The Bank must determine whether the trustee named in the deed of trust is available to post notice and foreclose on the property. If the trustee is not available, a substitute trustee must be appointed in strict compliance with the terms of the deed of trust and applicable law. See Form of Appointment of Substitute Trustee located at the end of this Chapter.
Many deeds of trust allow for appointment of a substitute trustee at any time by the holder of the indebtedness, without any formality other than a written appointment. Some deeds of trust require the written appointment to be filed in the real property records of the county in which the real property is located. The trustee typically may be removed without cause by and at the will of the holder of the indebtedness. The deed of trust must be consulted to determine the formalities required.
The appointment of a substitute trustee should recite the removal of the trustee and any previously appointed substitute trustees. Only a duly appointed substitute trustee may execute the notice of trustee’s sale. An officer or employee of the Bank or its servicing agent with respect to the loan transaction is often chosen to be the substitute trustee.
Section 51.0076 of the Texas Property Code permits the appointment of a trustee or substitute trustee to be made in an otherwise proper notice of sale. The appointment is effective as of the date of the notice if the notice is signed by an attorney or agent of the mortgagee or mortgage servicer and contains a statement in all capital letters, boldface type, to read as follows:
THIS INSTRUMENT APPOINTS THE SUBSTITUTE TRUSTEE(S)IDENTIFIED TO SELL THE PROPERTY DESCRIBED IN THE SECURITY INSTRUMENT IDENTIFIED IN THIS NOTICE OF SALE THE PERSON SIGNING THIS NOTICE IS THE ATTORNEY OR AUTHORIZED AGENT OF THE MORTGAGEE OR MORTGAGE SERVICER.