Note: When preparing this form, the attorney should carefully review Tex. Prop. Code §§ 51.0001, 51.0025, and 51.0075 and Tex. Bus. & Com. Code §§ 3.203 and 3.301 to ensure any reference to a person accurately describes the role the person holds or performs in the context of a foreclosure proceeding, e.g., references to “noteholder,” “beneficiary,” “owner,” “lender,” “obligor of the debt,” “mortgagor,” “mortgagee,” or “mortgage servicer” as appropriate.
Letter Employing Local Attorney to Conduct Sale
[Date]
[Name and address]
Re: Foreclosure on mortgaged property securing loan by [name of lender] to [name of borrower]
[Salutation]
Enclosed are the following instruments pertaining to the above-mentioned foreclosure:
1.Appointment of [name] as substitute trustee (two copies).
2.Foreclosure sale transcript.
3.Foreclosure sale deed for sale to the lender (two copies).
4.Foreclosure sale deed for sale to unknown third party (two copies).
5.Copy of the notice of foreclosure sale sent to the borrower and copy of U.S. mail return receipt cards.
6.Copy of loan documents.
Appointment of Substitute Trustee. It is imperative that the appointment of substitute trustee be recorded with the county clerk’s office before you begin the foreclosure proceedings. Failure to do so may invalidate the sale. At the time you record the instrument, ask the file clerk to file-stamp the second copy of the appointment. Please return the file-stamped copy to us when you forward the completed foreclosure sale transcript and certified copy of the filed foreclosure sale deed.
Checklist of What to Say at Sale. The foreclosure sale transcript is designed to ensure that the sale is conducted in accordance with law and also serves to ensure that a transcript of the foreclosure sale exists should a subsequent challenge to the sale be made. Sections 1 through 9 of the transcript should be read verbatim as part of the sale’s proceedings and contain self-explanatory directions.
Qualifying of Bidders. Before you begin the first foreclosure sale of the day on behalf of this beneficiary, we request that you qualify the bidders for this foreclosure by asking prospective bidders to identify themselves and provide some reasonable evidence or indication that the bidder will be able to procure and deliver to you, before 4:00 p.m. on the date of the sale, good and immediately available funds in an amount approximately equal to the anticipated successful bid, which will be not less than the highest bid you are authorized to make on behalf of the beneficiary under the deed of trust. For such purpose, “reasonable evidence or indication” will mean [describe nature of the evidence required by the beneficiary].
Fair Public Auction. It is important that the sale be conducted in a fair and open manner. You should attempt to ensure that your voice is heard by everybody present, that you answer to the best of your ability questions from those present (but say “I don’t know” if that is true), and that in general nothing is done that would imply that the sale is being done in a secretive manner.
Time and Place of Sale. The sale must begin at or within three hours of the time specified in the notice of foreclosure sale and must be completed by delivery of the purchase price before 4:00 p.m. (The deed itself may be executed, delivered, and recorded after 4:00 p.m.) The sale must be conducted at the location designated in the Notice of Foreclosure Sale.
Bids and Recess to Get Cash. You are entitled to ascertain that people making bids on the property in fact have adequate cash or can obtain cash before the 4:00 p.m. deadline by asking them to give some evidence of this point. If a party other than the lender is the apparent high bidder, you are required to announce a recess of the sale in order to permit the apparent high bidder a reasonable period in which to obtain the cash. This recess, however, must leave sufficient time to complete the sale before 4:00 p.m. or to reopen the auction to all bidders who were previously present if the apparent high bidder fails to produce the requisite cash by the deadline. If you do decide to recess the sale, it is absolutely imperative that you announce to those present that the sale will be reconvened at a specific time to accept the tender of cash and to reopen the sale if the apparent high bidder fails to deliver the cash at that time. The failure to notify those present of both of these points might serve to invalidate the sale if the apparent high bidder fails to deliver cash on his bid.
Deeds. The two foreclosure sale deeds, one assuming the lender to be the purchaser and the other for unknown third parties, are to be completed by filling in every blank with the appropriate information (price, date, and name of purchaser, as applicable). If a third party is the successful purchaser, you should deliver the deed to that party upon tender of the cash or cashier’s check. If the third-party purchaser delivers a large sum of cash as the purchase price, you should go immediately to the county sheriff’s office in the courthouse and have the sheriff or deputy escort you to the nearest bank, where you may deposit the cash for subsequent transfer to the lender.
The other instruments included in this package are for your use if any prospective purchaser wishes to examine the relevant instruments or be assured that the proper legal notices were sent.
Sincerely yours,
[Name of attorney]
Attorney for [name of lender]
State Bar No.:
[Email address]
[Address]
[Telephone]
[Telecopier]
Enc.
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