The Houston Court of Appeals in Bauder v. Alegria issued a decision that a text message can be used to establish the last known address of a borrower for the purposes of delivering a foreclosure notice when it is unclear if the address on the deed of trust is the borrower’s last known address.
In the Bauder case, a woman named Sara Alegria purchased a home at 1825 Neuman Street in La Marque, Texas in 2010 from Gerald Bauder. When Alegria signed a promissory note and the deed of trust, she indicated that her mailing address was 704 Roosevelt Street in La Marque. Over time as Alegria made payments to Bauder, sometimes she delivered her mortgage payments to Bauder, other times Bauder’s son (who was authorized to act for Bauder) would come to the property on Neuman Street to pick up the payments, and sometimes Bauder’s son would pick up the payments from the Roosevelt Street address.
In 2013, the loan was in default due to nonpayment of taxes and failure to maintain insurance, and a notice to cure was sent to the Roosevelt address. The notice indicated that a failure to cure would result in an acceleration of the payments due on the promissory note.
Bauder’s son had texted Alegria several times prior to sending the notice to cure, and noted via text that he was aware that she had sold the property on Roosevelt Street and that it was likely no longer Alegria’s mailing address. Bauder’s son also indicated via text message that he assumed that the Neuman Street address was now Alegria’s primary residence. Yet, when it came time to send Alegria a notice of foreclosure, Bauder’s son sent the notice to the Roosevelt address. Alegria filed suit requesting that the foreclosure be set aside since she never received proper notice of the foreclosure sale.
What Does The Law Require When It Comes To Foreclosure Notices?
According to Texas Property Code Section 51.002(b), a notice of foreclosure must be served to the debtor’s last known address via certified mail. A debtor’s last known address is the debtor’s residence address unless the debtor provided the mortgage servicer a written change of address prior to the date on which the mortgage servicer mailed the foreclosure notice, under Texas Property Code Section 51.001(2)(A). The property cannot be sold in a foreclosure sale until the mortgage servicer provides notice of the sale to the debtor at least twenty one days in advance of the sale.
In this case, Bauder’s son knew Alegria’s last known address, because he had exchanged text messages with her. But he sent the notice of foreclosure to the Roosevelt Street address regardless because it was the address listed on the deed of trust. Since the deed was silent as to whether Alegria was required to update her address on the deed of trust if her primary residence changed, the Bauder was required to send notice to Alegria’s last known address, which in this case was the Neuman Street address.
Obviously, the deed of trust should have required the borrower to send a specific written notice to update their address. In addition, a careful lender would have sent notices to all addresses they had for the borrower. From the borrower’s point of view, delivery of a certified mail notice of the correct address would have clarified the situation as well.