pay it.
Can I recover attorney's fees?
Only if the loan documents or another statute provide for them.