By:  Harris                                           S.B. No. 1742
                                A BILL TO BE ENTITLED
                                       AN ACT
 1-1     relating to certain proceedings in a foreclosure action.
 1-2           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-3           SECTION 1.  Chapter 51, Property Code, is amended by adding
 1-4     Section 51.007 to read as follows:
 1-5           Sec. 51.007.  TRUSTEE UNDER DEED OF TRUST, CONTRACT LIEN OR
 1-6     SECURITY INSTRUMENT.  (a)  The trustee named in a suit or
 1-7     proceeding may plead in the answer that the trustee is not a
 1-8     necessary party by a verified denial stating the basis for the
 1-9     trustee's reasonable belief that the trustee was named as a party
1-10     solely in the capacity as a trustee under a deed of trust, contract
1-11     lien, or security instrument.
1-12           (b)  Within 30 days after the filing of the trustee's
1-13     verified denial, a verified response is due from all parties to the
1-14     suit or proceeding setting forth all matters, whether in law or
1-15     fact, that rebut the trustee's verified denial.
1-16           (c)  If a party has no objection or fails to file a timely
1-17     verified response to the trustee's verified denial, the trustee
1-18     shall be dismissed from the suit or proceeding without prejudice.
1-19           (d)  If a respondent files a timely verified response to the
1-20     trustee's verified denial, the matter shall be set for hearing.
1-21     The court shall dismiss the trustee from the suit or proceeding
1-22     without prejudice if the court determines that the trustee is not a
1-23     necessary party.
1-24           (e)  A dismissal of the trustee pursuant to Subsections (c)
 2-1     and (d) shall not prejudice a party's right to seek injunctive
 2-2     relief to prevent the trustee from proceeding with a foreclosure
 2-3     sale.
 2-4           (f)  A trustee shall not be liable for any good faith error
 2-5     resulting from reliance on any information in law or fact provided
 2-6     by the mortgagor or mortgagee or their respective attorney, agent,
 2-7     or representative or other third party.
 2-8           SECTION 2.  (a)  This Act takes effect September 1, 1999.
 2-9           (b)  The changes in law made by this Act apply only to
2-10     foreclosure actions instituted on or after the effective date of
2-11     this Act.
2-12           SECTION 3.  The importance of this legislation and the
2-13     crowded condition of the calendars in both houses create an
2-14     emergency and an imperative public necessity that the
2-15     constitutional rule requiring bills to be read on three several
2-16     days in each house be suspended, and this rule is hereby suspended.