St. Mary's Law Journal


A new law that recently took effect has changed the way non-judicial real property foreclosure sales work in Texas. The new law, known as House Bill 655 (HB 655), relates to foreclosure sales in Texas. HB 655 amends the language of Texas Property Code section 51.0075(f) dealing with when the purchase price is due at a foreclosure sale. The amendment, however, complicates foreclosure sales in Texas. The purchase price at the foreclosure sale is no longer due immediately. Instead, if a purchaser at a foreclosure sale requests additional time to deliver the purchase price, the trustee—the person conducting the foreclosure sale—may make an agreement with the purchaser to allow the purchaser additional time to deliver the purchase price. As a result, there are no guidelines that specify when payment is due. The intended goal of HB 655 was probably passed so that all potential purchasers did not have to bring thousands of dollars to foreclosure sales. The highest bidders could then have time to go to the bank to obtain and return with the cash needed to purchase the property. Despite these likely intentions, the law, as written, leaves much to interpretation. As everyone involved in the foreclosure process—including property owners, lenders, trustees, and purchasers—tries to understand the consequences of the new law, it is likely that lawsuits will arise. Therefore, it can be expected that Texas courts will have an opportunity to address and help clarify these issues in the months and years to come.


St. Mary's University School of Law