Court Opinion

ID: 4130271
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:02:20.909674+00
Date Added: 2024-06-11T14:37:36.801088
License: Public Domain

Ms. Tish Gonzalez                Opinion No. JM-1198
Acting Executive
  Administrator                  Re: Authority of the Texas
Texas Housing Agency             Housing Agency to take and
P. 0. Box 13941                  hold title to foreclosed
Austin, Texas 78711-3941         properties in its own name,
                                 and related questions
                                 (RQ-1897)

Dear Ms. Gonzalez:

     You have requested that we address several questions
about the "single family mortgage revenue bond programs" of
the Texas Housing Agency. Your first question is:

        Does Sec. 8(a)(5) [of the the Texas Housing
        Agency Act, article 12691-6, V.T.C.S.] permit
        [the agency] to take and hold title to fore-
        closed properties in its own name?

     The Texas Housing Agency is authorized to make mortgage
loans to private entities to help finance low and moderate
income housing developments, and to issue revenue bonds to
finance mortgage loans.   V.T.C.S. art. 12691-6, §§ 9, 10.
You describe   the single family mortgage     revenue   bond
programs as follows:

        These programs typically have the following
        structure:   After   obtaining approval     to
        proceed with the program and to issue bonds
        to finance the program, the Texas Housing
        Agency (‘THAI) locates mortgage companies   to
        originate mortgages to qualified buyers    and
        to service these mortgages after origination.
        Such mortgage companies are called  'Lenders'
        or 'Participants.'  THA then issues bonds to
        finance the program. The money paid for the
        bonds goes to a trust fund which THA sets up,
        supervised by a bank on behalf of THA     (the
        'Trustee'). As the Lenders originate mort-
        gages, they sell these mortgages      to the
        Trustee, who buys them with the bond proceeds
        on behalf of THA. It is currently the policy
        of the Trustee to acquire the Notes and Deeds

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Ms. Tish Gonzalez - Page 2   (JM-1198)

        of Trust which constitute   the mortgages  in
        the trust's name on behalf of THA.   Further,
        when a mortgage goes into default and the
        financed real estate is foreclosed upon,   it
        is presently   the policy of the Trustee to
        acquire the property in the Trustee's name on
        behalf of THA.

Section S(5) of article  12691-6, V.T.C.S., states that   the
Texas Housing Agency has the power

       to acquire, own, rent, lease, hold, or dis-
       'pose of any real, personal, or mixed pro-
       perty, or any interest therein, in performing
       its duties and exercising   its powers under
       this Act, by     purchase,  exchange,   gift,
       assignment,  transfer,   foreclosure,   sale,
       lease, or otherwise,    including rights or
       easements and to hold, manage, operate,    or
       improve real, personal, or mixed property.

Section S(6) of the statute authorizes the agency to "sell,
assign, lease, encumber, mortgage, or otherwise dispose Of"
property "owned by it," and to "release or relinquish   any
right, title, claim, lien, interest, easement, or demand,
however acguired.11  We think those provisions   make clear
that the Texas Housing Agency Act may hold title to the
properties in question in its own name.

     You next ask about the pro riety of a bank holding
property *on behalf of" the THA. P From our examination    of
the instruments you provided, it appears that the bank acts
both as a trustee for the bondholders and as agent for the
Texas Housing Agency    in its dealings with the mortgage
companies.   When an agent takes title to property "on behalf
of" the principal in the name of the agent, the agent holds
the property   in trust for the benefit of the principal.
See State v. Eaaerman,   16 S.W. 1067   (Tex. 1891) (defining
~~behalf~~);see also Thomnson v. Schmitt, 274 S.W. 554  (Tex.
1925) (party may be an agent even if called a "trustee").
Thus, we think the legal relationship of the Texas Housing
Agency to the property is the same when title to property is
taken in the name of the bank acting on behalf of the agency
as when the agency takes title in its own name.

     1. Your specific question is whether various documents
require that the Texas Housing Agency take and hold title to
foreclosed property 'in its own name.   We do not interpret
such documents in the opinion process.

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Ms. Tish Gonzalez - Page 3     (JM-1198)

     Your third question is:

        Does Sec. 16 of Article 1269L-6 give the THA
        the right at its option, ~g$ to pay any taxes
        on real or personal property acquired through
        foreclosure or sale under a Deed of Trust or
        otherwise either by THA or by trustees who
        acquire the properties only on behalf of THA?

Section 16 of the Texas Housing Agency Act provides:

        The property of the agency, its income, and
        operations are exempt from all taxes and
        assessments imposed by the state and all
        public agencies on property acquired or used
        by the agency under the provisions of this
        Act.   The agency may, under its       terms,
        conditions,  and rules, make payments      to
        public agencies in lieu of ad valorem   taxes
        on any property which the agency has acquired
        through foreclosure or sale under a deed of
        trust. It shall be the policy of the agency
        to make these payments    in lieu of taxes
        whenever practicable with any money  lawfully
        available for this purpose,   subject to the
        provisions, requirements, and restrictions of
        any bond resolution.

That provision makes the property of the agency, its income,
and its operations exempt from taxes and assessments imposed
by state or local taxing authorities.     Property held on
behalf of the agency by agents for the Texas Housing Agency
would be property of the agency within the meaning of the
statute.

    Next, you ask:

      Assuming THA and Trustees acting on behalf of
      [the agency] may refuse to pay such taxes, may
      they refuse to pay the taxes even on pro-
      perties held by the original buyer on January
      1st of the given year and/or for some portion
      of the year in which foreclosure occurred?

Section 32.07 of the Tax Code provides that property   taxes
are the personal   obligation  of the person who owns or
acquires the property on January  1st of the year for which
the tax is imposed. But see Tax Code §§ 25.13, 32.07(b). A
lien to secure payment of the taxes attaches to the property
on January 1st of the year for which the tax is imposed.
Tex. Const. art. VIII, 5 15; Tax Code 5 32.01. The lien is
not extinguished   by the subsequent acquisition     of the

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Ms. Tish Gonzalez - Page 4    (JM-1198)

                                                                 I

property by a governmental body in whose hands it is exempt
from taxes, but enforcement      of the lien is suspended.
Childress Countv v. Stat,=, 92 S.W.2d 1011       (Tex. 1936):
Maverick Co ntv W ter     ntrol    Imurovement Dist. No. 1
&&.&    456 z.W.2da204 'TTex. Cit. App. - San Antonio    197;;
writ ref*d); State v. Bexar-Medina-Atascosa Counties Water
Imnrovement Dist.     310 S.W.2d 641 (Tex. Civ. App. - San
Antonio 1958, wri; ref'd); Attorney General Opinion JM-1085
(1989) . If the property is acquired by someone in whose
hands it is not exempt, the lien can then be enforced.
Childress Countv v. State, sunra.

     You also ask whether the agency could use various funds
to pay taxes: since the agency is not liable for taxes on
property it owns, we need not reach those questions.

                       SUMMARY

           The Texas Housing Agency may hold title to
        foreclosed properties in its own name or in
        the name of an agent acting on its behalf.
        Such property is exempt from state and local
        taxes. The agency is not liable for taxes
        that accrued against property before the
        agency acquired ownership   of it, but the
        property remains subject to a lien for the
        unpaid taxes.                .

                                   JIM     MATTOX
                                   Attorney General of Texas

MARY KELLER
First Assistant Attorney General

LOU MCCRBARY
Executive Assistant Attorney General

JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney General

RENEA HICKS
Special Assistant Attorney General

RICK GILPIN
Chairman, opinion Committee

Prepared by Sarah Woelk
Assistant Attorney General

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