1-1 By: Harris S.B. No. 1742 1-2 (In the Senate - Filed March 12, 1999; March 15, 1999, read 1-3 first time and referred to Committee on Jurisprudence; 1-4 April 28, 1999, reported adversely, with favorable Committee 1-5 Substitute by the following vote: Yeas 4, Nays 0; April 28, 1999, 1-6 sent to printer.) 1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 1742 By: Harris 1-8 A BILL TO BE ENTITLED 1-9 AN ACT 1-10 relating to certain proceedings in a foreclosure action. 1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-12 SECTION 1. Chapter 51, Property Code, is amended by adding 1-13 Section 51.007 to read as follows: 1-14 Sec. 51.007. TRUSTEE UNDER DEED OF TRUST, CONTRACT LIEN OR 1-15 SECURITY INSTRUMENT. (a) The trustee named in a suit or 1-16 proceeding may plead in the answer that the trustee is not a 1-17 necessary party by a verified denial stating the basis for the 1-18 trustee's reasonable belief that the trustee was named as a party 1-19 solely in the capacity as a trustee under a deed of trust, contract 1-20 lien, or security instrument. 1-21 (b) Within 30 days after the filing of the trustee's 1-22 verified denial, a verified response is due from all parties to the 1-23 suit or proceeding setting forth all matters, whether in law or 1-24 fact, that rebut the trustee's verified denial. 1-25 (c) If a party has no objection or fails to file a timely 1-26 verified response to the trustee's verified denial, the trustee 1-27 shall be dismissed from the suit or proceeding without prejudice. 1-28 (d) If a respondent files a timely verified response to the 1-29 trustee's verified denial, the matter shall be set for hearing. 1-30 The court shall dismiss the trustee from the suit or proceeding 1-31 without prejudice if the court determines that the trustee is not a 1-32 necessary party. 1-33 (e) A dismissal of the trustee pursuant to Subsections (c) 1-34 and (d) shall not prejudice a party's right to seek injunctive 1-35 relief to prevent the trustee from proceeding with a foreclosure 1-36 sale. 1-37 (f) A trustee shall not be liable for any good faith error 1-38 resulting from reliance on any information in law or fact provided 1-39 by the mortgagor or mortgagee or their respective attorney, agent, 1-40 or representative or other third party. 1-41 SECTION 2. (a) This Act takes effect September 1, 1999. 1-42 (b) The changes in law made by this Act apply only to 1-43 foreclosure actions instituted on or after the effective date of 1-44 this Act. 1-45 SECTION 3. The importance of this legislation and the 1-46 crowded condition of the calendars in both houses create an 1-47 emergency and an imperative public necessity that the 1-48 constitutional rule requiring bills to be read on three several 1-49 days in each house be suspended, and this rule is hereby suspended. 1-50 * * * * *