Texas Commercial Law Firm

Practically speaking, in the vast majority of foreclosure sales in Texas, the mortgagee will buy the property by bidding as a credit against the secured debt. A very small percentage of properties sold at foreclosure are sold to third-party bidders. Despite the small percentage of properties sold at foreclosure to third party bidders, a substantial body of case law has arisen from third party sales. 4. Third party purchasers. The deed of trust generally will call for the sale to be a cash sale. Where the deed of trust requires cash, but the successful bidder delivers a cashier's check, however, the sale is not defective and there is no cause of action for wrongful foreclosure. Burnett v. Manufacturers Hanover Trust, 593 S.W.2d 755 (Tex. Civ. App.--Dallas 1979, writ ref'd n.r.e.). Although the trustee may require cash or a cashier's check, they may also accept any form of payment he or she wishes to accept, including credit. Valley International Properties, Inc. v. Ray, 586 S.W.2d 897 (Tex. Civ. App.--Corpus Christi 1979, no writ).

5. Reasonable amount of time to obtain cash. A purchaser at a foreclosure sale is entitled to a reasonable amount of time to obtain cash. First Federal Savings and Loan Association v. Sharp, 359 S.W.2d 902 (Tex. 1962). A trustee waited a reasonable amount of time when he waited for the successful bidder to return with cash from 11:15 AM to 2:00 PM. At 2:00 PM the trustee left. The Court found no evidence that the bidder would have produced cash on a further delay. Kirkman v. Amarillo Savings Association of Amarillo, 483 S.W.2d 302 (Tex. Civ. App.--Amarillo 1972, writ ref'd n.r.e.).

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