One thing I don't understand, when a trustee of deed of trust does something wrong, the lender gets sued for that. Is there any special agreement these trustees made that whatever they do, the lenders will bear the consequence?
Sometimes I get confused because I tend to believe that somehow this trustee is a neutral position, but the way lenders get sued for the trustees, it seems to me that Trustees are the representative/nominee of the lenders.
Texas law provides that Trustees are generally not liable for their "good faith errors," and further, Texas Trustees are, by statute, not "held to the obligations of a fiduciary of the mortgagor or mortgagee." See TPC 51.007(f) and 51.0074(b)(2): https://statutes.capitol.texas.gov/Docs/PR/htm/PR.51.htm. And further to your Q, yes -- some Trustees will not foreclose without first obtaining full indemnification from the foreclosing lender in case the Trustee is sued.
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