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.