78R11887 PAM-F


By:  Solomons                                                     H.B. No. 1493

Substitute the following for H.B. No. 1493:                                   

By:  Hopson                                                   C.S.H.B. No. 1493



A BILL TO BE ENTITLED

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, 51.0075, 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 holder of the debt and its 
successors and assigns.
		(2)  "Debtor's last known address" means a debtor's 
residence address for a debt secured by the debtor's residence 
unless the debtor provided the current mortgage servicer a written 
change of address on or before the 60th day 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.  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 notices 
required under Section 51.002 that the mortgage servicer is 
representing the mortgagee under a servicing agreement with 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 and at the purchaser's own 
risk; and
		(2)  is not a consumer or a bona fide purchaser for 
value.           
	SECTION 2.  This Act takes effect January 1, 2004.