A Texas borrower asks his lender what happens if the property is sold at foreclosure for more than the outstanding debt. Under Texas Property Code, who is entitled to the surplus proceeds?
Correct Answer
B) The borrower is entitled to the surplus proceeds after the debt and costs are satisfied
Under Texas Property Code §51.004, after a foreclosure sale, any surplus proceeds (amount exceeding the outstanding debt, accrued interest, and costs) belong to the borrower. The lender must account for the surplus and make it available to the borrower.
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Related Topics & Key Terms
Key Terms:
Related Concepts
TILA is a federal law that requires lenders to disclose the true cost of credit to borrowers, including the annual percentage rate (APR), total finance charges, and loan terms. It is implemented by Regulation Z.
A trustee sale is a type of foreclosure where a trustee, appointed under a deed of trust, sells the property at auction to satisfy the debt.
Usury is the practice of charging an interest rate that exceeds the maximum rate permitted by state law. Usury laws protect borrowers from excessive interest charges on loans.
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