The bill, S.B. No. 2833, amends the Texas Property Code to introduce new provisions regarding the nonjudicial foreclosure sale of certain residential real properties. It adds Section 51.0012, which requires lenders to provide written notice to borrowers at the time they sign the security instrument, informing them that a third party designated by the borrower can request to receive copies of any notices of default or sale. This third party can include family members, approved housing counseling agencies, or attorneys. Additionally, Section 51.017 is added to outline specific requirements for mortgage servicers when serving notices of default, including the obligation to notify the debtor about the option to designate a third party to receive notices.

Furthermore, the bill establishes procedures for postponing foreclosure sales if the 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 requires mortgagees to provide a fair market valuation of the property prior to the sale. These provisions aim to enhance borrower protections and ensure fair practices in the foreclosure process. The act is set to take effect on September 1, 2025.

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