HB 2066

84(R) - 2015
House Business & Industry
House Business & Industry
Business, Industry, & Commerce

Vote Recommendation

  • Neutral
  • Positive
  • Neutral
  • Neutral
  • Neutral


Rene Oliveira

Bill Caption

Relating to the rescission of nonjudicial foreclosure sales.

Fiscal Notes

No significant fiscal impact to the State or local governments is expected.

Bill Analysis

This bill is has been substantively updated since we reported on it in its original chamber. The changes made in the Senate committee are administrative and do not alter the bill's overall provisions. We continue to support HB 2066.

Our first chamber analysis is below.

HB 2066 seeks to amend the Property Code in regards to the sale of real property under a contract lien. HB 2066 would allow a mortgagee, trustee, or substitute trustee to rescind the sale of a foreclosure no later than the 15th day after the sale if: statutory requirements were not met, the default leading to the sale was cured before the sale, a receivership or dependent probate administration involving the property was pending at the time of sale, 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,  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 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. 

If the trustee ’s or substitute trustee ’s deed has not been recorded in the deed records of a county in which all or part of the property is located, the foreclosure sale may be rescinded under this section by serving a written notice of rescission that describes the reason for the rescission to: the purchaser, if the mortgagee is not the purchaser and each debtor who, according to the records of the mortgage servicer of the debt, is obligated to pay the debt. The notices of foreclosure sale to be rescinded must be served by certified mail. Such notices of rescission and recording a copy of each notice in the deed records of each county in which the deed was recorded. 

The mortgagee has 5 business days after the date a foreclosure sale has rescinded, the mortgagee shall return to the purchaser the amount of the bid paid by the purchaser for the property at the sale and The debtor shall return to the trustee the amount of any excess proceeds received by the debtor from the sale. 

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 before the sale occurred. 

HB 2066 prohibits a civil action challenging the effectiveness of a rescission from being filed after the 90th day after the date the required notices of rescission are served but establishes that this prohibition does not affect the limitations period for an action claiming damages resulting from the rescission. 

If the foreclosure sale is rescinded for a reason other than a court-ordered or automatic stay, the damages a court in a civil action filed by the purchaser challenging the effectiveness of the rescission or claiming damages resulting from the rescission may award to the purchaser to 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. 

HB 2066 prohibits the court from ordering specific performance of the sale as a remedy for the purchaser.

HB 2066 seeks to establish that awarded interest 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. 

HB 2066 would establish that nothing in its provisions 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 the bill's provisions. 

The provisions in HB 2066 would only apply to foreclosure sales occurring on or after September 1, 2015. 

Vote Recommendation Notes

HB 2066 seeks to provide the statutory language allowing individuals the ability to void a foreclosure sales contract, and return to their positions as if the contract were never entered, provided they meet one of the six rescission provisions stated in the analysis. HB 2066 enhances the property rights of the defaulter and of those involved in purchasing the foreclosed property by providing a statutory out that does not require litigation. Under HB 2066, a debtor would be allowed to cure their default, cancel the sale of their property, and reclaim said property. Due to HB 2066 protection of private property rights, we support this legislation. 

Organizations Supporting

Texas Association of Realtors