84R6857 NC-F
By: Oliveira H.B. No. 2069
A BILL TO BE ENTITLED
AN ACT
relating to the administration of foreclosure sales of real
property.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 1802.001, Occupations Code, is amended
by adding Subdivision (9-a) to read as follows:
(9-a) "Mortgage servicer," "mortgagee," "security
instrument," "substitute trustee," and "trustee" have the meanings
assigned by Section 51.0001, Property Code.
SECTION 2. Section 1802.002(a), Occupations Code, is
amended to read as follows:
(a) This chapter does not apply to:
(1) a sale conducted by order of a United States court
under Title 11, United States Code;
(2) a sale conducted by an employee of the United
States, this state, or a political subdivision of this state in the
course and scope of employment;
(3) a sale conducted by a charitable, religious, or
civic organization, including an organization having a tax exempt
status under Section 501(c), Internal Revenue Code of 1986, or
organized as a nonprofit entity, if the person organizing,
arranging, or conducting the auction receives no compensation;
(4) a sale conducted by any person of the person's
property if the person is not engaged in the business of selling
property at auction on a recurring basis;
(5) a foreclosure sale of real property personally
conducted by a trustee or substitute trustee under a security
instrument, if the trustee or substitute trustee:
(A) is an attorney or an employee of the
mortgagee or the mortgage servicer;
(B) has entered into a written agreement with an
attorney to administer and perform the functions of the trustee or
substitute trustee under the security instrument and Chapter 51,
Property Code, other than the advertising and conducting of the
auction; or
(C) is employed by an auction company to conduct
the auction, if the auction company has entered into a written
agreement with an attorney to administer and perform the functions
of the trustee or substitute trustee under the security instrument
and Chapter 51, Property Code, other than the advertising and
conducting of the auction [under a deed of trust];
(6) a foreclosure sale of personal property personally
conducted by:
(A) a person who holds a security interest in the
property, including a mortgage; or
(B) an employee or agent of a person described by
Paragraph (A) acting in the course and scope of employment, if:
(i) the employee or agent is not otherwise
engaged in the auction business; and
(ii) all property for sale in the auction is
subject to a security agreement;
(7) a sale conducted by sealed bid without the option
of increasing or decreasing the amount of a bid;
(8) an auction conducted only for student training
purposes as part of a course of study approved by the department;
(9) an auction conducted by a posted stockyard or
market agency as defined by the federal Packers and Stockyards Act
(7 U.S.C. Section 181 et seq.), as amended;
(10) an auction of livestock conducted by a nonprofit
livestock trade association chartered in this state, if the auction
involves only the sale of livestock owned by members of the trade
association;
(11) an auction conducted by a charitable or nonprofit
organization chartered in this state, if the auction:
(A) is part of a fair that is organized under
state, county, or municipal authority; and
(B) involves only the sale of property owned by
the organization's members; or
(12) a sale or auction conducted outside of this
state.
SECTION 3. Subtitle B, Title 5, Property Code, is amended by
adding Chapter 51A to read as follows:
CHAPTER 51A. FORECLOSURE SALES OF RESIDENTIAL REAL PROPERTY
Sec. 51A.001. DEFINITIONS. In this chapter:
(1) "Auction company" has the meaning assigned by
Section 1802.001, Occupations Code.
(2) "Mortgage servicer," "mortgagee," "security
instrument," "substitute trustee," and "trustee" have the meanings
assigned by Section 51.0001.
(3) "Proceeds of sale" means the sale price for a
property received at a foreclosure sale conducted by a trustee or
substitute trustee.
(4) "Residential real property" means:
(A) a single-family house;
(B) a duplex, triplex, or quadraplex; or
(C) a unit in a multi-unit residential structure
in which title to an individual unit is transferred to the owner of
the unit under a condominium or cooperative system.
Sec. 51A.002. APPLICABILITY. This chapter applies only to
a foreclosure sale of residential real property conducted under a
security instrument and Section 51.002.
Sec. 51A.003. ADMINISTRATION OF FORECLOSURE SALES. (a) A
foreclosure sale must be conducted by an individual who is a trustee
or substitute trustee authorized or appointed to exercise the power
of sale under a security instrument.
(b) Except as provided by Subsection (c), a trustee or
substitute trustee may enter into a written agreement with:
(1) an attorney to administer or perform any of the
trustee's or substitute trustee's functions or responsibilities
under a security instrument; or
(2) an auction company to arrange, manage, sponsor, or
advertise a foreclosure sale.
(c) A trustee or substitute trustee may not delegate the
performance of the public sale at auction of the property to any
person who is not a trustee or substitute trustee authorized or
appointed to exercise the power of sale under the security
instrument.
Sec. 51A.004. NOTICE OF SALE. The preparation and mailing
of a notice of sale required by Section 51.002 does not constitute
the practice of law.
Sec. 51A.005. INFORMATION FROM BIDDERS. (a) A trustee or
substitute trustee or an attorney or auction company that is
administering or managing a foreclosure sale at public auction may
request that bidders:
(1) register for the sale; or
(2) provide or display to the trustee, substitute
trustee, attorney, or auction company the following information:
(A) the name, address, telephone number, and
e-mail address of each individual tendering or who will tender the
sale price for a winning bid;
(B) if the bidder is acting on behalf of another
individual or organization, the name, address, telephone number,
and e-mail address of the individual or organization and the name of
a contact person for the organization;
(C) the name and address of any person to be
identified as the grantee in a trustee's or substitute trustee's
deed;
(D) for a winning bid, the purchaser's tax
identification number;
(E) a government-issued photo identification to
confirm the identity of each individual tendering funds for a
winning bid; and
(F) any other information reasonably needed to
complete the trustee's or substitute trustee's duties and functions
concerning the sale.
(b) A trustee, substitute trustee, attorney, or auction
company that requests a bidder to provide or display information
described by Subsection (a) before the sale may not refuse to allow
the bidder to bid if the bidder does not provide or display the
information before the sale.
(c) A trustee or substitute trustee may require a winning
bidder at a foreclosure sale to provide or display the information
described by Subsection (a) at the time the trustee or substitute
trustee completes the sale. If a bidder fails or refuses to provide
the information, the trustee or substitute trustee may:
(1) decline to complete the transaction;
(2) hold another auction; and
(3) sell the property to another bidder.
(d) Personal information obtained from a bidder in
connection with a foreclosure sale may not be sold or transferred by
a trustee, substitute trustee, attorney, or auction company without
the written informed consent of the bidder. The consent may not be
a condition of sale.
Sec. 51A.006. PURCHASER'S RECEIPT AND DEED. (a) After the
foreclosure sale, the trustee or substitute trustee shall:
(1) provide the winning bidder with:
(A) a purchaser's receipt for the proceeds of
sale; and
(B) a written copy of the conditions of sale
announced before bidding was opened for the first sale of the day
held by the trustee or substitute trustee; and
(2) except as provided by Subsection (b), within a
reasonable time:
(A) deliver the deed to the winning bidder; or
(B) file the deed for recording.
(b) If the foreclosure sale is disputed, the trustee or
substitute trustee may withhold the delivery or recording of the
deed while an action challenging the sale is pending in court.
Sec. 51A.007. PROCEEDS OF SALE. (a) Proceeds of sale
received in the form of checks or currency must be maintained in a
separate account until distributed to persons entitled to the
proceeds.
(b) The trustee or substitute trustee shall make reasonable
attempts to identify and locate the persons entitled to all or any
part of the proceeds of sale.
(c) A trustee or substitute trustee, or an attorney or
auction company acting under Section 51A.003, may make payments
from the proceeds of sale at any time.
(d) A person who accepts proceeds of sale tendered and
distributed by a trustee or substitute trustee takes the funds in
full satisfaction of claims for the proceeds of sale.
Sec. 51A.008. EXPENSES PAID FROM PROCEEDS OF SALE. (a) A
trustee or substitute trustee may be paid the trustee's or
substitute trustee's expenses for the sale from the proceeds of
sale, including:
(1) a trustee's or substitute trustee's fee of not more
than 2.5 percent of the proceeds of sale or the amount specified in
the security instrument;
(2) the actual costs of title evidence and records
searches incurred to identify parties legally entitled to the
proceeds of sale; and
(3) reasonable attorney's fees and costs incurred to
identify persons legally entitled to the proceeds of sale.
(b) A fee is:
(1) considered earned at the time of sale; and
(2) conclusively presumed to be reasonable if the fee:
(A) is not more than 2.5 percent of the proceeds
of sale, for a trustee's or substitute trustee's fee; or
(B) is not more than 1.5 percent of the proceeds
of sale, for an attorney's fee under Subsection (a)(3).
(c) A trustee or substitute trustee or an attorney who
prevails in a suit concerning a foreclosure sale of residential
real property conducted by the trustee or substitute trustee is
entitled to recover reasonable attorney's fees necessary to defend
the action, which may be paid from the excess proceeds of sale, if
any.
SECTION 4. (a) Section 1802.002, Occupations Code, as
amended by this Act, applies only to a foreclosure sale conducted on
or after the effective date of this Act. A foreclosure sale
conducted 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.
(b) Chapter 51A, Property Code, as added by this Act,
applies only to a foreclosure sale for which the notice of sale is
given under Section 51.002, Property Code, on or after the
effective date of this Act.
SECTION 5. This Act takes effect September 1, 2015.