H.B. No. 1493
AN ACT
relating to the foreclosure of property and the authority of a
mortgage servicer to administer the foreclosure on behalf of a
mortgagee.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 51, Property Code, is amended by adding
Sections 51.0001, 51.0021, 51.0025, 51.0075, and 51.009 to read as
follows:
Sec. 51.0001. DEFINITIONS. In this chapter:
(1) "Book entry system" means a national book entry
system for registering a beneficial interest in a security
instrument that acts as a nominee for the grantee, beneficiary,
owner, or holder of the security instrument and its successors and
assigns.
(2) "Debtor's last known address" means:
(A) for a debt secured by the debtor's residence,
the debtor's residence address unless the debtor provided the
mortgage servicer a written change of address before the date the
mortgage servicer mailed a notice required by Section 51.002; or
(B) for a debt other than a debt described by
Paragraph (A), the debtor's last known address as shown by the
records of the mortgage servicer of the security instrument unless
the debtor provided the current mortgage servicer a written change
of address before the date the mortgage servicer mailed a notice
required by Section 51.002.
(3) "Mortgage servicer" means the last person to whom
a mortgagor has been instructed by the current mortgagee to send
payments for the debt secured by a security instrument. A mortgagee
may be the mortgage servicer.
(4) "Mortgagee" means:
(A) the grantee, beneficiary, owner, or holder of
a security instrument;
(B) a book entry system; or
(C) if the security interest has been assigned of
record, the last person to whom the security interest has been
assigned of record.
(5) "Mortgagor" means the grantor of a security
instrument.
(6) "Security instrument" means a deed of trust,
mortgage, or other contract lien on an interest in real property.
(7) "Substitute trustee" means a person appointed by
the current mortgagee or mortgage servicer under the terms of the
security instrument to exercise the power of sale.
(8) "Trustee" means a person authorized to exercise
the power of sale under the terms of a security instrument.
Sec. 51.0021. NOTICE OF CHANGE OF ADDRESS REQUIRED. A
debtor shall inform the mortgage servicer of the debt in a
reasonable manner of any change of address of the debtor for
purposes of providing notice to the debtor under Section 51.002.
Sec. 51.0025. ADMINISTRATION OF FORECLOSURE BY MORTGAGE
SERVICER. A mortgage servicer may administer the foreclosure of
property under Section 51.002 on behalf of a mortgagee if:
(1) the mortgage servicer and the mortgagee have
entered into an agreement granting the current mortgage servicer
authority to service the mortgage; and
(2) the mortgage servicer discloses in the notice
required under Section 51.002:
(A) that the mortgage servicer is representing
the mortgagee under a servicing agreement with the mortgagee; and
(B) the name and address of the mortgagee.
Sec. 51.0075. AUTHORITY OF TRUSTEE OR SUBSTITUTE TRUSTEE.
(a) A trustee or substitute trustee may set reasonable conditions
for conducting the public sale if the conditions are announced
before bidding is opened for the first sale of the day held by the
trustee or substitute trustee.
(b) A trustee or substitute trustee is not a debt collector.
(c) A mortgagee may appoint or may authorize a mortgage
servicer to appoint a perpetual substitute trustee by power of
attorney or other written instrument. The power of attorney or
written instrument must be signed by the mortgagee's
representative, acknowledged, and sworn to with a jurat.
Sec. 51.009. FORECLOSED PROPERTY SOLD "AS IS." A purchaser
at a sale of real property under Section 51.002:
(1) acquires the foreclosed property "as is" without
any expressed or implied warranties, except as to warranties of
title, and at the purchaser's own risk; and
(2) is not a consumer.
SECTION 2. Sections 51.002(b), (d), and (e), Property Code,
are amended to read as follows:
(b) Notice of the sale, which must include a statement of
the earliest time at which the sale will begin, must be given at
least 21 days before the date of the sale:
(1) by posting at the courthouse door of each county in
which the property is located a written notice designating the
county in which the property will be sold;
(2) by filing in the office of the county clerk of each
county in which the property is located a copy of the notice posted
under Subdivision (1); and
(3) by the mortgage servicer [holder] of the debt to
which the power of sale is related serving written notice of the
sale by certified mail on each debtor who, according to the records
of the mortgage servicer [holder] of the debt, is obligated to pay
the debt.
(d) Notwithstanding any agreement to the contrary, the
mortgage servicer [holder] of the debt shall serve a debtor in
default under a deed of trust or other contract lien on real
property used as the debtor's residence with written notice by
certified mail stating that the debtor is in default under the deed
of trust or other contract lien and giving the debtor at least 20
days to cure the default before notice of sale can be given under
Subsection (b). The entire calendar day on which the notice
required by this subsection is given, regardless of the time of day
at which the notice is given, is included in computing the 20-day
notice period required by this subsection, and the entire calendar
day on which notice of sale is given under Subsection (b) is
excluded in computing the 20-day notice period.
(e) Service of a notice under this section by certified mail
is complete when the notice is deposited in the United States mail,
postage prepaid and addressed to the debtor at the debtor's last
known address [as shown by the records of the holder of the debt].
The affidavit of a person knowledgeable of the facts to the effect
that service was completed is prima facie evidence of service.
SECTION 3. This Act takes effect January 1, 2004.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 1493 was passed by the House on May 2,
2003, by a non-record vote; that the House refused to concur in
Senate amendments to H.B. No. 1493 on May 29, 2003, and requested
the appointment of a conference committee to consider the
differences between the two houses; and that the House adopted the
conference committee report on H.B. No. 1493 on May 31, 2003, by a
non-record vote.
______________________________
Chief Clerk of the House
I certify that H.B. No. 1493 was passed by the Senate, with
amendments, on May 28, 2003, by the following vote: Yeas 31, Nays
0; at the request of the House, the Senate appointed a conference
committee to consider the differences between the two houses; and
that the Senate adopted the conference committee report on H.B. No.
1493 on June 1, 2003, by a viva-voce vote.
______________________________
Secretary of the Senate
APPROVED: __________________
Date
__________________
Governor