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.