Texas 2013 - 83rd Regular

Texas House Bill HB2795 Compare Versions

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1	1	By: Raymond (Senate Sponsor - West) H.B. No. 2795
2	2	(In the Senate - Received from the House May 9, 2013;
3	3	May 9, 2013, read first time and referred to Committee on
4	4	Jurisprudence; May 17, 2013, reported adversely, with favorable
5	5	Committee Substitute by the following vote: Yeas 7, Nays 0;
6	6	May 17, 2013, sent to printer.)
7	7	COMMITTEE SUBSTITUTE FOR H.B. No. 2795 By: Paxton
8	8
9	9
10	10	A BILL TO BE ENTITLED
11	11	AN ACT
12	12	relating to enforcement of a lien against certain decedents'
13	13	interests in real property.
14	14	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
15	15	SECTION 1. Subtitle C, Title 2, Estates Code, as effective
16	16	January 1, 2014, is amended by adding Chapter 125 to read as
17	17	follows:
18	18	CHAPTER 125. ENFORCEMENT OF LIEN AGAINST CERTAIN DECEDENTS'
19	19	INTERESTS IN REAL PROPERTY
20	20	SUBCHAPTER A. GENERAL PROVISIONS
21	21	Sec. 125.001. DEFINITIONS. In this chapter, "mortgage
22	22	servicer," "mortgagee," "mortgagor," and "security instrument"
23	23	have the meanings assigned by Section 51.0001, Property Code.
24	24	Sec. 125.002. APPLICABILITY OF CHAPTER; CONFLICT WITH OTHER
25	25	LAW. (a) This chapter applies only to foreclosure of a lien on real
26	26	property in which a decedent had an interest if the decedent was the
27	27	mortgagor of the security instrument creating the lien and an
28	28	obligor of the debt secured by the lien.
29	29	(b) To the extent of a conflict between this chapter and
30	30	another provision of this title, Rule 736, Texas Rules of Civil
31	31	Procedure, or Chapter 51, Property Code, this chapter controls.
32	32	SUBCHAPTER B. FORECLOSURE OF LIEN
33	33	Sec. 125.051. PROCEDURE PRIOR TO FORECLOSURE. (a) If a
34	34	debt that is secured by a decedent's interest in real property under
35	35	a security instrument is in default and no probate proceeding has
36	36	been commenced, the mortgagee or mortgage servicer may proceed with
37	37	foreclosure of the lien on the real property in accordance with this
38	38	section.
39	39	(b) Foreclosure of a lien on real property under this
40	40	section may not be initiated earlier than the 180th day after the
41	41	date of the decedent's death.
42	42	(c) Foreclosure of a lien on real property under this
43	43	section is considered an election by the mortgagee to have the claim
44	44	allowed, approved, and fixed as a preferred debt and lien claim
45	45	against the decedent's interest in the real property securing the
46	46	debt and paid according to the terms of the contract that secured
47	47	the lien. No further claim for the debt may be made by the mortgagee
48	48	against any other assets of the decedent's estate.
49	49	(d) The mortgagee or mortgage servicer, concurrently with
50	50	obtaining a judgment declaring heirship under Chapter 202, must:
51	51	(1) obtain a court order under Rule 736, Texas Rules of
52	52	Civil Procedure, allowing the mortgagee or mortgage servicer to
53	53	proceed with foreclosure of the lien under Chapter 51, Property
54	54	Code, and the terms of the security instrument; and
55	55	(2) give notice in accordance with Subchapter C.
56	56	Sec. 125.052. EFFECT OF FORECLOSURE. A deed given pursuant
57	57	to a foreclosure of a lien on real property in accordance with this
58	58	chapter divests all persons receiving notice under Subchapter C of
59	59	any right or title to or interest in the decedent's interest in the
60	60	real property.
61	61	SUBCHAPTER C. NOTICE AND OTHER REQUIREMENTS
62	62	Sec. 125.101. NOTICE. (a) For purposes of Section
63	63	51.002(b), Property Code, a mortgagee or mortgage servicer
64	64	foreclosing a lien under this chapter must send notice of sale to:
65	65	(1) each surviving obligor of the debt secured by the
66	66	real property or surviving mortgagor of the security instrument
67	67	encumbering the real property, sent to:
68	68	(A) the street address of the property subject to
69	69	the foreclosure; and
70	70	(B) the last known address in the records of the
71	71	mortgagee or mortgage servicer identified by the decedent
72	72	mortgagor, surviving mortgagor, or surviving obligor as an address
73	73	for notice;
74	74	(2) the decedent, with the notation "Decedent," sent
75	75	to the street address of the property subject to the foreclosure;
76	76	(3) the surviving spouse of the mortgagor, if any;
77	77	(4) each heir of the decedent named in the judgment
78	78	obtained under Chapter 202, sent to the heir's last known address;
79	79	(5) the "Occupant," sent to the street address of the
80	80	property subject to the foreclosure; and
81	81	(6) if an heir is a minor child or otherwise under a
82	82	legal disability, the person who is a natural guardian, a guardian,
83	83	or, if known to the mortgagee or mortgage servicer, an agent or
84	84	attorney in fact under a power of attorney signed by the heir, sent
85	85	to the person's last known address.
86	86	(b) The mortgagee or mortgage servicer shall mail a notice
87	87	required under Subsection (a) both by regular mail and by
88	88	registered or certified mail.
89	89	(c) If the name, last known address, or whereabouts of the
90	90	surviving spouse or an heir of a decedent or other person to whom
91	91	notice is required to be given under this section are unknown, the
92	92	mortgagee or mortgage servicer shall describe to the court by
93	93	affidavit the due diligence exercised by the person to find or
94	94	locate the whereabouts of the spouse, heir, or other person for
95	95	purposes of providing notice under this section and the court shall
96	96	determine whether citation by publication is necessary.
97	97	Sec. 125.102. CONTENTS OF APPLICATION FOR RULE 736 ORDER.
98	98	An application pursuant to this chapter for a court order under Rule
99	99	736, Texas Rules of Civil Procedure, must:
100	100	(1) substantially comply with the requirements of Rule
101	101	736.1; and
102	102	(2) contain an estimate of the "fair market value" of
103	103	the property prepared not earlier than the 120th day before the date
104	104	the application is filed and supported by documentation as to fair
105	105	market value.
106	106	Sec. 125.103. CONTENTS OF ORDER. An order allowing the
107	107	mortgagee or mortgage servicer to proceed with the foreclosure of a
108	108	lien under this chapter must:
109	109	(1) describe the material facts establishing the basis
110	110	for foreclosure;
111	111	(2) describe the real property to be foreclosed by the
112	112	property's commonly known mailing address and legal description;
113	113	(3) contain the name and last known address of each
114	114	person who is to receive the notice under this subchapter; and
115	115	(4) contain the recording or indexing information of
116	116	the security instrument to be foreclosed.
117	117	Sec. 125.104. ATTACHMENT OF ORDER TO TRUSTEE'S DEED. A
118	118	conformed copy of the court order obtained under Rule 736, Texas
119	119	Rules of Civil Procedure, pursuant to this chapter must be attached
120	120	to the trustee's or substitute trustee's deed when recorded in the
121	121	real property records.
122	122	SUBCHAPTER D. DISPOSITION OF EXCESS PROCEEDS OF FORECLOSURE SALE
123	123	Sec. 125.151. PAYMENT OF EXCESS PROCEEDS INTO COURT
124	124	REGISTRY. Not later than the 90th day after the date of a
125	125	foreclosure sale conducted pursuant to this chapter, the trustee or
126	126	substitute trustee shall pay into the court registry any proceeds
127	127	of the foreclosure sale remaining after the payment of:
128	128	(1) the costs of the foreclosure;
129	129	(2) any trustee fees or attorney's fees permitted
130	130	under a security instrument evidencing a lien foreclosed under this
131	131	chapter; and
132	132	(3) the debt owed to any lienholder who obtained an
133	133	order under this chapter in the order of priority of those liens.
134	134	Sec. 125.152. WITHDRAWAL FROM COURT REGISTRY. Excess
135	135	proceeds paid into a court registry as required by Section 125.151
136	136	may be withdrawn as follows:
137	137	(1) the personal representative of the decedent's
138	138	estate may withdraw the excess proceeds to be administered as a part
139	139	of the decedent's estate; or
140	140	(2) if no person is serving as personal representative
141	141	of the decedent's estate, the decedent's heirs named in a judgment
142	142	in a proceeding to declare heirship under Chapter 202 may withdraw
143	143	the excess proceeds on the earlier of:
144	144	(A) the expiration of the fourth anniversary of
145	145	the date of the decedent's death; or
146	146	(B) the date of entry of an order of no
147	147	administration under Chapter 451.
148	148	Sec. 125.153. PAYMENT TO COMPTROLLER. If any money paid
149	149	into the court registry under this subchapter remains on deposit
150	150	with the court four years and six months after the date of the
151	151	decedent's death, the court shall order the remaining amount to be
152	152	paid to the comptroller in accordance with Chapter 551.
153	153	SECTION 2. Chapter 125, Estates Code, as added by this Act,
154	154	applies only to the estate of a decedent who dies on or after the
155	155	effective date of this Act. The estate of a decedent who dies
156	156	before the effective date of this Act is governed by the law in
157	157	effect on the date of the decedent's death, and the former law is
158	158	continued in effect for that purpose.
159	159	SECTION 3. This Act takes effect January 1, 2014.
160	160	* * * * *