The bill, S.B. No. 2833, amends the Texas Property Code by adding new sections that enhance the notification process for nonjudicial foreclosure sales of residential real property. Specifically, it introduces Section 51.0012, which requires lenders to inform borrowers at the time of signing a security instrument that they can designate a third party—such as a family member, a HUD-approved housing counseling agency, or an attorney—to receive copies of any notices of default or sale. Additionally, Section 51.017 outlines the obligations of mortgage servicers regarding the notification of debtors in default, including the requirement to provide written notice by certified mail at least 30 days before serving a notice of default.

Furthermore, the bill establishes procedures for postponing foreclosure sales if a debtor provides a listing agreement or a signed purchase agreement before the sale date. It mandates that a trustee or substitute trustee must not accept bids below 67 percent of the fair market value of the property during the initial sale, and if no qualifying bids are received, the sale must be postponed. The bill also stipulates that the fair market value must be determined by specific methods, including appraisals and automated valuation models. The provisions of this act will apply to foreclosure actions initiated on or after its effective date of September 1, 2025.

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