By: Oliveira H.B. No. 2066
Substitute the following for H.B. No. 2066:
By: Simmons C.S.H.B. No. 2066
A BILL TO BE ENTITLED
AN ACT
relating to the rescission of nonjudicial foreclosure sales.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 51, Property Code, is amended by adding
Section 51.016 to read as follows:
Sec. 51.016. RESCISSION OF NONJUDICIAL FORECLOSURE SALES.
(a) This section applies only to a nonjudicial foreclosure sale
conducted under Section 51.002.
(b) Not later than the 15th day after the date of a
foreclosure sale, a mortgagee, trustee, or substitute trustee may
rescind the sale under this section if:
(1) the statutory requirements for the sale were not
satisfied;
(2) the default leading to the sale was cured before
the sale;
(3) a receivership or dependent probate
administration involving the property was pending at the time of
sale;
(4) a condition specified in the conditions of sale
prescribed by the trustee or substitute trustee before the sale and
made available in writing to prospective bidders at the sale was not
met;
(5) the mortgagee or mortgage servicer and the debtor
agreed before the sale to cancel the sale based on an enforceable
written agreement by the debtor to cure the default; or
(6) at the time of the sale, a court-ordered or
automatic stay of the sale imposed in a bankruptcy case filed by a
person with an interest in the property was in effect.
(c) If the trustee's or substitute trustee's deed has not
been recorded in the deed records of a county in which all or part of
the property is located, the foreclosure sale may be rescinded
under this section by serving a written notice of rescission that
describes the reason for the rescission to:
(1) the purchaser, if the mortgagee is not the
purchaser; and
(2) each debtor who, according to the records of the
mortgage servicer of the debt, is obligated to pay the debt.
(d) A notice required by Subsection (c) must be served by
certified mail. Service of the notice is complete when the notice
is deposited in the United States mail, postage prepaid and
addressed to the purchaser or debtor, as applicable, at the
purchaser's or debtor's last known address, as applicable. The
affidavit of a person knowledgeable of the facts to the effect that
service was completed is prima facie evidence of service.
(e) If the trustee's or substitute trustee's deed has been
recorded in the deed records of a county in which all or part of the
property is located, the foreclosure sale may be rescinded under
this section by:
(1) serving notices of rescission as prescribed by
Subsections (c) and (d); and
(2) recording a copy of each notice in the deed records
of each county in which the deed was recorded.
(f) Not later than the fifth business day after the date a
foreclosure sale is rescinded under this section, the mortgagee
shall return to the purchaser the amount of the bid paid by the
purchaser for the property at the sale. The debtor shall return to
the trustee the amount of any excess proceeds received by the debtor
from the sale.
(g) The rescission of a foreclosure sale under this section
restores the mortgagee and the debtor to their respective title,
rights, and obligations under any instrument relating to the
foreclosed property that existed immediately before the sale
occurred.
(h) A civil action challenging the effectiveness of a
rescission under this section may not be filed after the 90th day
after the date the notices of rescission required by this section
are served. This subsection does not affect the limitations period
for an action claiming damages resulting from the rescission.
(i) If the foreclosure sale is rescinded under this section
for a reason listed in Subsection (b), other than a stay described
by Subsection (b)(6), the court in a civil action filed by the
purchaser challenging the effectiveness of the rescission or
claiming damages resulting from the rescission may only award as
damages to the purchaser the amount of the bid paid for the property
by the purchaser at the sale that has not been refunded to the
purchaser, plus interest on that amount at the rate of 10 percent
per year. Notwithstanding any other law, the court may not order
specific performance of the sale as a remedy for the purchaser.
Interest awarded under this subsection ceases to accrue on the
fourth day after the date the mortgagee deposits the amount of the
damages awarded in the United States mail or with a courier for
delivery to the purchaser.
(j) If a foreclosure sale is rescinded under this section
for a reason provided by Subsection (b)(6), the court in a civil
action filed by the purchaser challenging the effectiveness of the
rescission or claiming damages resulting from the rescission may
only award as damages to the purchaser the amount of the bid paid
for the property by the purchaser at the sale that has not been
refunded to the purchaser.
(k) Nothing in this section prohibits the rescission of a
sale by agreement of the affected parties on other terms or a suit
to rescind a sale not rescinded under this section.
SECTION 2. The changes in law made by this Act apply only to
a foreclosure sale that occurs on or after the effective date of
this Act. A foreclosure sale that occurred 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.
SECTION 3. This Act takes effect September 1, 2015.