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