Texas Commercial Law Firm

5. The Debtor's address for purposes of notice has been defined and clarified.

One helpful definition relates to the debtor's address for purposes of notice. A substantial amount of foreclosure litigation has arisen over the years based on claims that notice was not received or that it was sent to the wrong address. The previous requirement was for notice to be provided to the debtor at the debtor's last known address according to the records of the lender. Under the prior requirement, a debtor who merely used a different return address when making a payment could claim that the lender had a more recent address for him in its records. This revision to the Property Code is designed to eliminate such claims. The new section reads: "Debtor's last known address" means:

     (A) for a debt secured by the debtor's residence, the debtor's residence address unless the debtor provided the mortgage servicer a written change of address before the date the mortgage servicer mailed a notice required by Section 51.002; or
     (B) for a debt other than a debt described by Paragraph (A), the debtor's last known address as shown by the records of the mortgage servicer of the security instrument unless the debtor provided the current mortgage servicer a written change of address before the date the mortgage servicer mailed a notice required by Section 51.002.

Texas Legislature HB 1493, Property Code Sec. 51.001(2) (2004) [Emphasis added]

In short, as to debt's secured by the debtor's residence, the debtor's residential address will serve as the “last known address” unless the debtor provides the mortgage servicer with a timely written change of address. It is important to note that for the most part, the prior rule applies as to non-residential property.

6. Book-entry registrations systems such as MERS are now recognized under the Texas Property code.

Although present for years in many thousands of loans in Texas, bookentry registration systems are expressly recognized for the first time by being defined as follows:

"Book entry system" means a national book entry system for registering a beneficial interest in a security instrument that acts as a nominee for the grantee, beneficiary, owner, or holder of the security instrument and its successors and assigns.

Texas Legislature HB 1493, Property Code Sec. 51.0001(1) (2004)

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