NOTICE TO GOVERNING BODY BEFORE FORECLOSURE OR OTHER ACTION.

(a) Unless written notice is given to the governing body of the municipality and to any board of trustees in accordance with this section that there is a default in payment of any installment of principal of or interest on an obligation issued under this subchapter and that payment has been demanded:

(1) a collection fee may not accrue;

(2) a foreclosure proceeding may not be begun in a court or through a trustee; and

(3) an option to mature any part of the obligation because of the default may not be exercised.

(b) A notice under Subsection (a) must be sent by prepaid registered mail to each member of the governing body and each member of any board of trustees, addressed to the member at the post office in the municipality.

(c) An action described by Subsection (a) may not be taken before the 91st day after the date the notice is mailed.

(d) A payment of a delinquent installment of principal and interest that is paid before the expiration of the period prescribed by Subsection (c) and that is accompanied by a payment of interest as prescribed in the contract, at a rate not to exceed 10 percent per year, from the date of default until the date of payment, has the same effect as if paid on the date the installment was originally due.