Most people assume that when a loved one dies and the estate goes through probate, the probate court keeps a watchful hand on the estate’s assets until everything is wrapped up and distributed. That assumption is understandable. In Texas, it is often wrong. The Texas Estates Code creates a powerful and uniquely Texas institution: independent administration. Under it, the probate court largely steps aside and the independent executor takes the wheel without court supervision.
Now picture a surviving spouse who believes she has an interest in her late husband’s home, a home a mortgage company wants to foreclose on. She goes to court to stop the foreclosure. She argues the foreclosure notice was defective and that, as a spouse and heir, she has every right to challenge it. She also argues that because the estate is in probate, the case belongs in state court under something called the “probate exception.” Her arguments seem intuitive. They also failed.
McIntosh v. PHH Mortgage Corporation, Case No. 3:25-CV-1385-K-BK (N.D. Tex. Mar. 8, 2026), takes a close look at two questions that come up regularly in Texas estate administration: whether an independent administration removes estate property from the custody of the probate court for purposes of the federal probate exception, and whether a surviving spouse who did not sign a deed of trust has standing to challenge a foreclosure as a community-property owner or as a devisee. Both answers are worth knowing before you find yourself in this spot.
Facts and Procedural History
The decedent, Gary Little, signed an adjustable-rate note and deed of trust against residential property in Garland, Texas, in May 2022. The deed of trust secured a reverse mortgage loan held by PHH Mortgage Corporation (“PHH”). It identified the borrower as Gary Little, described as “an unmarried man,” and bore only his signature.
Gary Little later died, and his will was admitted to probate. In June 2023, his son, Spencer Little, was appointed independent executor of the estate. Two days after that appointment, the probate court approved the inventory, appraisement, and list of claims filed by the independent administration. Those two events matter more than they might seem, as we will see.
The loan went into default. In March 2025, PHH sent notice that a foreclosure sale was set for May 6, 2025. The next month, Gary Little’s surviving spouse sued in state court to stop the foreclosure. She said PHH’s notice was defective because it went to the property instead of the independent executor, and because it left out the name and address of the trustee or substitute trustee required by the Texas Property Code. She also brought claims under the Texas Debt Collection Practices Act (“TDCA”).
The state court granted a temporary restraining order to stop the imminent sale. PHH then removed the case to federal court based on diversity jurisdiction. The surviving spouse moved to send it back to state court, arguing the federal probate exception stripped the federal court of jurisdiction. PHH moved to dismiss the claims outright. The court recommended denying the motion to remand and granting the motion to dismiss. Here is how it got there.
What Is the Federal Probate Exception?
The federal probate exception is a judge-made rule that limits federal court jurisdiction in cases that touch on state probate proceedings. It goes back more than a century, and it rests on a basic idea about concurrent jurisdiction: when a state court is already exercising authority over a piece of property through a probate proceeding, a federal court should not step in and exercise its own authority over that same property.
The Supreme Court described the scope of the exception in Marshall v. Marshall, 547 U.S. 293 (2006), and made clear it is narrow. Federal courts cannot probate or annul a will, and they cannot administer a decedent’s estate. But they keep jurisdiction over claims that merely touch on probate matters, as long as those claims do not require the federal court to take in rem jurisdiction over property already in the custody of a state probate court.
The Fifth Circuit boils this down to a two-step test. A court asks first whether the disputed property is “within the custody” of the state probate court, and second whether the plaintiff’s claims would require the federal court to take in rem jurisdiction over that property. Curtis v. Brunsting, 704 F.3d 406, 409 (5th Cir. 2013). Only if both answers are yes does the probate exception bar federal jurisdiction. And in Texas, that first question, custody, is more nuanced than it looks.
Why Independent Administration Changes Everything
Texas has two basic forms of estate administration: dependent and independent. The difference is not just paperwork. It decides what the probate court controls, and for how long.
Under dependent administration, the administrator has to get court approval for most significant transactions and has to report to the court regularly. The probate court keeps ongoing supervisory authority over the estate’s assets. In that setting, it makes sense to say estate property stays “within the custody” of the probate court.
Independent administration works the other way. Once an independent executor is appointed, the estate comes out from under the ongoing supervision of the probate court. Section 402.002 of the Texas Estates Code lets independent executors act without court approval. Section 402.001 goes further: once an independent administration has been created and an independent executor appointed, and the inventory has been filed and approved, “further action of any nature may not be had in the probate court” unless the Estates Code specifically and explicitly provides otherwise. In plain terms, the court hands the keys to the executor and gets out of the car.
This is not new law. The Texas Supreme Court said as much back in 1943 in Rowland v. Moore, 174 S.W.2d 248 (Tex. 1943), holding that appointing an independent executor “withdraws the estate from the supervision and control of the probate court,” and that as long as the estate stays in the executor’s hands, the probate court has no jurisdiction to approve a claim against it.
That has a direct effect on the probate exception. If the probate court does not control the estate property, because an independent executor was appointed and the inventory filed, then the property is not “within the custody” of the probate court. And if the first prong of the Curtis test is not met, the probate exception does not apply.
How the Court Ruled on the Remand Argument
The surviving spouse argued that because her late husband’s estate was in probate, the federal court had no jurisdiction under the probate exception and the case should go back to state court. The court rejected that at step one.
The probate court’s order had appointed the son as the “Independent Executor of the Will and Estate” of the decedent. Two days later, the probate court approved the inventory, appraisement, and list of claims. Under Rowland and the Estates Code, those two events, appointment of the independent executor and approval of the inventory, mark the point where the probate court gives up jurisdiction over the estate property.
The surviving spouse did not point to any provision of the Estates Code that would specifically and explicitly let the probate court take control back. She also did not argue that the property had somehow left the executor’s hands. Because the property was not within the custody of the probate court, the first prong of Curtis failed, and the probate exception did not apply. The court found the same conclusion in a recent decision on nearly identical facts, Moreno v. PHH Mortgage Corp., No. 25-CV-658 (W.D. Tex. Oct. 2, 2025), where the court held that once an independent administrator was appointed and the inventory filed, the probate court no longer controlled the property, and the probate exception did not apply. The case stayed in federal court.
Can a Surviving Spouse Challenge the Foreclosure at All?
Even if the surviving spouse had kept the case in state court, she still had to show she had the legal right, or “standing,” to bring her claims. This is where the case gets useful for anyone dealing with an estate that has a mortgage on it.
Under Texas law, the right to enforce a contract belongs to the people who signed it. The general rule, built on contractual privity, is that only the mortgagor or someone in privity with the mortgagor can challenge a foreclosure sale under a deed of trust. Goswami v. Metro. Sav. & Loan Ass’n, 751 S.W.2d 487, 489 (Tex. 1988). The surviving spouse did not sign the note or deed of trust. The deed of trust named the borrower as her husband, described as “an unmarried man,” and carried only his signature. She offered two ways around that. Neither worked.
The community property theory. She first argued that because the property was bought during the marriage, it was presumed community property under Section 3.003 of the Texas Family Code, so the note and deed of trust were community debt, and that shared interest gave her standing. The logic sounds fair on the surface. The community property presumption is a real and well-settled part of Texas marital property law. But the court found no authority using that theory to give a non-signatory spouse standing in the foreclosure context, and the case she leaned on did not help her. She cited Kiper v. BAC Home Loans Servicing, LP (“Kiper I”), 884 F. Supp. 2d 561 (S.D. Tex. 2012), as a case where a husband was allowed to challenge a foreclosure under the community property presumption even though his wife was the sole borrower. It held the opposite. The court there dismissed the husband’s claim for lack of standing because he was not in privity with his wife, the actual borrower. On top of that, the Fifth Circuit has rejected this theory head-on, holding that a spouse who did not sign the loan is not a “debtor” or “borrower” entitled to statutory foreclosure notice. See Cuauhtli v. Chase Home Finance LLC, 252 F. App’x 690 (5th Cir. 2007); Robinson v. Wells Fargo Bank, N.A., 576 F. App’x 358 (5th Cir. 2014).
The devisee theory. She next argued that she held an equitable interest as a devisee under her husband’s will, and that this was enough to give her standing. She pointed to a clause in the deed of trust saying that on the death of the last surviving borrower, the borrower’s successors and assigns would be bound to perform the borrower’s obligations. As the sole devisee, she said, she was a successor bound by the agreement and entitled to its protections, including notice of sale.
The court turned that down for two separate reasons. First, she had not shown she actually stepped into the borrower’s shoes. The property was still in the decedent’s name. The independent executor had not conveyed it to her. Under Texas law, a devisee does get a vested interest at death, but the estate property stays subject to administration. The administrator holds legal title and the superior right to possess and dispose of estate property as needed to pay the estate’s debts. Meekins v. Wisnoski, 404 S.W.3d 690, 698 (Tex. App.—Houston [14th Dist.] 2013, no pet.). So she had not succeeded to the borrower’s obligations.
Second, even if she counted as a successor, neither the deed of trust nor Texas law required notice to her. The deed of trust told the lender to give notice of sale to the “Borrower,” and it defined “Borrower” to exclude the borrower’s successors and assigns. Texas law likewise requires notice only to the parties named on the loan documents as debtors, not to potential heirs or successors. Rodriguez v. Ocwen Loan Servicing, LLC, 306 F. App’x 854, 856 (5th Cir. 2009). Lenders do not have to hunt down and identify potential heirs before a nonjudicial foreclosure. Cole v. Select Portfolio Servicing, Inc., 2020 WL 7658091 (N.D. Tex. Oct. 13, 2020). Other courts have said the same on similar facts. See Cruz v. Compu-Link Corp., 2023 WL 4543584 (S.D. Tex. May 9, 2023) (borrower’s heir living at the property lacked standing to sue on the loan); Oliver v. PennyMac Loan Services, LLC, 2024 WL 1016121 (N.D. Tex. Feb. 21, 2024) (borrower’s heir not entitled to notice and lacking standing to sue for breach). The pattern is consistent: being an heir or devisee of a borrower does not, by itself, give you the right to challenge a nonjudicial foreclosure.
The Takeaway
Two lessons come out of McIntosh. First, the form of estate administration matters a great deal when a probate-related dispute lands in, or gets removed to, federal court. An independent administration takes estate property out of the ongoing custody of the probate court. Once an independent executor is appointed and the inventory is filed and approved, the probate court steps back, and the federal probate exception has nothing to work with because the probate court no longer controls the property. Second, a surviving spouse’s link to a deceased borrower, whether through community property or inheritance, does not by itself give her standing to challenge a nonjudicial foreclosure. In Texas, contractual standing in the foreclosure context runs to the people who signed the loan and those in privity with them. Heirs and devisees who have not assumed the borrower’s obligations, and whose names are not on the loan documents, are in a tough spot when a lender moves to foreclose. If you are inheriting a home with a mortgage on it, the time to sort out title, assumption, and who has the right to deal with the lender is early, not on the eve of a foreclosure sale.
Our Fort Worth Probate Attorneys provide a full range of probate services to our clients, including helping with independent administrations and disputes over estate property facing foreclosure. Probate is what we do. Affordable rates, fixed fees, and payment plans are available. We provide step-by-step instructions, guidance, checklists, and more for completing the probate process.We have years of combined experience we can use to support and guide you with probate and estate matters. Call us today for a FREE attorney consultation.
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