Abandoning acceleration? Also abandoning notice.

Originally published by David Coale.

Before a lender may accelerate a debt (and later foreclose), Texas law requires that the lender send (1) notice of intent to accelerate, followed by (2) notice of acceleration. While “Texas courts have not squarely confronted whether a borrower is entitled to a new round of notice when a borrower re-accelerates following an earlier rescission,” the Fifth Circuit concluded “that the Texas Supreme Court would require such notice . . . Abandonment of acceleration ‘restor[es] the contract to its original condition.’ The Texas Supreme Court would likely conclude that Wilmington Trust acted ‘inconsistently’ by rescinding acceleration and then re-accelerating without notice.” Wilmington Trust v. Rob, No. 17-50115 (May 21, 2018).

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