Legal Blog ("Blawg") on Causes of Action and Affirmative Defenses in Texas -- with Caselaw Snippets from Appellate Opinions, and Occasional Commentary on Decisions
Thursday, April 28, 2011
Elements of Wrongful Foreclosure Tort in Texas (updated)
CAUSE OF ACTION FOR WRONGFUL FORECLOSURE
Elements of Wrongful Foreclosure
The elements of wrongful foreclosure are: (1) a defect in the foreclosure sale proceeding; (2) a grossly inadequate selling price; and (3) a causal connection between the defect and the grossly inadequate selling price. Charter Nat'l Bank-Houston v. Stevens, 781 S.W.2d 368, 371 (Tex.App.-Houston [14th Dist.] 1989, writ denied).
A wrongful foreclosure claim does not always require proof of a grossly inadequate selling price if another substantive injury to the mortgagor exists. Id. Under Texas law, "a deed of trust is a mortgage with a power to sell on default." Starcrest Trust v. Berry, 926 S.W.2d 343, 351 (Tex.App.-Austin 1996, no writ) (internal quotation omitted). Mortgages, and therefore deeds of trust, are construed like contracts. Id. at 351-52. "Further, `[t]he note and deed of trust on . . . property should be construed together and effectively regarded as one instrument.'" Id. (quoting Chapa v. Herbster, 653 S.W.2d 594, 600 (Tex.App.-Tyler 1983, no writ)).
SOURCE: Helms v. Mortgage Electronic Registration Systems, Inc., Dist. Court, SD Texas 2012
The elements for wrongful foreclosure when the plaintiff seeks to set aside the sale are (1) a defect in the foreclosure sale proceedings; (2) a grossly inadequate selling price; and (3) a causal connection between the defect and the grossly inadequate selling price. See Charter Nat’l Bank-Houston v. Stevens, 781 S.W.2d 368, 371 (Tex. App.—Houston [14th Dist.] 1989, writ denied).
SOURCE: Houston Court of Appeals 01-09-00269-CV 4/28/11 (dissenting opinion)
RELATED LEGAL TERMS: Wrongful foreclosure, irregularity in foreclosure sale proceeding, eviction, ownership and right to possession
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