Bill Text: TX HB2066 | 2015-2016 | 84th Legislature | Enrolled

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Bill Title: Relating to the rescission of nonjudicial foreclosure sales.

Spectrum: Slight Partisan Bill (Democrat 2-1)

Status: (Passed) 2015-06-16 - Effective on 9/1/15 [HB2066 Detail]

Download: Texas-2015-HB2066-Enrolled.html

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H.B. No. 2066

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 of
residential real property conducted under Section 51.002. In this
subsection, "residential real property" means:
(1) a single family home, duplex, triplex, or
quadraplex; or
(2) a unit in a multiunit residential structure in
which title to an individual unit is transferred to the owner of the
unit under a condominium or cooperative system.
(b) Not later than the 15th calendar 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) On or before the 15th calendar day after the date of the
sale, the party rescinding the sale shall:
(1) serve a written notice of rescission that
describes the reason for the rescission and includes recording
information for any affected trustee's or substitute trustee's deed
that was recorded on:
(A) the purchaser, if the mortgagee is not the
purchaser; and
(B) each debtor who, according to the records of
the mortgage servicer of the debt, is obligated to pay the debt; and
(2) file each notice for recording in the real
property records of the county in which all or a part of the
property is located.
(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) Not later than the fifth calendar day after the date a
foreclosure sale is rescinded under this section, the mortgagee
shall return to the purchaser by certified mail, electronic or wire
transfer, or courier service with delivery tracking 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. The return of the bid amount
is considered made on the date:
(1) the bid amount is deposited postage prepaid in the
United States mail or with the courier service addressed to the
purchaser at the purchaser's last known address; or
(2) the electronic or wire transfer is ordered.
(f) The rescinding mortgagee, trustee, or substitute
trustee shall cause to be filed for recording in the real property
records of the county where the notice required under Subsection
(c) was recorded an affidavit stating the date the bid amount was
returned together with the certified mail, electronic or wire
transfer, or courier service delivery tracking information.
(g) An affidavit executed and filed in accordance with
Subsection (f) is prima facie evidence of the return of the bid
amount and of the authority of the maker of the affidavit. A bona
fide purchaser, lender, or other person acquiring an interest in
the property or an insurer of title is entitled to rely conclusively
on the record of the filed affidavit and notice, and any subsequent
purchaser in good faith and for value is entitled to bona fide
purchaser protection.
(h) 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 prior to the sale.
(i) A rescission of a foreclosure sale under this section is
void as to a creditor or to a subsequent purchaser for a valuable
consideration without notice unless notice of the rescission has
been acknowledged, sworn to, or proved and filed for recording as
required by law. A rescission of a foreclosure sale under this
section evidenced by an unrecorded instrument is binding on a party
to the instrument, on the party's heirs, and on a subsequent
purchaser who does not pay a valuable consideration or who has
notice of the instrument.
(j) No action challenging the effectiveness of a rescission
under this section may be commenced unless the action is filed on or
before the 30th calendar day after the date the notices of
rescission required by Subsection (c) are filed for recording. A
lis pendens notice based on the rescission not recorded within that
period has no effect. This subsection does not affect the
limitations period for an action claiming damages resulting from
the rescission.
(k) 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.
(l) 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.
(m) 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.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 2066 was passed by the House on April
22, 2015, by the following vote: Yeas 142, Nays 0, 2 present, not
voting; and that the House concurred in Senate amendments to H.B.
No. 2066 on May 23, 2015, by the following vote: Yeas 130, Nays 0,
2 present, not voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 2066 was passed by the Senate, with
amendments, on May 22, 2015, by the following vote: Yeas 31, Nays
0.
______________________________
Secretary of the Senate
APPROVED: __________________
Date
__________________
Governor