Reported / Citable
Background
Daniel D. Batsalkin and his wife, as trustees of a family trust, bought a Southlake, Texas property in 2021 using a $1.4188 million loan secured by a deed of trust. Batsalkin later entered two repayment plans but did not make the required full initial payments, and the court found he had made no further payments since December 2023.
After the servicer issued default and acceleration notices and scheduled a June 2025 foreclosure sale, Batsalkin obtained a state-court temporary restraining order. The defendants removed the case and moved for summary judgment on Batsalkin’s RESPA, contract, and Texas Debt Collection Act claims, as well as their judicial-foreclosure and contract counterclaims.
The Court’s Holding
The court granted summary judgment for the defendants on all of Batsalkin’s claims. His loan was made for investment purposes, the court held, based on his deposition testimony and occupancy affidavit. Because the loan’s original purpose controls, RESPA and the Texas Debt Collection Act did not apply despite Batsalkin and his family later moving into the property.
The court also rejected Batsalkin’s contract claim because he did not perform or tender performance and identified no contractual breach by the defendants. It granted the defendants summary judgment on judicial foreclosure and breach of contract, finding an enforceable debt and lien, default, proper default and acceleration notice, and damages. The court reserved damages pending resolution of five remaining counterclaims.
Key Takeaways
- A mortgage’s original purpose—not a later change in occupancy or use—determines whether it is consumer credit for RESPA purposes.
- An investment-purpose mortgage was not “consumer debt” under the Texas Debt Collection Act on these facts.
- The servicers established the elements for foreclosure, including default and compliance with contractual notice requirements.
Why It Matters
The decision underscores that a borrower’s contemporaneous statements and loan documents concerning investment intent can defeat consumer-protection claims, even when the borrower later occupies the property. It also illustrates the importance of payment history and notice records in obtaining summary judgment on foreclosure-related claims.