A married couple in Texas purchases a home using a deed of trust as the security instrument. The husband dies unexpectedly, and the wife wants to understand the loan structure. Under Texas deed of trust law, who holds the power of sale if the borrower defaults?
Correct Answer
B) The trustee holds the power of sale and may conduct a non-judicial foreclosure on behalf of the beneficiary
In a Texas deed of trust, the trustee is the neutral third party who holds legal title and has the power of sale. If the borrower (trustor) defaults, the trustee can conduct a non-judicial foreclosure sale on behalf of the lender (beneficiary) under Texas Property Code §51.002.
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- → A Texas property owner defaults on both a first mortgage and a second-lien home equity loan. The first mortgage lender forecloses and sells the property at the trustee's sale. Under Texas law, what happens to the second-lien home equity loan?
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- → In Texas, the standard security instrument for real estate loans is a deed of trust rather than a mortgage. Which parties are involved in a Texas deed of trust?
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Previous Question
A Texas homeowner wants to refinance his existing home equity loan into a conventional rate-and-term refinance. The home equity loan closed 8 months ago. Under Texas Constitution Article XVI, Section 50(f)(2), can he proceed with the refinance now?
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A Texas lender funds a home equity loan where the closing costs total 4.5% of the loan amount. The borrower notices this exceeds the constitutional cap. Under Texas law, what is the consequence of this fee violation?