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First Tuesday can be “First Wednesday”: Legislative Update on Foreclosure Laws
Author: Barry Johnson
The recently concluded Regular Session of the Texas Legislature resulted in two seemingly minor but important changes to Texas foreclosure law.
First in House Bill 1128, the Texas Legislature amended Section 34.002 of the Civil Practices and Remedies Code to allow foreclosure sales that would otherwise occur on January 1 and July 4 (if those days are the first Tuesday of the month) to occur on the first Wednesday. Every seven years, “first Tuesday” foreclosure sales occur on January 1 or July 4 (this will next happen January 1, 2019). HB 1128 moves these sales to the first Wednesday (January 2, or July 5). The change is designed to encourage attendance and bidding at foreclosure sales, and brings Texas law in line with other “first Tuesday” foreclosure states (all of which have similar provisions.) This law became effective September 1, 2017.
Second, House Bill 1470 (and Senate Bill 1405) amends the Business and Commerce Code by clarifying how a trustee at a foreclosure sale handles third party bidders. Specifically, a winning third party bidder at a foreclosure sale will now be required, if asked by the trustee conducting the sale, to provide: (a) contact information for each party tendering a purchase price; (b) the name and address for any grantee named in a Substitute Trustee’s Deed; and (c) the purchaser’s tax ID number. The trustee may also require photo ID to confirm the identity of any party tendering third party proceeds and can require “other information reasonably needed to complete the trustee’s duties” associated with a third party sale. Refusal to tender any of this information allows the trustee to refuse the third party bid. In addition, the bill specifies how a trustee handles and accounts for third party sale proceeds, and addresses legal fees payable from sale proceeds. This law also took effect on September 1, 2017.
If you have any questions regarding these bills or any other recent legislation, please contact Barry D. Johnson at 214-560-1714 or email@example.com.