Shaheen Bill Bars Lender’s Own Affiliates From Running Foreclosure Sales

The text as introduced · 318 words

90R2066 RAL-F

By: Shaheen
H.B. No. 1025

A BILL TO BE ENTITLED

AN ACT

relating to the qualifications of a trustee authorized or appointed

to exercise the power of sale of real property under a security

instrument.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. The heading to Section 51.0074, Property Code,

is amended to read as follows:

Sec. 51.0074. TRUSTEE DUTIES AND QUALIFICATIONS [ OF

TRUSTEE ].

SECTION 2. Section 51.0074, Property Code, is amended by

amending Subsection (a) and adding Subsections (c) and (d) to read

as follows:

(a) Subject to Subsection (c), one [ One ] or more persons may

be authorized to exercise the power of sale under a security

instrument.

(c) The following may not be authorized or appointed to

exercise the power of sale under a security instrument:

(1) a subsidiary or affiliate of the mortgagee; or

(2) a subsidiary or affiliate of the mortgage

servicer.

(d) For purposes of Subsection (c), "mortgage servicer"

includes the holder of the contractual obligation to service a

mortgage loan and the right to receive compensation for such

services in accordance with the contract, if other than the

mortgage servicer.

SECTION 3. Section 51.0074, Property Code, as amended by

this Act, applies only to the designation of a trustee under a

security instrument executed on or after the effective date of this

Act. The designation of a trustee under a security instrument

executed before the effective date of this Act is governed by the

law in effect immediately before that date, and that law is

continued in effect for that purpose.

SECTION 4. This Act takes effect immediately if it receives

a vote of two-thirds of all the members elected to each house, as

provided by Section 39, Article III, Texas Constitution. If this

Act does not receive the vote necessary for immediate effect, this

Act takes effect September 1, 2027.