Form 20-1

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.

Petition for Judicial Foreclosure

TO THE HONORABLE JUDGE OF SAID COURT:

Plaintiff, [name of plaintiff], seeks to enforce a loan agreement made by defendant(s) [name(s) of defendant(s)], who used the loan proceeds to acquire certain real property located in [county] County, Texas. Plaintiff would respectfully show the Court:

I.

Discovery Level

1.Discovery is intended to be conducted under [level 2/level 3] pursuant to rule 190 of the Texas Rules of Civil Procedure.

II.

Parties

2.Plaintiff, [name of plaintiff], is the original mortgagee, as that term is defined in Texas Property Code section 51.0001(4), of a loan agreement, as that term is generally defined in Texas Business and Commerce Code section 26.02, evidenced by a note and secu­rity agreement, i.e., [vendor’s lien/deed of trust], encumbering the property made the subject of this proceeding as collateral for the performances of defendant’s loan agreement obliga­tions. Plaintiff also has superior title to the property secured by a vendor’s lien until the pur­chase money advanced to defendant under the loan agreement is paid. [Name of mortgage servicer] is the plaintiff’s current agent for loan service administration, commonly known as the mortgage servicer, as that term is defined in Texas Property Code section 51.0001(3), of the defendant’s loan agreement account and, as plaintiff’s virtual representative, may enforce defendant’s loan agreement pursuant to Texas Business and Commerce Code sections 2.303, 3.301, or 9.604, as well as administer the foreclosure process under Texas Property Code sec­tion 51.0025. See Sprint Communications v. APCC Services Inc., 554 U.S. 269 (2008). Plain­tiff is generally referred to as mortgagee in this petition and includes the mortgage servicer as the context implies.

3.Defendant [name of maker of the note] (“obligor”) is the maker or assumptor of a US $[amount] note and grantor, i.e., the person who executed the security agreement as the mortgagor, of a deed of trust evidencing defendant’s promise and obligation to repay defen­dant’s loan agreement debt to the mortgagee or its successor or assigns and can be served with citation at [address, city, state, zip].

4.Defendant [name of mortgagor of the deed of trust who did not sign the note] (“mortgagor”) did not execute the note and is not personally obligated for the debt; however, mortgagor executed the deed of trust encumbering the property as security for performance of the obligations under the deed of trust. The mortgagor can be served with citation at [address, city, state, zip].

5.Defendant [name of inferior lienholder with a lien against the property] is the mort­gagee of an inferior lien recorded in the real property records that encumbers the property and can be served with citation at [address, city, state, zip].

6.Defendant [name of guarantor] executed a guaranty of the loan agreement obliga­tion made the subject of this proceeding and can be served at [address, city, state, zip].

7.Defendant [name of any other person who is a necessary or proper party] is a [nec­essary/proper] party because [state the reason the person is a necessary or proper party] and can be served at [address, city, state, zip].

8.The United States of America is the holder of a [describe the type of lien, e.g., fed­eral tax lien] recorded in the real property records of the county that encumbers the property. The United States of America may be served through [name], U.S. Attorney for the [district] District of Texas at [address]; [name], U.S. Attorney, District Civil Chief and Administrative Officer at [address]; and [name], U.S. Attorney, [division] Division, [district] District of Texas at [address]. To complete service, a copy of the petition is sent via certified mail, return receipt requested, to the U.S. Attorney General [name], U.S. Department of Justice, 950 Penn­sylvania Avenue NW, Washington, DC 20530.

III.

Property

9.Defendant agreed the real property and improvements described in the [vendor’s lien/deed of trust] recorded in the real property records of [county] County, Texas, and com­monly known as [address], would serve as collateral and secure repayment and performance of defendant’s obligations under the loan agreement. The property is more particularly described as:   [legal description of secured property].

IV.

Jurisdiction and Venue

10.As provided by Texas Government Code section 25.007, this Court has jurisdic­tion over this controversy because the amount at issue is within the jurisdictional limits of the Court.

11.Venue for this matter is proper in [county] County, Texas pursuant to Texas Civil Practice and Remedies Code section [15.011/15.002].

V.

Documentation

12.True and correct copies of the various documents and instruments attached to this petition are the mortgagee’s business records and are made a part of this petition for all pur­poses:

a.Note—Exhibit A

b.Deed of Trust—Exhibit B

c.Vendor’s Lien reserved in Deed—Exhibit C

d.Current Assignment—Exhibit D

e.Guaranty—Exhibit E

f.Government Lien—Exhibit F

g.Other—Exhibit G

VI.

Factual Background

13.On or about [date], defendant [name of defendant] jointly and severally received loan proceeds in the amount of $[amount] from the original mortgagee to acquire the property and entered into a loan agreement to repay the debt as evidenced by defendant’s signing or assuming a note, executing a deed of trust and other loan agreement documents, reservation of the vendor’s lien to the mortgagee, and delivering all loan agreement documents for the bene­fit of the mortgagee.

14.The mortgagee’s obligation under the note was generally completed when it advanced $[amount] in loan proceeds to defendant to acquire the property. By accepting and having the use and benefit of the loan proceeds, defendant will obtain a windfall if defendant fails to complete the obligations under the terms and conditions of the note and deed of trust.

15.The executed and recorded deed of trust is an independent contract incident to the note and contains a power of sale authorizing a trustee or substitute trustee to foreclose the property securing defendant’s loan agreement debt if defendant breaches the terms of the loan agreement. The vendor’s lien reserved to mortgage in the deed conveying the property to defendant secures superior title to plaintiff until the purchase money is paid. “There is no prin­cipal better settled than that the vendor’s lien secures the debt contracted for the purchase money, and not merely the note by which such debt is evidenced.” Slaughter v. Owens, 60 Tex. 668, 670 (Tex. 1884).

16.In Carpenter v. Logan, 83 U.S. 271, 274 (1872), the U.S. Supreme Court gave rise to the maxim “the mortgage follows the note” and is an inseparable incident of note evidenc­ing the defendant’s promise to repay the debt secured by the property. Having custody, con­trol, or control of physical possession of the defendant’s note, the mortgagee and the mortgage servicer may enforce the defendant’s loan agreement debt pursuant to Texas Business and Commerce Code sections 2.303, 3.301, or 9.604.

17.According to the mortgage servicing records for defendant’s loan agreement account, as of [date] there has been a material breach of the loan agreement because at least [number] regular scheduled monthly loan payments have not been made in accordance with the terms of the loan agreement. The amount due and payable by defendant increases daily because of the accrual of earned interest, collection costs, taxes, and insurance paid by the mortgagee or mortgage servicer and other fees and expenses authorized by the defendant’s loan agreement. At any time upon defendant’s request, the precise amount due to reinstate or pay off the loan as of a certain date may be obtained from the mortgage servicer through plaintiff’s undersigned counsel. As of [date] the amount required to cure the loan agreement default was at least $[amount], and the payoff, as that term is generally defined in Texas Prop­erty Code section 12.017(5), is at least $[amount].

18.Only the person who signed the note is personally obligated for the debt; however, a material breach of the terms and conditions of the deed of trust subjects the mortgagor to foreclosure of the property serving as the collateral and the security for payment and perfor­mance of the loan agreement debt. By filing this petition, plaintiff gives notice of its unequiv­ocal intention to accelerate the maturity of the loan agreement if it is an installment loan and rescinds or waives any previous notice of intent to accelerate the maturity of an installment debt.

19.As required by Texas Rule of Civil Procedure 54, the conditions precedent required to enforce the loan agreement have occurred or been performed with the exception that if the note is an installment note, defendant may cure the default by reinstating the loan under the terms of the loan agreement at any time before judgment. Therefore, the mortgagee does not accelerate the maturity of the debt until the date of final judgment.

20.The current mortgagee is a bona fide purchaser for value of the defendant’s loan agreement, and defendant’s material default in complying with defendant’s loan agreement promises and obligations causes a financial injury to the current mortgagee.

VII.

Causes of Action

21.Plaintiff seeks a final judgment against the obligor and mortgagor of the loan agreement for repayment of the debt as determined under the terms of the loan agreement and a judgment for foreclosure and order of sale of the property encumbered by the deed of trust and vendor’s lien. At the time of judgment, plaintiff seeks all lawful amounts owed by defen­dant, to include all unpaid principal, accrued earned interest, any taxes and insurance advanced by the mortgagee or mortgage servicer to preserve and protect property, as well as all fees, costs, and expenses allowed under the terms of the loan agreement, including attor­ney’s fees. The judgment amount increases daily because of earned interest, fees, costs, and expenses allowed under the loan agreement and cannot be specifically determined until the date of judgment.

22.Mortgagee seeks to enforce defendant’s promise to repay the loan agreement by:

a.a personal judgment in the amount legally due in accordance with the terms and conditions of the loan agreement and calculated as of the date of final judgment against the defendant executing and delivering the note and deed of trust as well as a judgment for judicial foreclosure of the property encum­bered by the loan agreement debt pursuant to Texas Rule of Civil Procedure 309 with an order of sale issued to any sheriff or constable in the state of Texas;

b.a judgment for the loan agreement debt determined in another judicial pro­ceeding and judicial foreclosure of the property in rem under Texas Rule of Civil Procedure 309 with an order of sale issued to any sheriff or constable in the state of Texas;

c.a judgment for judicial foreclosure of the property encumbered by the ven­dor’s lien with the logistical means of conducting the foreclosure sale for due-process reason in accordance with the power of sale and terms of the deed of trust and Texas Property Code chapter 51;

d.a judgment entered under the Uniform Declaratory Judgment Act, Texas Civil Practice and Remedies Code sections 37.001 through 37.011, declaring by virtue of the power of sale and other express terms found in the deed of trust that the property may be sold by nonjudicial foreclosure under the terms and conditions of the deed of trust and Texas Property Code chapter 51; and

e.beginning at least thirty days after the foreclosure sale and in accordance with Texas Rule of Civil Procedure 310, the purchaser of the property at the fore­closure sale have a writ of possession to remove defendant, occupants, and any other persons claiming under defendant from possession of the property.

23.Under Texas Rule of Civil Procedure 48, plaintiff pleads in the alternative for a final judgment for either judicial or nonjudicial foreclosure; however, plaintiff acknowledges and agrees before a final judgment is entered plaintiff must elect either a judgment for judicial foreclosure under Texas Rule of Civil Procedure 309 or nonjudicial foreclosure under the Uniform Declaratory Judgment Act in accordance with the terms and conditions of the deed of trust.

VIII.

Foreclosure of the Lien

24.As provided in Thompson v. Pacific Trust Life Insurance Co. of California, 74 S.W.2d 162 (Tex. App.—El Paso 1934, writ ref’d), plaintiff seeks a final judgment acknowl­edging plaintiff has a credit bid for the judgment amount contained in the judgment and order of sale plus all fees and costs payable to the sheriff, constable, or trustee conducting the fore­closure sale.

25.In addition, plaintiff seeks a judgment acknowledging that plaintiff, its mortgage servicer, or their agents or representatives, may tender a written bid delivered at least three business days before the scheduled sale date to the sheriff, constable, or trustee conducting the sale, and the written credit bid must be accepted by the person conducting the sale as a valid bid for the foreclosure property as long as the credit bid is equal to or less than the judgment amount due plaintiff.

IX.

Attorney’s Fees

26.As a result of the material breach of defendant’s obligation under the loan agree­ment, plaintiff has been required to retain the undersigned legal counsel to institute and prose­cute this action. Pursuant to the terms of the loan agreement, plaintiff is entitled to recover its reasonable attorney’s fees for the services rendered in instituting and prosecuting this action, to include any appeal to a court of appeals or an appeal to the Texas or U.S. Supreme Court.

Prayer

WHEREFORE, PREMISES CONSIDERED, plaintiff requests that defendants each be cited to appear and answer; a personal judgment against the obligor for all unpaid amounts owed to plaintiff as evidenced by the loan agreement to include the unpaid principal, legal interest on the amount due until date of judgment, attorney’s fees, and costs of court and fore­closure; based on plaintiff’s election, final judgment against the obligor and mortgagor for either judicial foreclosure with order of sale or judgment for nonjudicial foreclosure under Uniform Declaratory Judgment Act against the property serving as collateral for defendant’s loan agreement; foreclosure of the vendor’s lien against the encumbered property; legally due interest on the total judgment amount from the date of judgment until paid; all writs and other processes necessary to enforce the judgment; and such other and further relief to which plain­tiff may be entitled.

Respectfully submitted,

   
[Name of attorney]
Attorney for Plaintiff
State Bar No.:
[Email address]
[Address]
[Telephone]
[Telecopier]