Texas Foreclosure Law

In Texas it is illegal to ever have a deficiency judgement filed against you if you follow the letter of the law.
Example:
Jim has a house with a market value of 100,000.
he owes 85,000.00 House is sold a foreclosure sale for 70,000. Per Texas law the bank cannot sue for a deficency as the house was sold under market value.
Example two:
Jim house has a market value of 100,000
he owes 105,000. Forslosure sale of 70,000 Bank can sue for 5,000 amount over market value
Here is the staute read for yourself
Added by Acts 2003, 78th Leg., ch. 554, § 1, eff. Jan. 1, 2004.


§ 51.003. DEFICIENCY[0] JUDGMENT. (a) If the price at
which real property is sold at a foreclosure sale under Section
51.002 is less than the unpaid balance of the indebtedness secured
by the real property, resulting in a deficiency[0], any action brought
to recover the deficiency[0] must be brought within two years of the
foreclosure sale and is governed by this section.
(b) Any person against whom such a recovery is sought by
motion may request that the court in which the action is pending
determine the fair market value of the real property as of the date
of the foreclosure sale. The fair market value shall be determined
by the finder of fact after the introduction by the parties of
competent evidence of the value. Competent evidence of value may
include, but is not limited to, the following: (1) expert opinion
testimony; (2) comparable sales; (3) anticipated marketing time
and holding costs; (4) cost of sale; and (5) the necessity and
amount of any discount to be applied to the future sales price or
the cashflow generated by the property to arrive at a current fair
market value.
(c) If the court determines that the fair market value is
greater than the sale price of the real property at the foreclosure
sale, the persons against whom recovery of the deficiency[0] is sought
are entitled to an offset against the deficiency[0] in the amount by
which the fair market value, less the amount of any claim,
indebtedness, or obligation of any kind that is secured by a lien or
encumbrance on the real property that was not extinguished by the
foreclosure, exceeds the sale price. If no party requests the
determination of fair market value or if such a request is made and
no competent evidence of fair market value is introduced, the sale
price at the foreclosure sale shall be used to compute the
deficiency[0].
(d) Any money received by a lender from a private mortgage
guaranty insurer shall be credited to the account of the borrower
prior to the lender bringing an action at law for any deficiency[0]
owed by the borrower. Notwithstanding the foregoing, the credit
required by this subsection shall not apply to the exercise by a
private mortgage guaranty insurer of its subrogation rights against
a borrower or other person liable for any deficiency[0].