Senate Bill No. 2833 amends the Texas Property Code by adding new sections that enhance the notification process for borrowers facing nonjudicial foreclosure on their residential real property. Specifically, it introduces Section 51.0012, which requires lenders to inform borrowers at the time of signing the 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 procedures for nonjudicial foreclosure sales, mandating that mortgage servicers provide written notice to debtors at least 30 days before serving a notice of default, and also requires that any notices of default or sale be sent to the designated third party.

The bill further stipulates that if a debtor submits a listing agreement for the sale of the property or a signed purchase agreement before the scheduled sale date, the foreclosure sale must be postponed. It also establishes that a trustee may 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, a second sale may be conducted with different bidding criteria. The provisions of this bill will apply to foreclosure actions initiated on or after its effective date of September 1, 2025.

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