Texas Commercial Law Firm

9. Trustee may not bid for themselves. Generally, a trustee is not allowed to bid for themselves at a foreclosure sale and any trustee attempting to purchase at the sale will have the purchase set aside upon application of the mortgagor. Southern Trust and Mortgage Company v. Daniel, 184 S.W.2d 465 (Tex. 1944); Casa Montego v. Wat'd, 342 S.W.2d 812 (Tex. Civ. App.--Austin 1961, no writ).

10. Application of proceeds of sale. In the event proceeds of sale exceed the debt secured by the deed of trust foreclosed, any junior lienholders are entitled to the surplus in the order of their priority. In the event there are no junior lienholders or if the proceeds exceed the total indebtedness secured by junior liens, any excess proceeds then are returned to the borrower. Jeffrey v. Bond, 509 S.W.2d 563 (Tex. 1974); Wynne v. State National Bank of Fort Worth, 82 Tex. 378, 17 S.W. 918 (1891); Pearson v. Teddlie, 235 S.W.2d 757 (Tex. Civ. App.--Eastland 1950, no writ). In calculating the total indebtedness, the mortgagee may add attorney's fees and other expenses allowed to be added to the principal balance by the deed of trust. If a lienholder has priority over another lien to the extent of only a portion of the secured indebtedness and the senior lienholder's bid is in excess of that amount, the junior lienholder is entitled to such excess amounts, regardless of whether the prior lienholder simply canceled its indebtedness by its bid. Diversified Mortgage Investors v. Lloyd D. Blaylock, 576 S.W.2d 794 (Tex. 1978); Habitat, Inc. v. McKanna, 523 S.W.2d 787 (Tex. Civ. App.--Eastland 1974, no writ). This situation may occur where there has been subrogation of a prior lien or where an earlier lien is refinanced.

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