89R10426 RAL-D

By: Johnson S.B. No. 2833

A BILL TO BE ENTITLED

AN ACT

relating to the nonjudicial foreclosure sale of certain residential real property.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Chapter 51, Property Code, is amended by adding Section 51.0012 to read as follows:

Sec. 51.0012. PROVISION TO THIRD PARTY OF NOTICE OF DEFAULT OR NOTICE OF SALE. (a) In this section, "residential real property" has the meaning assigned by Section 51.016.

(b) A lender of a mortgage loan secured by residential real property to be used as the borrower's residence shall provide written notice to the borrower not later than the date the borrower signs the security instrument that a third party designated by the borrower may request to receive copies of any notice of default or notice of sale provided to the borrower under Section 51.002, including:

(1) a family member;

(2) a housing counseling agency approved by the United States Department of Housing and Urban Development; and

(3) an attorney.

SECTION 2. Chapter 51, Property Code, is amended by adding Section 51.017 to read as follows:

Sec. 51.017. NONJUDICIAL FORECLOSURE SALE OF CERTAIN RESIDENTIAL REAL PROPERTY. (a) This section applies only to a nonjudicial foreclosure sale of residential real property conducted under Section 51.002. In this section, "residential real property" has the meaning assigned by Section 51.016.

(b) A mortgage servicer of a debt may not serve a debtor in default under a deed of trust or other contract lien on residential real property used as the debtor's residence with a notice of default under Section 51.002(d) unless the mortgage servicer provides the debtor with written notice by certified mail not later than the 30th day before the date the mortgage servicer serves the notice of default that informs the debtor that a third party designated by the debtor may request to receive copies of any notice of default or notice of sale provided to the debtor under Section 51.002, including:

(1) a family member;

(2) a housing counseling agency approved by the United States Department of Housing and Urban Development; and

(3) an attorney.

(c) At the time a mortgage servicer provides a notice of default or notice of sale to the debtor under this section, the mortgage servicer must provide a copy of the notice of default or notice of sale to any person designated by the debtor in response to a notice provided to the debtor under Subsection (b) or Section 51.0012 who makes a request to receive a copy of the notice of default or notice of sale.

(d) If, after receiving a notice of sale under Section 51.002(b), a debtor provides a trustee or substitute trustee by certified mail a written listing agreement with a license holder under Chapter 1101, Occupations Code, for the sale of the residential real property not later than the fifth business day before the date of sale specified in the notice of sale, the trustee or substitute trustee shall postpone the foreclosure sale until at least the 45th day after the scheduled date of sale. A second notice of sale must be given not later than the 21st day before the new date of sale in the same manner prescribed by Section 51.002(b).

(e) If, after receiving the second notice of sale under Subsection (d) and not later than the fifth business day before the date of sale specified in the notice, a debtor provides a trustee or substitute trustee by certified mail a copy of a signed purchase agreement for the sale of the residential real property with a purchase price amount equal to or greater than the unpaid balance of the indebtedness secured by the property, the trustee or substitute trustee shall postpone the foreclosure sale until at least the 45th day after the date the trustee or substitute trustee receives the purchase agreement. A final notice of sale must be given not later than the 21st day before the new date of sale in the same manner prescribed by Section 51.002(b).

(f) A trustee or substitute trustee may not grant a postponement of a foreclosure sale under Subsection (d) or (e) more than once.

(g) A mortgagee shall provide a valuation of the fair market value of the residential real property to a trustee or substitute trustee not later than 10 days before the initial date of sale specified in a notice of sale provided under Section 51.002(b). The trustee or substitute trustee may rely on the valuation provided by the mortgagee without having to verify the source or accuracy of the valuation. The valuation may not be made more than six months before the date of the initial date of sale. The fair market value may be determined by:

(1) an opinion of a license holder under Chapter 1101, Occupations Code;

(2) an appraisal from a license holder under Chapter 1103, Occupations Code;

(3) a value from a commercially utilized automated valuation model; or

(4) a value from a computerized property valuation system that is used to derive a real property value.

(h) A trustee or substitute trustee conducting a foreclosure sale to which this section applies may not accept a bid of less than 67 percent of the fair market value of the residential real property, based on the valuation provided under Subsection (g). If no party submits a bid in an amount equal to or greater than 67 percent of the fair market value of the residential real property, the trustee or substitute trustee shall postpone the foreclosure sale until not earlier than the seventh day after the date of sale, after which a trustee or substitute trustee shall conduct a second foreclosure sale and may accept a bid of less than 67 percent of the fair market value of the property.

SECTION 3. Section 51.017, Property Code, as added by this Act, applies only to a foreclosure action initiated by the provision of a notice of default or notice of sale under Section 51.002, Property Code, on or after the effective date of this Act.

SECTION 4. This Act takes effect September 1, 2025.