The notice of sale must be sent by certified mail by the holder of the debt to each person or entity who, according to the records of the holder of the debt, is obligated to pay the debt. This provision is crucial. The Debtors who are obligated to pay the debt include any and all parties who are makers, guarantors of the note, general partners of a general partnership debtor or a limited partnership debtor, venturers of a joint venture debtor, endorsers of the note, and parties who assumed payment of the note. For example, notice must not only be given to the partnership debtor, but also to each individual partner, since each partner is usually jointly and severally liable for payment of the debt. If a note has been assumed, the Bank must give notice to the prior borrower as well as to the assuming party, unless the prior borrower’s obligations were released. The notice to the debtors who are individuals must contain the statutory notice required to be given to persons who may be members of the armed service required by Section 51.002(i) of the Texas Property Code.
The Bank should consider whether to send notice of the sale to any junior lienholders, owners of the property, or anyone else that the Bank knows has an interest in the property. The statute does not require that notice be given to these parties, unless they are also the debtors obligated on the note held by the Bank. The advantage to giving notice to junior lienholders is that they may choose to assist the debtor in bringing the debt current or contribute to a settlement of the matter, in order to avoid the extinguishment of their lien. The disadvantage in sending notice to parties other than the debtors is that other parties may attempt to enjoin, invalidate or disrupt the sale.
Service of notice by certified mail is complete when the notice is deposited in the United States mail, postage prepaid and addressed to the debtor at the debtor’s last known address, as shown by the records of the holder of the debt. Sometimes the deed of trust will mandate that notice additionally be given to the debtor at the property address or at some other address. Absent countervailing considerations, it is preferable to give notice to the debtors at several addresses rather than to risk not having given adequate notice under the terms of the deed of trust. In any event, the Bank should carefully check its records to determine each debtor’s last known address. The Bank, however, is not required to conduct a search for the debtor in the telephone book or hire a firm to trace the debtor’s location. the Bank must only review its own records.