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.
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