Texas House Bill HB4295

Texas 2019 - 86th Regular

Caption

Relating to default under a deed of trust or contract lien on certain residential property for the delinquent payment of ad valorem taxes.

Impact

This bill significantly modifies the existing property laws in Texas by ensuring that homeowners battling ad valorem tax issues can negotiate tax payments without facing immediate consequences under their mortgage agreements. It aims to provide greater financial security for residential homeowners and potentially reduce the incidence of foreclosures linked to tax delinquencies. By clarifying the right of homeowners to enter such agreements without being classified as in default, the bill could enhance the ability of taxpayers to manage their debts more effectively.

Summary

House Bill 4295 addresses the conditions under which a debtor is considered in default when it comes to a deed of trust or other contract lien on residential property, specifically relating to the delinquent payment of ad valorem taxes. The bill stipulates that a debtor shall not be deemed in default if they have entered into an installment agreement for tax payment with the appropriate taxing unit. Additionally, it protects the property from seizure or sale while the installment agreement is in effect, thus providing a safety net for homeowners facing tax delinquency.

Contention

While the bill appears to provide necessary protections and flexibility for homeowners, concerns may arise regarding its implications on mortgage servicers and how delays in tax payments could affect their operations. Mortgage companies might argue that such provisions could expose them to higher risks, especially if the number of tax delinquencies increases. The law might also prompt discussions about the balance between protecting homeowners and ensuring that tax revenues are collected efficiently.