In an Opinion issued on February 6, 2023 (Opinion No. KP-0424), Ken Paxton, the Attorney General of Texas, stated that a court would likely conclude that a corporate entity may serve as a trustee or substitute trustee of a security instrument encumbering an interest in real property (i.e., deed of trust) under Texas law.[1] The Opinion was requested to clarify the meaning of “person” under Chapter 51 of the Texas Property Code (relating to liens created against real property and enforcement of deeds of trust). Section 51.001 of the Texas Property Code defines a “Trustee” as “a person or persons authorized to exercise the power of sale under the terms of a security instrument . . .” (Section 51.001(8)) and a “Substitute Trustee” as “a person appointed by the current mortgagee or mortgage servicer under the terms of the security instrument to exercise the power of sale” (Section 51.001(7)).
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