| 1 | 1 | | 81R23451 KFF-F |
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| 2 | 2 | | By: Thibaut H.B. No. 3083 |
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| 3 | 3 | | Substitute the following for H.B. No. 3083: |
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| 4 | 4 | | By: Elkins C.S.H.B. No. 3083 |
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| 5 | 5 | | |
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| 6 | 6 | | |
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| 7 | 7 | | A BILL TO BE ENTITLED |
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| 8 | 8 | | AN ACT |
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| 9 | 9 | | relating to notice of dragnet clauses in deeds of trust. |
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| 10 | 10 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 11 | 11 | | SECTION 1. Title 8, Business & Commerce Code, is amended by |
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| 12 | 12 | | adding Chapter 262 to read as follows: |
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| 13 | 13 | | CHAPTER 262. DEEDS OF TRUST |
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| 14 | 14 | | Sec. 262.001. NOTICE TO CERTAIN GUARANTORS AND SURETIES. |
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| 15 | 15 | | (a) Before a person agrees to become obligated as a surety or |
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| 16 | 16 | | guarantor on a loan secured by a deed of trust, the mortgagee must |
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| 17 | 17 | | provide the person with the following written notice: |
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| 18 | 18 | | "NOTICE TO SURETY OR GUARANTOR: You are being asked to become |
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| 19 | 19 | | obligated as a surety or guarantor on a loan secured by a deed of |
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| 20 | 20 | | trust. Please read the documents carefully and review with your own |
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| 21 | 21 | | attorney. Please note that if the deed of trust contains a 'dragnet |
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| 22 | 22 | | clause,' which provides that the deed of trust secures other |
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| 23 | 23 | | indebtedness, then the deed of trust may not be released in the |
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| 24 | 24 | | event you are called on to honor your obligation as a surety or |
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| 25 | 25 | | guarantor. |
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| 26 | 26 | | I have read and understand the above notice. |
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| 27 | 27 | | ________________________________ |
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| 28 | 28 | | Date |
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| 29 | 29 | | ________________________________ |
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| 30 | 30 | | Signature of Surety or Guarantor" |
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| 31 | 31 | | (b) The notice required under this section must be provided |
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| 32 | 32 | | on a form separate from the guaranty or surety agreement and signed |
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| 33 | 33 | | and dated by the surety or guarantor. |
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| 34 | 34 | | (c) If a mortgagee does not provide the notice required by |
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| 35 | 35 | | this section, the person entitled to the notice is not liable for |
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| 36 | 36 | | obligations on the loan if any dragnet clause included in the deed |
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| 37 | 37 | | of trust would prevent the surety or guarantor from being |
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| 38 | 38 | | subrogated to the mortgagee's or other holder's security interest |
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| 39 | 39 | | in the property subject to the deed of trust. |
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| 40 | 40 | | SECTION 2. Chapter 262, Business & Commerce Code, as added |
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| 41 | 41 | | by this Act, applies only to an agreement to become obligated as a |
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| 42 | 42 | | surety or guarantor on a loan secured by a deed of trust that is |
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| 43 | 43 | | entered into on or after January 1, 2010. An agreement to become |
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| 44 | 44 | | obligated as a surety or guarantor on a loan secured by a deed of |
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| 45 | 45 | | trust that is entered into before January 1, 2010, is governed by |
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| 46 | 46 | | the law in effect when the agreement was entered into, and that law |
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| 47 | 47 | | is continued in effect for that purpose. |
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| 48 | 48 | | SECTION 3. This Act takes effect September 1, 2009. |
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