Foreclosure Flashcards
When must all foreclosure sales under a Deed of Trust take place?
Between 10am-4pm on the first Tuesday of the month.
The sale must take place at the time stated in the notice of sale or not later than three hours after that time.
Where must all foreclosure sales under a Deed of Trust take place?
The County Courthouse where the property in which the land is located.
If the property is located in more than one county, then the sale may be located in any where the property is partially located.
The commissioners court must designate an area at the courthouse where the sales are to take place. The designation must be recorded in the real property records.
If no area is designated by the commissioners court, then the notice of sale must designate the area where the sale is to take place and the sale must take place in that area.
The commissioners court may designate an area other than the county courthouse for the sale of property so long as it is within a reasonable proximity to the county courthouse and is accessible to the public.
You cannot invalidate a sale based upon a designation by the commissioners court.
What are the exceptions to a sale being held on the 1st Tuesday of the month?
If the first Tuesday falls on either January 1st or July 4th, then the sale must be held between 10am and 4pm on the first Wednesday of the month.
What are the requirements for a Notice of Sale?
1) It must include a statement of the earliest time a sale will begin.
2) It must be sent at least 21 days before the sale. (For computing time, you count the day it was sent/posted but do not count the day of sale.)
3) It must be posted at the courthouse door of each county in which the property is located designated the county in which the property will be sold;
4) Filing a copy in the County Clerk’s Office in each county in which the property is located; and
5) Serving written notice of the sale by Certified Mail on each debtor who is obligated to pay the debt.
6) Include the name and address of the sender of the notice (trustee);
7) SCRA Notice in conspicuous boldfaced or underlined type:
“Assert and protect your rights as a member of the armed forces of the United States. If you are or your spouse is serving on active military duty, including active military duty as a member of the Texas National Guard or the National Guard of another state or as a member of a reserve component of the armed forces of the United States, please send written notice of the active duty military service to the sender of this notice immediately.”
What if the courthouse or clerk’s office is closed due to inclement weather, natural disaster, or act of God, and you are unable to post a Notice of Sale at least 21 days prior to the sale?
The notice may be filed and posted up to 48 hours after the courthouse or county clerk’s office reopens for business, as applicable.
How much time must a debtor be given to cure a debt in a Notice of Default prior to a Notice of Sale is sent?
At least 20 days. The day the Notice of Default is placed in the mail is not counted.
Must a Notice of Default and Notice of Sale be sent via Certified Mail?
Yes.
They are not required to be sent Return Receipt Requested.
When is service of a Notice of Default or Notice of Sale complete?
When is deposited into the United States mail, postage prepaid, and addressed to the debtor at the debtor’s last known address.
What are the requirements of County Clerk’s with regards to a Notice of Sale?
They must keep them in a file available to the public for examination during normal business hours.
If the County maintains a website the Notice of Sale must be posted on the website so that it is publicly available for viewing without charge.
They may dispose of the notices after the date of the sale has passed.
They may charge a fee of $2 for each Notice of Sale filed.
How must an owner provide an Association/mortgage servicer of a change of address?
“In a reasonable manner”
Texas Active Duty Military Protections are codified at TPC 51.015. To who are they applicable?
1) They are applicable to active duty military service.
2) The active duty military servicemember must own a dwelling with a deed of trust or assessment.
3) The obligation must have originated before the date on which the servicemembers active duty service commenced (e.g. if the loan was established while active duty, then no protections under this act apply).
What protections under Texas law does an active duty military servicemember have? TPC 51.015
Specifically- what may a court do to the proceedings & the contractual obligation?
If the action is filed during a period of active duty or within 9 months after, the court may, upon motion of the active duty member, or its own motion:
1) Stay the proceedings for a period of time as justice and equity require; or
2) adjust the obligations of the contract secured by teh lien to preserve the interest of all parties.
What protections under Texas law does an active duty military servicemember have? TPC 51.015
Specifically- what is the general rule regarding foreclosures and what are the exceptions?
A foreclosure sale or seizure of property may not take place against an active duty servicemember or within the 9 months after they end active duty service.
Exceptions:
1) A court order.
2) Servicemember waives his rights:
Waiver Requirements:
a) 12 point type minimum;
b) executed as an instrument separated from the obligation to which the waiver applies.
c) Executed during or after the period of active military service; and
d) Specifying the legal instrument to which the wiaver applies.
What are the penalties for violating Texas active duty servicemember protections?
Class A misdemeanor if the violation is done KNOWINGLY.
Do dependents of active duty military servicemembers have protections under Texas Law?
Yes. Upon application to a court a dependent is entitled to protection if the dependents ability to comply with the obligation is materially affected by teh servicemembers military service.
If a judgment is set aside or court action stayed under the Texas active duty servicemembers protections, what happens to the judgment or court action as to any other party that is also subject to the obligation?
The court action may be stayed or judgment set aside against any other party that is also obligated under the debt.
Exception- that co-debtor could also sign a waiver. The waiver requirements are the same as the above for a servicemember (12 point type, separate instrument, during period of military service). However, the waiver is not effective if the dependent later enters military service but was not active duty at the time they signed the waiver.
Under what circumstances may a trustee rescind a foreclosure sale under TPC 51.016?
How long does he have to rescind the sale under that statute?
A trustee may rescind a sale no later than the 15th day after the date of the foreclosure sale if:
1) Statutory requirements for the sale were not satisfied;
2) Default was cured prior to sale;
3) A receivership or dependent probate was pending at the time of the sale;
4) A condition specified on the conditions of the sale prescribed by the trustee before the sale and made available in writing to prospective bidders at the sale was not met; or
5) Bankruptcy.
What are the steps to rescind a foreclosure sale under TPC 51.016?
1) Written Notice and Filing of Notice-
Within 15 days of the date of the sale, the trustee must serve written notice of rescission via CM describing the reason for rescission and including any recording information for any affected trustee’s deed that was recorded.
Notice must be served on-
a) The purchaser (if mortgagee was not the purchaser); and b) Each debtor who is obligated to pay debt.
Must file a copy of each notice in County Clerk’s Office.
2) Return of Funds-
Within 5 days of rescission of the sale, trustee must return funds to purchaser via CM, electronic mail, or via courier. Must return amount bid by purchaser for property. Bid amount is considered returned when it is deposited into mail.
Debtor must return any excess proceeds to the trustee.
3) File affidavit of Return of Bid-
Trustee must file affidavit with following information:
a) Date bid was returned; and
b) Tracking information for return of bid.
What is the effect of a rescission of a FC sale upon the Debtor and Trustee as to their rights in the property?
A rescission of a FC sale under this section restroes all parties to the rights and title they held immediatly prior to the sale.
What is the effect of a rescission of a FC sale upon a BFP?
1) A rescission of a FC sale is void as to a BFP without notice unless the rescission has been noticed and sworn to as required above.
If you dont record the notices and follow the above, the BFP will take the property and your rescission will be void.
What is the statute of limitations for a challenge to a rescission of a FC Sale?
30 days after the date the Notices of rescission are filed. No action challenging the effectivenes of a rescission may be filed after that date.
This 30 day period does not affect the limitations period for an action claiming damages resulting from the rescission.
If a purchaser challenges a rescission, what damages are available to be paid?
1) The purchase prices paid by the purchaser at the sale that has yet to be refunded; plus
2) 10% interest on that amount (per year). Interest ceases to accrue on the 4th day after the date the mortgagee deposits the amount of the damages awarded in the United States mail or with a courerior for delivery to the purchaser.
a) +++Exception+++ Court may not award interest to purchaser if rescission is because of bankruptcy filing by debtor.
The court may not award specific performance of the sale as a remedy to the purchaser*
May parties agree to rescind a foreclosure sale on their own terms not outlined in the Texas Property Code?
Yes.
What documents must a County Clerks record and shall serve as notice to all parties?
1) Appointment of trustee;
2) Notice of Sale
3) Notice of Default;
4) Proof of Service
5) SCRA documentation;
6) Affidavit of material facts regarding the sale prepared by an attorney
These must be attached as exhibits to either:
1) Trustees deed; or
2) Affidavit of trustee.
Is a trustee or substitute trustee a debt collector?
No. Not per TPC 51.0075.
May a trustee set reasonable conditions for conducting a sale?
Yes.
So long as the conditions have been announced before bidding has been opened.
When is the purchase price due after a foreclosure sale?
Upon acceptance of the bid or within a reasonable time as may be agreed upon by the purchaser and the trustee if the purchaser makes a request for additional time.
What Section of the property Code requires an Application for Expedited Foreclosure?
What does that section state?
TPC 209.0092. It states that a POA may not foreclose its assessment lien unless it first obtains a court court in an Application for Expedited Foreclosure.
The Texas Supreme Court established rules governing such procedures and promulgated forms for such procedure.
