Texas Commercial Law Firm

If the most common FNMA form deed of trust is used, once default is declared, a consumer is entitled to thirty days to cure the default. If a deed of trust secured by the borrower's residence does not specify a right to cure period, Texas law requires 20 days written notice to the borrowers of their right to cure the default. Tex. Prop. Code Ann. §51.002(d) (Vernon 1996). Beyond requiring thirty-days notice, the FNMA deed of trust requires the lender to provide specific notices to the borrower including notifying the borrower of his or her right to reinstate the debt after acceleration. Texas law requires that notice of intent to accelerate must be given prior to acceleration of the entire balance of an installment debt. Williamson v. Dunlap, 693 S.W.2d 373 (Tex. 1985). In addition, the Texas Supreme Court requires that the notice of intent to accelerate be clear and unequivocal to the extent that the “mortgagee must bring home to the [mortgagor] that failure to cure will result in acceleration of the note and foreclosure under the power of sale.” Ogden v. Gibraltar Sav. Ass'n., 640 S.W.2d 232, 233 (Tex. 1982).

As soon as the bankruptcy stay is lifted, it is not uncommon for lenders to give instructions to proceed with foreclosure notwithstanding that the Borrower has made payments since the loan was previously accelerated and some or all of such payments have been applied to the loan.

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