Texas Commercial Law Firm

Please note that the demise of Durrett should have little practical effect on recovery of deficiencies in Texas. Recent enactments protect borrowers from deficiency liability exceeding the difference between the fair market value of the property and the total sum owed by the borrower (see discussion, §H.2 below). In other situations (such as where the remaining loan balance is less than 70% of fair market value of the property), lenders should not feel compelled by Durrett to bid at least 70% of fair market value in order to have marketable title as title companies no longer have any basis for including the Durrett exception. In fact, we have instructed all title companies with whom we work that we will no longer accept title commitments bearing a Durrett exception. 3. Foreclosure sales procedures. The foreclosure sale must be conducted by the trustee or a validly appointed substitute trustee. (See discussion in §II.E above). A sale conducted by anyone else is void.

When conducting the sale, many trustees simply read a copy of the posted Notice of Sale or a prepared script reciting the pertinent facts such as the lien information and the property description and then announce that they will accept bids. Texas law makes no requirement about what must be said at the time of sale although enough information must be provided to allow a fact finder to reasonably conclude that a sale was conducted. In fact, the lender is under no duty to take any affirmative action beyond that required by statute or the deed of trust to ensure a fair sale. First State Bank v. Keilman, 851 S.W.2d 914 (Tex. Civ. App.--Austin 1993, app. for writ filed).

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