Is it legal for the lender to sell your 5-year past due loan to a collection agency and then the agency repossess your car in Texas?

YES, your loan was in default. NOW. the lender will likely get a judgment against you if the car doesnt sell for enough to pay the balance on the loan. Dont forget the interest for the last 5 yrs.

Hey, you did good. A free ride for five years before you got caught! Say a grand for those last three payments, about $450 for 5 years interest, a couple hundred for repo costs, and three late charges (don't let them charge a late fee for every month you were late - they can only charge one for each payment missed). So you rode for less than $35 a month.