Foreclosure Notice - What is Sufficient?

[Bryan Hancock]

So we had our monthly auction in Texas yesterday and one of the deals we had tied up got auctioned off. Apparently the seller had been served notice at the property he was selling to us instead of his homestead. My coaching client had been to the bank with the seller (local regional bank) and they flat-out told them that they weren't going to foreclose.

We are still sorting out all of the details, but we think that the bank backdated the notice and sent it certified mail a week or so before the auction. The date on the letter was May 10th, which would have been sufficient notice if it was mailed in a timely fashion. The trouble is:

1. It was mailed to the wrong address so he didn't get it until the 28th
2. They listed the county on the notice as Travis County instead of Williamson County
3. The bank told my client verbally they weren't going to foreclose on the property with the seller present so he didn't review the letter thoroughly

We also found out that the note was sold recently to a private lender after we got the title commitment. Apparently the commitment runs 2 weeks behind so this slipped through the cracks. It seems like the hard money lender is trying to get the deed fraudulenty by backdating the date it was sent. The timestamp on the certified letter should be the smoking gun, but our attorney seems to think notice getting filed at the wrong address should be sufficient for us to undo things. The last gasp attempt would be to trump up the fact that the wrong county was on the notice...which we didn't see a copy of until today.

Does anyone have experience with banks doing this sort of thing? The whole thing stinks to high heaven. We think that the bank had a buddy in on the thing with some sort of kickback arrangement. The notice was purposefully mailed to the wrong address 3 times and then to his real address to shorten the window to cure the default OR was backdated to try to meet the 21-day requirement. The trustee also talked to the seller's daughter (he doesn't speak very good english) this morning and she claimes he seemed very nervous...smacks of something fishy.

Thoughts? Our attorney is fighting the thing and there is roughly $100k in red meat in the deal so I hope we can get the thing fixed.