84R6857 NC-F
 
  By: Oliveira H.B. No. 2069
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the administration of foreclosure sales of real
  property.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 1802.001, Occupations Code, is amended
  by adding Subdivision (9-a) to read as follows:
               (9-a) "Mortgage servicer," "mortgagee," "security
  instrument," "substitute trustee," and "trustee" have the meanings
  assigned by Section 51.0001, Property Code.
         SECTION 2.  Section 1802.002(a), Occupations Code, is
  amended to read as follows:
         (a)  This chapter does not apply to:
               (1)  a sale conducted by order of a United States court
  under Title 11, United States Code;
               (2)  a sale conducted by an employee of the United
  States, this state, or a political subdivision of this state in the
  course and scope of employment;
               (3)  a sale conducted by a charitable, religious, or
  civic organization, including an organization having a tax exempt
  status under Section 501(c), Internal Revenue Code of 1986, or
  organized as a nonprofit entity, if the person organizing,
  arranging, or conducting the auction receives no compensation;
               (4)  a sale conducted by any person of the person's
  property if the person is not engaged in the business of selling
  property at auction on a recurring basis;
               (5)  a foreclosure sale of real property personally
  conducted by a trustee or substitute trustee under a security
  instrument, if the trustee or substitute trustee:
                     (A)  is an attorney or an employee of the
  mortgagee or the mortgage servicer;
                     (B)  has entered into a written agreement with an
  attorney to administer and perform the functions of the trustee or
  substitute trustee under the security instrument and Chapter 51,
  Property Code, other than the advertising and conducting of the
  auction; or
                     (C)  is employed by an auction company to conduct
  the auction, if the auction company has entered into a written
  agreement with an attorney to administer and perform the functions
  of the trustee or substitute trustee under the security instrument
  and Chapter 51, Property Code, other than the advertising and
  conducting of the auction [under a deed of trust];
               (6)  a foreclosure sale of personal property personally
  conducted by:
                     (A)  a person who holds a security interest in the
  property, including a mortgage; or
                     (B)  an employee or agent of a person described by
  Paragraph (A) acting in the course and scope of employment, if:
                           (i)  the employee or agent is not otherwise
  engaged in the auction business; and
                           (ii)  all property for sale in the auction is
  subject to a security agreement;
               (7)  a sale conducted by sealed bid without the option
  of increasing or decreasing the amount of a bid;
               (8)  an auction conducted only for student training
  purposes as part of a course of study approved by the department;
               (9)  an auction conducted by a posted stockyard or
  market agency as defined by the federal Packers and Stockyards Act
  (7 U.S.C. Section 181 et seq.), as amended;
               (10)  an auction of livestock conducted by a nonprofit
  livestock trade association chartered in this state, if the auction
  involves only the sale of livestock owned by members of the trade
  association;
               (11)  an auction conducted by a charitable or nonprofit
  organization chartered in this state, if the auction:
                     (A)  is part of a fair that is organized under
  state, county, or municipal authority; and
                     (B)  involves only the sale of property owned by
  the organization's members; or
               (12)  a sale or auction conducted outside of this
  state.
         SECTION 3.  Subtitle B, Title 5, Property Code, is amended by
  adding Chapter 51A to read as follows:
  CHAPTER 51A. FORECLOSURE SALES OF RESIDENTIAL REAL PROPERTY
         Sec. 51A.001.  DEFINITIONS. In this chapter: 
               (1)  "Auction company" has the meaning assigned by
  Section 1802.001, Occupations Code.
               (2)  "Mortgage servicer," "mortgagee," "security
  instrument," "substitute trustee," and "trustee" have the meanings
  assigned by Section 51.0001.
               (3)  "Proceeds of sale" means the sale price for a
  property received at a foreclosure sale conducted by a trustee or
  substitute trustee.
               (4)  "Residential real property" means: 
                     (A)  a single-family house; 
                     (B)  a duplex, triplex, or quadraplex; or 
                     (C)  a unit in a multi-unit residential structure
  in which title to an individual unit is transferred to the owner of
  the unit under a condominium or cooperative system.
         Sec. 51A.002.  APPLICABILITY. This chapter applies only to
  a foreclosure sale of residential real property conducted under a
  security instrument and Section 51.002.
         Sec. 51A.003.  ADMINISTRATION OF FORECLOSURE SALES.  (a)  A
  foreclosure sale must be conducted by an individual who is a trustee
  or substitute trustee authorized or appointed to exercise the power
  of sale under a security instrument.
         (b)  Except as provided by Subsection (c), a trustee or
  substitute trustee may enter into a written agreement with:
               (1)  an attorney to administer or perform any of the
  trustee's or substitute trustee's functions or responsibilities
  under a security instrument; or
               (2)  an auction company to arrange, manage, sponsor, or
  advertise a foreclosure sale.
         (c)  A trustee or substitute trustee may not delegate the
  performance of the public sale at auction of the property to any
  person who is not a trustee or substitute trustee authorized or
  appointed to exercise the power of sale under the security
  instrument.
         Sec. 51A.004.  NOTICE OF SALE. The preparation and mailing
  of a notice of sale required by Section 51.002 does not constitute
  the practice of law.
         Sec. 51A.005.  INFORMATION FROM BIDDERS. (a) A trustee or
  substitute trustee or an attorney or auction company that is
  administering or managing a foreclosure sale at public auction may
  request that bidders:
               (1)  register for the sale; or
               (2)  provide or display to the trustee, substitute
  trustee, attorney, or auction company the following information:
                     (A)  the name, address, telephone number, and
  e-mail address of each individual tendering or who will tender the
  sale price for a winning bid;
                     (B)  if the bidder is acting on behalf of another
  individual or organization, the name, address, telephone number,
  and e-mail address of the individual or organization and the name of
  a contact person for the organization;
                     (C)  the name and address of any person to be
  identified as the grantee in a trustee's or substitute trustee's
  deed;
                     (D)  for a winning bid, the purchaser's tax
  identification number;
                     (E)  a government-issued photo identification to
  confirm the identity of each individual tendering funds for a
  winning bid; and
                     (F)  any other information reasonably needed to
  complete the trustee's or substitute trustee's duties and functions
  concerning the sale.
         (b)  A trustee, substitute trustee, attorney, or auction
  company that requests a bidder to provide or display information
  described by Subsection (a) before the sale may not refuse to allow
  the bidder to bid if the bidder does not provide or display the
  information before the sale.
         (c)  A trustee or substitute trustee may require a winning
  bidder at a foreclosure sale to provide or display the information
  described by Subsection (a) at the time the trustee or substitute
  trustee completes the sale. If a bidder fails or refuses to provide
  the information, the trustee or substitute trustee may:
               (1)  decline to complete the transaction;
               (2)  hold another auction; and 
               (3)  sell the property to another bidder.
         (d)  Personal information obtained from a bidder in
  connection with a foreclosure sale may not be sold or transferred by
  a trustee, substitute trustee, attorney, or auction company without
  the written informed consent of the bidder. The consent may not be
  a condition of sale. 
         Sec. 51A.006.  PURCHASER'S RECEIPT AND DEED. (a)  After the
  foreclosure sale, the trustee or substitute trustee shall:
               (1)  provide the winning bidder with:
                     (A)  a purchaser's receipt for the proceeds of
  sale; and
                     (B)  a written copy of the conditions of sale
  announced before bidding was opened for the first sale of the day
  held by the trustee or substitute trustee; and
               (2)  except as provided by Subsection (b), within a
  reasonable time:
                     (A)  deliver the deed to the winning bidder; or
                     (B)  file the deed for recording.
         (b)  If the foreclosure sale is disputed, the trustee or
  substitute trustee may withhold the delivery or recording of the
  deed while an action challenging the sale is pending in court.
         Sec. 51A.007.  PROCEEDS OF SALE.  (a)  Proceeds of sale
  received in the form of checks or currency must be maintained in a
  separate account until distributed to persons entitled to the
  proceeds.
         (b)  The trustee or substitute trustee shall make reasonable
  attempts to identify and locate the persons entitled to all or any
  part of the proceeds of sale. 
         (c)  A trustee or substitute trustee, or an attorney or
  auction company acting under Section 51A.003, may make payments
  from the proceeds of sale at any time.
         (d)  A person who accepts proceeds of sale tendered and
  distributed by a trustee or substitute trustee takes the funds in
  full satisfaction of claims for the proceeds of sale. 
         Sec. 51A.008.  EXPENSES PAID FROM PROCEEDS OF SALE.  (a)  A
  trustee or substitute trustee may be paid the trustee's or
  substitute trustee's expenses for the sale from the proceeds of
  sale, including:
               (1)  a trustee's or substitute trustee's fee of not more
  than 2.5 percent of the proceeds of sale or the amount specified in
  the security instrument;
               (2)  the actual costs of title evidence and records
  searches incurred to identify parties legally entitled to the
  proceeds of sale; and
               (3)  reasonable attorney's fees and costs incurred to
  identify persons legally entitled to the proceeds of sale.
         (b)  A fee is:
               (1)  considered earned at the time of sale; and
               (2)  conclusively presumed to be reasonable if the fee:
                     (A)  is not more than 2.5 percent of the proceeds
  of sale, for a trustee's or substitute trustee's fee; or
                     (B)  is not more than 1.5 percent of the proceeds
  of sale, for an attorney's fee under Subsection (a)(3).
         (c)  A trustee or substitute trustee or an attorney who
  prevails in a suit concerning a foreclosure sale of residential
  real property conducted by the trustee or substitute trustee is
  entitled to recover reasonable attorney's fees necessary to defend
  the action, which may be paid from the excess proceeds of sale, if
  any.
         SECTION 4.  (a) Section 1802.002, Occupations Code, as
  amended by this Act, applies only to a foreclosure sale conducted on
  or after the effective date of this Act. A foreclosure sale
  conducted before the effective date of this Act is governed by the
  law applicable to the foreclosure sale immediately before the
  effective date of this Act, and that law is continued in effect for
  that purpose.
         (b)  Chapter 51A, Property Code, as added by this Act,
  applies only to a foreclosure sale for which the notice of sale is
  given under Section 51.002, Property Code, on or after the
  effective date of this Act.
         SECTION 5.  This Act takes effect September 1, 2015.