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A BILL TO BE ENTITLED
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AN ACT
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relating to enforcement of a lien against certain decedents' |
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interests in real property. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subtitle C, Title 2, Estates Code, as effective |
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January 1, 2014, is amended by adding Chapter 125 to read as |
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follows: |
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CHAPTER 125. ENFORCEMENT OF LIEN AGAINST CERTAIN DECEDENTS' |
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INTERESTS IN REAL PROPERTY |
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SUBCHAPTER A. GENERAL PROVISIONS |
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Sec. 125.001. DEFINITIONS. In this chapter, "mortgage |
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servicer," "mortgagee," "mortgagor," and "security instrument" |
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have the meanings assigned by Section 51.0001, Property Code. |
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Sec. 125.002. APPLICABILITY OF CHAPTER; CONFLICT WITH OTHER |
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LAW. (a) This chapter applies only to foreclosure of a lien on real |
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property of a decedent's estate if the decedent is the mortgagor of |
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the security instrument creating the lien. |
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(b) To the extent of a conflict between this chapter and |
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another provision of this subtitle, Rule 736, Texas Rules of Civil |
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Procedure, or Chapter 51, Property Code, this chapter controls. |
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(c) Notwithstanding Section 22.004, Government Code, the |
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supreme court may not amend or adopt a rule in conflict with this |
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chapter. |
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SUBCHAPTER B. PROCEDURES PRIOR TO FORECLOSURE OF LIEN |
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Sec. 125.051. PROCEDURE IF NO WILL OR LETTERS TESTAMENTARY |
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OR OF ADMINISTRATION. (a) If a debt that is secured by a decedent's |
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interest in real property under a security instrument is in default |
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and the personal representative of the decedent's estate has not |
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received valid letters testamentary or of administration, the |
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mortgagee or mortgage servicer may proceed with foreclosure of the |
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lien on the property in accordance with this section. |
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(b) Foreclosure may not be initiated under this section |
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earlier than the 180th day after the earlier of the date of the |
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decedent's death or the date an independent administration of the |
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estate is filed and may be initiated only if the mortgagee agrees in |
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writing that the mortgagee has only a preferred debt and lien claim |
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against the decedent's interest in the real property. |
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(c) If a will has not been filed in the probate court in the |
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county in which the real property is located, the mortgagee or |
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mortgage servicer, concurrently with obtaining a judgment |
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declaring heirship under Chapter 202 from a probate court in the |
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county where the real property is located, must: |
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(1) obtain a court order under Rule 736, Texas Rules of |
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Civil Procedure, allowing the mortgagee or mortgage servicer to |
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proceed with foreclosure of the lien under Chapter 51, Property |
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Code, and the terms of the security instrument; and |
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(2) give notice in accordance with Subchapter C. |
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(d) After a foreclosure sale following the procedure in |
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Subsection (c), the foreclosure deed divests all persons receiving |
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notice under Subchapter C of their right, title, and interest in the |
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decedent's interest in the real property. |
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(e) If a will has been filed in the probate court in the |
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county in which the decedent's real property is located but no |
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letters testamentary have been issued to a personal representative |
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of the decedent's estate, the mortgagee or mortgage servicer must: |
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(1) obtain a court order under Rule 736, Texas Rules of |
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Civil Procedure, allowing the mortgagee or mortgage servicer to |
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proceed with foreclosure of the lien under Chapter 51, Property |
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Code, and the terms of the security instrument; and |
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(2) give notice in accordance with Subchapter C. |
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(f) After a foreclosure sale following the procedure in |
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Subsection (e), the foreclosure deed divests all persons receiving |
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notice under Subchapter C of their right, title, and interest in the |
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decedent's interest in the real property. |
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Sec. 125.052. PROCEDURE IF LETTERS TESTAMENTARY OR OF |
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ADMINISTRATION ISSUED. (a) If a debt that is secured by a |
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decedent's interest in real property under a security instrument is |
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in default and the personal representative of the decedent's estate |
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has received valid letters testamentary or of administration, the |
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mortgagee or mortgage servicer may proceed with foreclosure of the |
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lien on the property in accordance with this section. |
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(b) Not earlier than the 180th day after the date the |
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personal representative of the decedent's estate receives valid |
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letters testamentary or of administration, the mortgagee or |
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mortgage servicer may proceed with foreclosure of the lien under |
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Chapter 51, Property Code, and the terms of the security instrument |
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if the mortgagee or mortgage servicer gives notice to the personal |
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representative. |
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Sec. 125.053. PROCEDURE IF WILL PROBATED AS MUNIMENT OF |
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TITLE. If a debt that is secured by a decedent's interest in real |
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property under a security instrument is in default and the |
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decedent's will has been admitted to probate as a muniment of title |
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in accordance with Chapter 257, the mortgagee or mortgage servicer |
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may proceed with foreclosure of the lien under Chapter 51, Property |
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Code, and the terms of the security instrument if the mortgagee or |
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mortgage servicer gives notice to the devisees who acquired the |
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decedent's interest in the real property under the terms of the |
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will. |
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SUBCHAPTER C. NOTICE AND OTHER REQUIREMENTS |
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Sec. 125.101. NOTICE. (a) For purposes of Section |
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51.002(b), Property Code, a mortgagee or mortgage servicer |
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foreclosing a lien under this chapter must send notice of sale to: |
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(1) each surviving obligor of the debt secured by the |
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real property or surviving mortgagor of the security instrument |
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encumbering the real property to the street address of the property |
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sought to be foreclosed; |
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(2) the decedent, with the notation "Decedent," to the |
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street address of the property sought to be foreclosed; |
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(3) for foreclosure initiated under Section |
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125.051(c), each heir of the decedent named in the judgment |
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obtained under Section 202.201, at the heir's last known address; |
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(4) for foreclosure initiated under Section |
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125.051(e), the persons the probate court determines acquire the |
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decedent's interest in the property under the terms of the |
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decedent's will, at the persons' last known addresses; |
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(5) the "Occupant" at the street address of the |
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property sought to be foreclosed; and |
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(6) if an heir is a minor child or otherwise under a |
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legal disability, the person who is the parent, natural guardian, |
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next friend, or person with a power of attorney for the heir or if a |
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guardianship has been opened for the heir, the name and last known |
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address of the guardian of the heir's estate. |
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(b) In addition to mailing the notice by certified mail as |
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required by Section 51.002(b), Property Code, the mortgagee or |
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mortgage servicer shall mail the notice by regular mail to the |
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person's last known address or to the person's probate attorney of |
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record, if known. |
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(c) If the name, last known address, or whereabouts of the |
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surviving spouse or an heir of a decedent or other person is |
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unknown, the mortgagee or mortgage servicer by affidavit shall |
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describe to the court the due diligence exercised by the person to |
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find or locate the whereabouts of the spouse or heir for purposes of |
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providing notice under this section and the court shall determine |
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whether citation by publication is necessary. |
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Sec. 125.102. CONTENTS OF APPLICATION FOR RULE 736 ORDER; |
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SERVICE OF CITATION. (a) If a court order under Rule 736, Texas |
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Rules of Civil Procedure, is required under this chapter, the |
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application for the order must: |
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(1) substantially comply with the requirements of Rule |
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736.1; and |
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(2) contain an estimate of the "fair market value" of |
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the property prepared not earlier than the 120th day before the date |
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the application is filed and supported by documentation from two of |
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the following: |
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(A) a current appraisal; |
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(B) a broker's price opinion (BPO); |
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(C) a valuation from an official taxing |
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authority; or |
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(D) an automated valuation model appraisal |
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(AVM). |
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(b) A respondent in a proceeding under Rule 736, Texas Rules |
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of Civil Procedure, and this chapter must be served with citation in |
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accordance with Section 5, Part II, Texas Rules of Civil Procedure. |
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Sec. 125.103. CONTENTS OF ORDER. An order allowing the |
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mortgagee or mortgage servicer to proceed with the foreclosure of a |
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lien under this chapter must: |
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(1) describe the material facts establishing the basis |
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for foreclosure; |
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(2) describe the real property to be foreclosed by the |
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property's commonly known mailing address and legal description; |
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(3) contain the name and last known address of each |
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person who is to receive the notice under this subchapter; and |
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(4) contain the recording or indexing information of |
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the security instrument to be foreclosed. |
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SECTION 2. Chapter 125, Estates Code, as added by this Act, |
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applies only to the estate of a decedent who dies on or after the |
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effective date of this Act. The estate of a decedent who dies |
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before the effective date of this Act is governed by the law in |
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effect on the date of the decedent's death, and the former law is |
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continued in effect for that purpose. |
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SECTION 3. This Act takes effect January 1, 2014. |