A Texas lender forecloses on a property and the foreclosure sale price is $50,000 less than the outstanding loan balance. The lender sues the borrower for the $50,000 deficiency. Under Texas Property Code §51.003, what defense does the borrower have?
Correct Answer
D) The borrower can argue that the foreclosure sale price was not the property's fair market value, and the court must credit the fair market value against the debt
Under Texas Property Code §51.003, in a deficiency action, the borrower can assert that the foreclosure sale price was less than the property's fair market value. If the court finds the fair market value exceeded the sale price, the court will credit the fair market value (not the sale price) against the outstanding debt, potentially reducing or eliminating the deficiency.
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