Texas Disaster Legal Help goes into depth regarding the COVID-19 forbearance protections against foreclosure and what homeowners are facing after they expire.
Guest Speakers Lauren Masullo and Molly Rogers from the Foreclosure Unites at Lone Star and Texas Rio Grande legal aids.
Visit our website at https://texasdisasterlegalhelp.org/
Music Credit:
Track: Travel With Us — Vendredi [Audio Library Release]
Music provided by Audio Library Plus
Watch: https://youtu.be/o-rpKzt4KSY Free Download / Stream: https://alplus.io/travel-us
Texas Disaster Legal Help goes into depth regarding the COVID-19 forbearance protections against foreclosure and what homeowners are facing after they expire.
Guest Speakers Lauren Masullo and Molly Rogers from the Foreclosure Unites at Lone Star and Texas Rio Grande legal aids.
Visit our website at https://texasdisasterlegalhelp.org/
Music Credit:
Track: Travel With Us — Vendredi [Audio Library Release]
Music provided by Audio Library Plus
Watch: https://youtu.be/o-rpKzt4KSY Free Download / Stream: https://alplus.io/travel-us
Avoiding Foreclosure After a Disaster
Speakers
Molly Rogers (Texas RioGrande Legal Aid)
Lauren Masullo (Lone Star Legal Aid)
(Recorded Oct 16, 2020 )
well hello there uh this is pablo
almaguer i am the director of private
bar and government relations for texas
rio grande legal aid and like i said
before
if the title indicated my salary then i should
actually making a lot more money than i
am right now but i'm not i'm actually a
22-year attorney at legal aid
and i'm joined here by a couple of other
co-hosts of this
podcast stuart campbell from legal aid
of northwest texas and belinda
martinez from lone star legal aid
and they'll be introducing our speakers
in a few minutes uh talking about
foreclosures
uh i want to tell you a little bit about
this podcast in the series as you all
know it's part
of a project for disaster assistance
relief
recruitment efforts and also just
training and resources
you can go to the website at
texasdisasterlegalhelp.simplejustice.org
to learn more about those resources and
find more about these
podcasts and the series uh let me
mention it again
texas disasterlegalhelp.simplejustice.org
to look for that and you'll find of
course podcast resources and other
information that will be valuable for you
so this project and what it is uh we are
Coordinated project between legal aid of
northwest texas lone star legal aid and
Trla texas riogrande legal aid
were aimed at improving access to
justice for those affected by disasters
our project allows both disaster
survivors and pro bono attorneys to
access critical resources in one place
while at the same time making it easier
to connect disaster survivors needing
legal help with volunteer attorneys
willing to provide it
in this way the project team hopes to
increase the number of disaster survivor
clients
who receive high quality legal
assistance as they continue to navigate
the recovery process
after a disaster and provide the support
mentorship pro bono attorneys need to
achieve success
so now that we've gotten that out of the
way let me go ahead and go right into
the meat of the matter and introduce
belinda martinez who's going to talk
about our two speakers today
thank you pablo uh today's
episode focus
focuses on avoiding foreclosure after
disaster uh with us today is lauren
masullo and molly rogers
lauren attained a bs in sociology from
texas a m university in two thousand and three
and then went on to work in a variety of
case management roles in the non-profit
sector for nearly a decade
she decided to go back to law school
when lsla helped one of her formerly
homeless clients from being wrongfully
evicted from
his new apartment in two thousand and sixteen she
obtained a jd from the university of
houston law center
and lauren has worked as an attorney for
lsla
since . from july of
through july of lauren was a fellow
in the disaster recovery legal corps
working in lsla's foreclosure prevention
unit she's remained as a staff attorney
in the fpp since the end of her
fellowship
with us as well is molly rogers she's a
staff attorney and team manager for the
home
foreclosure prevention team at texas rio
grande legal aid in austin texas
before practicing law in austin she
earned her ba in english from the
university of texas at austin
and jd from fortham school of law in
new york thank you guys so much for
being here
all right all right let's get to the
heart of the matter with the first question
probably the most important topic going
around
right now the cares act protections for
our listeners out there the federal
cares act prohibits lenders and
servicers from beginning a judicial or
non-judicial foreclosure or finalizing a
foreclosure judgment or sale
this protection began on march eighteenth and
is supposed to extend through at least
december 31st 2020 .
so big question molly lauren what's
going to happen
after december 31st yeah i mean
anything could happen because the
moratorium has already been extended
twice it was originally a sixty-day
moratorium and then it got extended to
the end of the summer
and now through the end of the year so
um fingers
crossed that the agencies will continue
to extend this moratorium
but if they don't there are some other
really helpful protections
um that attorneys should also know about
what's going on with the
lenders do they already
have something in place or is it do the
homeowner have an
option of choosing what happens after
the date
so um right now there are some
protections in place but it's really
important to know what kind of loan your
borrower has
because the protections vary based on
who
owns that mortgage so if it's a seller
finance
transaction or a really small lender
there may be no protections because at
the state level
the state of texas has not put into
place a moratorium or imposed any kind
of obligation
on on those very very small lenders
and when you get into some of the bigger
lenders what you want to look at
is whether that person would qualify
under the cares act
because if they do there are some really
great protections
that are available and even those loans
that don't necessarily qualify under the
cares act
some of those private lenders are still
offering some of the same protection
so you want to know kind of generally
what those
possibilities are and make sure that
your borrower is asking
for those options and if they're getting
pushed back from their mortgage company
or their mortgage servicer
knowing when to escalate the issue is
kind of where an attorney
can get involved and really do some
important advocacy
for a homeowner um so some of the
options
that are out there that the big one to
know about is
the the ability to do a forbearance and
so that is for all
fha loans all usda loans va loans
fannie mae freddie mac any of those
loans you should make sure that your
clients know about the
the ability to do a forbearance they're
entitled to a one-time
six-month forbearance and that can be
extended
once for an additional six months but
the person has to ask for it it's not
automatic and in my experience most
people that ask for the forbearance
are getting it
the main issue is that they can't get
through to their servicer by phone
because they're so backed up there are
so many people calling
and so letting them know about other
ways to ask for that forbearance whether
it's over email
or helping them find the right phone
number so that they're not just calling
maybe the main line but maybe there's
been a specific line set up by the
servicer
for those requests
i was also going to say you know this is
specific to covid
but for disasters in general
forbearances have been around
you know as long as i've been practicing
for years and for a long long time
before that
um so even you know for other other
types of disasters natural disasters and
things
um advocates should still be talking to
their clients about forbearance and
making sure to ask for that
one of the biggest things under the
cares act is that when the forbearance
period is over there are some pretty
good options
for how to get the loan back into
current status whereas typically
um i really want to counsel clients on
the front end about asking for a
forbearance because
with other natural disasters and with
other other things that have thrown
people off of their regular payment
schedules
at the end of the forbearance period the
person has to pay
everything that has become due i mean
not late charges because those come off
as a result of the forbearance but
everything that that would have
accumulated if they had been paying on
time becomes due in the lump sum
and so that is something that you want
to investigate if their hardship isn't
Covid related is this really the
best option for the person or can they
figure out a way
to bag the steal or borrow and pay so
that they don't get hit with this
huge um payment at the end of the
forbearance period
so that was going to be my my follow-up
question was
you kind of answered it before i got to
it but what's like the legal effect
of one of our clients or applicants
someone in our
in our client base of exercising their
right to
their their ability to to take a
forbearance on their mortgage
under the cares act you kind of just
explained it but how does it differ than
a normal forbearance and a non-disaster
sign
yeah and for one it's a longer period so
it's
it's six months and then there's an
additional extension for six months up
to an entire year
so um typically the forbearance period
would be three months or
maybe up to six months but a one-year
forbearance is
is pretty generous in terms of what
we've seen in the past from
mortgage servicers and there's also some
some protections in terms of
um credit reporting so borrowers that
were current
before the forbearance period started
lenders are not supposed to
do any kind of negative credit reporting
on there
and there are some really helpful
protections that way i want to plug
the national consumer law center they
have some really really helpful
advice that breaks down into the minutia
what all of the rights are under the
covid
forbearance programs for each of the
different types of programs
and i think that information is going to
be posted on the website
where the podcast is available
um and
that that nclc publication and some of
the links in it
are gonna require a subscription but as
always if people need additional
information they should feel free
to follow up with myself or lauren um
the legal aid programs because we all
are interested in helping these clients
and making sure that they get the right
information
so if it gets into the weeds and it's
difficult to understand we're always
happy to
to pick up the phone and talk to
somebody
and i actually did have a question you
mentioned
that the homeowner was just going to
have to pay a lump sum at the end of the
forbearance
is that how all the lenders are doing it
or can they maybe do a modification of
the loan or set up a payment plan
yeah again so this is going to get into
what type of loan it is whether it's
covered under the cares act
is the hardship something related to
covid or is this
a different kind of disaster so the
first thing that you want to look at is
what kind of loan
is it it can be hard to tell if
something is owned by
freddie mac or fannie mae but there is
an online lookup tool
if you have the address the social
security number and some basic
information about the borrower
and you have their consent to look it up
and there's a website where you plug in
that information and it will tell you
is the loan owned by um freddie mac or
fannie mae
um and if it's owned by fha usda or va
you'll be able to tell that just by
looking at the mortgage contract so
usually that document is the deed of
trust
and you'll see an fha number on it or
you will say
see a va rider at the end of it um
something that's going to tell you that
that is a loan that's going to be
covered
by the cares act and so if this is a
loan covered by the cares act most of
these programs
have set up um a deferred payment
uh program and it mirrors what
traditionally was used by the fha and
called a partial claim
and that's basically an interest-free
loan that is the exact
amount of the accumulated payments
that just goes all the way to the back
of the loan and it
doesn't accumulate any interest and it
doesn't have to be repaid until the
homeowner either sells the house
refinances or um or the loan matures by
its own terms so after years
if they are still in the home and they
haven't refinanced they would have to
pay that lump sum
at that time but in theory if that's
years away
you can put aside a month or whatever
it's going to take
to make sure at the end of the loan you
have that that balloon payment saved up
not
um and not sooner um there are other
options as well
and you mentioned a loan modification so
that's obviously something
um but a person can apply for there is
obviously there's documentation so
that's another area where an advocate
can get involved
helping the individual prepare
that application and get together the
financial information that's going to be
required to qualify for that loan
modification
communicating with the lender repayment
plans um all of that are options
that should be on the table
and if um if the lender is not providing
a person
with information about those options or
not telling them what they've been
reviewed for not telling them if their
application is complete those are all
places where an advocate
can get involved and help escalate that
issue take it to a supervisor
take it to the right people um lauren
did you want to
add something about the the process for
requests for information and notices of
error
great thank you yes i was i was thinking
of interjecting after you were done so
thank you for all the great information
one tool that advocates might consider
using
in the at this stage one to find out
what kind of loan they their potential
client even
has if they can't find out for some
particular reason using all the tools
already discussed
finding out what their options are in
terms of
are they entitled to a forbearance do
they want to inform the lender that yes
i want a forbearance all of those things
have the right to send a request for
information letter
to the servicer under the real estate
settlement procedures act
and you also have the right to notify
them of an error
and it may sound like a complex process
but it essentially boils down to writing
a letter
and the consumer finance protection
bureau also has some great detailed
information
and templates and you send this letter
to your servicer to a specific address
that it designates you have to use the
address that's
identified as its request for
information or notice of
error address sometimes you hear it
called a qwr qualified written request
address because that was the
former term and they have to get back
with you they have to let you know that
they've received it and they have to
respond to you in days and
give you the information you need and
so that's another tool that you might
want to use and you can use that to
dispute problems too
have we seen so molly said earlier that
a lot of consumers a lot of i mean we
call them consumers
i mean they're people who have homes um
are having trouble contacting their
servicers their mortgage servicers
do you have you seen when it comes to
requesting information from them using
the procedure you just laid out
have we seen or do we predict that
they're going to be
basically bogged down by the amount of
information that's being requested
or and not being able to reply within
the the allotted legal amount of time
like has that been something that you've
noticed or is that something i'm just
imagining
well yes there's definitely
the possibility of delays um for sure
looks like molly had a comment well i
was going to note that
so the initial period for them to
respond is days they can extend that
for another days it's actually
business days and business days so
they really do
get a long period of time to respond but
the great thing is
is if they if they don't get you some
kind of substantive response either
resolving the error
or telling you that they investigated it
and here's why they don't think there's
an
error or giving you all of the
information that you're entitled to you
do have a cause of action and you can
get attorney's fees
under that cause of action um there's
also a possibility of statutory damages
it's a high
bar so you have to show that there's a
pattern in practice and that usually
takes four to five letters so if you're
waiting
business days in between each letter
uh you are talking about a pretty long
period of time but i
i have taken that process through with
clients where we sent
out the fourth letter and we were
getting ready to file the lawsuit and we
finally got
the resolution that we were looking for
so it's not a perfect process especially
when someone
has a time crunch and but sometimes what
i will do is i will
call and try and work with the servicer
and get information
you know to the best of my ability as
quickly as possible but at the same time
i'm sending out those letters
so that i'm setting up that claim and if
it comes down to it then yes we would be
ready
you know to act on that if necessary
you know this is kind of news to me
Because I don’t do this kind of area
of the law so i'm just wondering for my
own purposes so if you do it like a
pro bono attorney gets this case and
wants to know why how would a
reputable you know i guess a large
finance or mortgage company end up
making such mistakes
is it note being sold somehow or
something happened along the way what's
your experience
why would they miss things up so and
attorney can look for those issues
well there's not a lot of ….their argument
is that there's not a lot of money in
servicing and so they are these
high-volume operations
that are run ultimately by humans
mistakes get made
and if it doesn't fit into that sort of
perfect
category of you know we expect this to
happen and then this person
does this and then that person does that
there are areas where things can fall
through the cracks so maybe
um they're paying out the taxes but
they're paying them on the wrong tax
account you know maybe there's two
people with a similar name
or something like that when these
problems happen it can be
really excruciatingly difficult to get
the problem to a person who actually has
the authority
to review it and resolve it and and
again that is that is where the advocacy
comes in is knowing
what words to say and who to get the
problem to
so that you can actually get a
resolution because a lot of times the
frontline person that you're talking to
you know is someone who's making you
know an hourly wage
they get paid to get off the phone as
quickly as possible if you've ever
called at &t and tried to get something
resolved this is
exactly the same equally frustrating um
except your house is on the line
uh which is terrifying and so um
you know that's that is really why it
helps to have an attorney in your corner
feeling like you're not alone going
through this
i think we'd like to refer to fema for
any phone calls
that's fair yes so it's in the theme of
The agencies
so we already asked you to predict the
future and i know that's an impossible
task
but uh we're on
well before covid started we were on
about an eight and a half
year boom in the housing market i
wouldn't say boom recovery
and then kind of transformed into a boom
right um
and we're at the higher end of the
market and then
what we saw in or because of the
great recession like something like
three million foreclosures in the united
states
and i was just looking at some articles
online
um predictions from i guess a data
company
called atom um looks like a consulting
firm
producing predicting something like
to thousand
foreclosures in texas in the first
quarter or in the first two quarters
um if there's not something that happens
in congress uh
i don't know i guess i basically want
your reaction to that where can pro bono
attorneys step up and and help where can
legal aid attorneys
make the the highest the biggest impact
to try to deal with this
wave that we predict is going to come if
if nothing
happens in the next um i guess uh next
couple months
in congress well you know foreclosures
in texas
can happen in a couple of different ways
it can happen non-judicially for some
kind of loans
and judicially for other kinds of loans
and then there's this sort of in the
middle
quasi-judicial process and for those
loans that are going to have that are
going to touch the court system
in some way whether that's a tax
foreclosure or whether it's a
reverse mortgage and i think anytime
that that foreclosure is touching the
court system there's an opportunity
for attorneys to get involved i also
think you're going to see
a huge uptick in bankruptcy filings
because that is obviously a way that
some people can resolve those mortgage
delinquencies if they are back to work
and they've got steady income again it's
it's much more difficult
with these loans that have non-judicial
foreclosure because the process is so
fast and so that's going to be
your purchase money loans uh a non-cash
out refinance
um all of these loans like i said if you
are talking about the bigger
federally related lenders there is
supposed to be this loss mitigation
process there is supposed to be this
days
from delinquency that the borrower has
to work something out
and but once that foreclosure moratorium
ends i think we are really going to be
um
really really looking at a lot of
um people in dire straits for the first
time
in their life um and i think that there
is going to be a huge
need and a huge opportunity for
attorneys to get involved
lauren what's what's your reaction i'd
like to get your your reaction to that
um if if there's something if there's a
specific way
a specific um
i don't know aspect of foreclosure
prevention that a pro bono attorney
maybe who
doesn't have experience in in in the
litigation aspect might be able to help
something that i mean to give you some
context
right uh one of the one of the examples
i bring up is we have a pool of
eviction defense attorneys um at
lanwt as you guys do at
all your organizations and we've set up
about
about volunteer attorneys from these
big corporate law firms who will come
and do eviction defense
those are pretty like like open shut
cases for the most part two weeks in
two weeks out uh is there
is is there something like that in the
foreclosure realm where someone or a pro
attorney who maybe wants to volunteer
but can't commit to doing a
uh wrongful foreclosure suit is there
something like that that they can step
in and maybe kind of rescue someone from
the paperwork or
help them guide guide them through some
of the weeds
absolutely you took the word out of my
mouth which was paperwork um
there are so many different
opportunities for
attorneys to advocate for clients
just dealing with as molly mentioned
calling
any vendor and trying to get your own
problems done you don't think about the
skill set that you're
fortunate to have to be able to
articulate your needs
read and interpret applications that
your
vendor might send you asking for
information those kind that skill set
that you can just apply to helping walk
someone through how to request a
forbearance
walk someone through reading over the
loan mod application packet those things
may not look intimidating to us
but they're huge and they ask for a lot
of documents and you got a sign in a lot
of different places
and it's just so helpful for these
people who've dealt with some kind of
trauma whether it be covid of course
but whether it be a hurricane a flood
whatever there's kind of this framework
where they may be needing to ask for a
forbearance they may be needing to ask
for a modification
that you may not be able to take their
lawsuit but maybe you can look at the
paperwork and at least explain to them
what's going on
so there's so many ways that just those
communication
skills can can really help
this is interesting information you've
given lauren you know and um
we're actually i mean a pretty a few
minutes into it and we're just talking
about forbearance right now in other
matters let me tell you somebody who
refinanced my house recently i'm not
afraid to tell you all that that you
know it was a good rate
uh it was a lot of work in front of two
attorneys and my wife and i was like
let's send a lot of things i just
imagine a client
when they have to deal with all these
matters all the promises and everything
else is going on
the assistance of a pro bono attorney
must be just a peace of mind to know at
least this one aspect of my life is
being taken care of
and i can also say that a lot of our
clients have financial situations that
are not
straightforward in the way that banks
think they should be so they may be
requiring something like
you know two months of pay stubs well
your client
may receive public benefits and so
they're going to need to provide
a public benefit statement from the last
days or
they may operate you know a small
business out of their homes
they're going to have to have to provide
accounting documents that they
they may not keep you know records that
they made you know there may be titled
and they've never even heard of this
but it might be something that is pretty
simple and straightforward for you to
help them prepare
just so that they can check off that box
and show that they have
have done it even if it's you know them
writing down what their
businesses you know expenses are an
income is
um on a monthly basis just having that
written out they may not understand how
to do that
um and like lauren was saying that that
kind of language and that kind of
capacity is something that kind of comes
secondhand as an attorney but that's not
necessarily a skill set that everybody
has
pablo
letting out trade secrets
for any non-attorneys out there it's
like it's mostly paperwork and phone
calls it's not like tv sorry
yeah as much as i want to yell objection
at a at a loan document i can't
i try i still do it in anger but it
doesn't do anything
no now we have homeschooling my kids can
ask me what do you do at work like you
see me i just sit in front of a computer
that's what i do %
of the time this is work you call people
let's
go ahead and get into our next topic
that i wanted to touch on this podcast
everyone's favorite property taxes
well to access recovery funds after a
hurricane or other disaster at the state
and local
level a homeowner has to be current on
the property taxes
so uh anyone want to take the question
what should an attorney do
if they're assisting them with a matter
and find out they have a
huge arrears balance at the county
office or just
already in a property tax suit which
i've had clients
that that's happened to i'm working on
one issue find out they have a tax suit
so
just what's the first thing to do when
you find that
wow boy so many of our clients have tax
issues many of them know it and many of
them
don't know it yet and you get to tell
them um
but if you're helping someone try to
apply for home repair program
they may either need to be current or at
least on a payment plan
and so one of the things you'll be going
through is determining
one are they identified as the homestead
owner of the property for which they're
trying to obtain
repair assistance for two do they have
the proper
exemptions and three if if they don't
why and what can you do to fix it
and going back to stuarts point
there's a lot of this work that has
nothing to do with the courtroom there's
there's a lot of transactional work
where it's helping people fill out
papers with the tax office helping
people fill out forms
um doing affidavits of heirship
or based on some new laws in you
may even be able to dispense with those
so the first thing you want to do is
figure out what exemptions if any
they have and whether they have
proven ownership for the taxing entities
purposes
in order to do that you'll want to see
what does the tax entity think taxing
authority
who do they think owns the property
who's listed on those those tax rolls as
the owner
well just for attorneys out there that
are thinking about volunteering
how hard is it just to maybe arrange a
payment plan or get them out of that tax
suit
um it can be really not not too
difficult at all
so let's look at the different options
one is that
they're set up in tax records as the
owner of the property
and they just need some help filling out
the right paperwork to declare that
they're the homestead owner
and that they're entitled to that
exemption
if they're elderly or disabled if so as
well
and help them figure figure out how to
fill out the forms and find out if
they're
entitled to a payment plan they're
probably going to be offered a year and
they can actually ask for up to
months so that might be something that
a an attorney or advocate can help them
get maximizing their payment plan time
the next step um would be if maybe the
taxing authority doesn't have them
listed as the owner so what needs to be
done to resolve that are they an
heir and maybe it was grandma's property
who gave it to mom
and nobody ever cleared up the title
with the new tax laws for if
they're an
heir owner there's just some basic
paperwork you fill out your typical
homestead exemption application
and you have to have like a death
certificate and a utility bill
and proof if there was another lawsuit
associated with the property
some additional supporting things you
turn that in and you could potentially
get them recognized as the owner and
then they can get their homestead
exemptions and so forth um
if if they're not an heir owner there may
be some other options you can work on
and then the key that's helping lower
the the taxes and then deferrals is the
next thing so
molly had comments i was just going to
piggyback on that but some of our
clients
also have manufactured homes and they
don't necessarily have
the the recorded title for that because
these things just get
transferred around and they don't always
follow um
the the state agency requirements for
getting that good clear title but
there's also an affidavit that they can
sign i think it is just part of the
exemption form isn't it
um declaring you know a sworn affidavit
testimony that they're the owner of the
manufactured home and then they can get
those
exemptions on that property as well yes
we actually did a recording last weekend
right now we're in the middle of october
and i mentioned dina a couple of times
it was dina who did a title clearing
cle so if you're listening to this look
for that cle i mean that podcast it
talks about
those title clearing issues
yeah i just wanted to
clarify if you hadn't figured it out
alright
all these are canned forms right so your
local
cad uh county appraisal district should
may have their own
forms with their contact information
already but if not the state comptroller
has
a plethora of forms the appropriate
affidavits are available as well
as well and then in our office we've
taken the same content and reformatted
anything that's an affidavit as
a declaration under penalty of perjury
which is allowed under the cprc because
this is all coming out of the tax code
so it's another
state law and our local cads taking that
too
so it's all you know paperwork that's
available you don't have to try and
pre-draft something
okay lauren you mentioned exemption and
deferrals what's the difference between
the two
so the exemption is where you're able to
essentially have your property taxed at
a lower
value so that your taxes decrease
the deferral is where if you're elderly
or
age or older or disabled or a
qualifying disabled veteran
you can put off your taxes so the taxes
you're still
taxed they still accrue you still have
to pay them eventually or they're the
obligation of your estate
but that's what can stop the foreclosure
so if you qualify for a deferral
that you have the absolute right to stop
foreclosure
in terms of abating a lawsuit in terms
of abating the sale
up to the last virtually the last minute
and
preventing yourself from getting
entangled in a tax lawsuit
in the first place and you're free to
pay off the taxes
at the rate at which you can but you're
not tied to either signing up for a
Short term
relatively short-term payment plan
you can just pay it when you can
can you retroactively get a
deferral
or is it just like for that year you're
in
so taxing the amount that you're taxed
and then the deferral are kind of
two different concepts in terms of
retroactive you're looking at
what were you taxed and can they
recalculate your taxes
retroactively up to two years or even
five under certain motions and lower
your rate
the deferral is kind of instant right if
as soon as you qualify and you've
submitted the paperwork at that point
you qualify for your deferral
moving forward and then you can with the
deferral
you even get some some benefit because
your
your interest rate goes down so instead
of being a interest rate you're
paying a five
we're not paying but you're accruing a
five percent interest rate
um and no penalty versus but like you
said
everything that accrued prior to getting
that that deferral
is what it is unless you also qualify
for an exemption that you didn't
previously receive and that can be
applied
retroactively right
right and so lauren all this discussion
and
negotiation is that with the authority
or actually you're actually dealing with
the attorneys for
the taxing authority
well initially if it hasn't gotten to
the point where they've turned it over
to collections then you're dealing with
the taxing authority and their staff
directly
if they've already turned it over to
their taxing
collection agents then they may have an
attorney if
trying to talk to you about getting
helping the client get a payment plan
and of course if you're in a lawsuit
then you're at the point of
conversing with the attorneys i'm just
wondering if it's helpful to maybe
when you can't work with the authority
for whatever reason like in some
counties to you then you have
to look for if you got a working
relationship with the attorneys
go to them directly or you don't want to
short circuit that process just the
practical
advice uh goodness
my personal opinion is i've always
started at the
the the county taxing authority um but
i'd love to hear
if molly has a additional thought
now um if they are coming to to my
unit and the way we do things at trla is
we split things up
with private lenders and um
government tax suits so i'm not
typically dealing with the government
taxes i'm typically dealing with
the private lenders and so we're usually
at the point
where there is an attorney involved if
we're getting involved but
um we will advise people to go and talk
to their cad and try and set up a
payment plan if they also have
some outstanding taxes and it seems to
to really vary by the cad
some are very helpful and will
immediately set up a payment plan and
others have a pretty high bar
and you know if it's not readily
apparent that the person
is the homestead owner they're not going
to walk people through
all of the possibilities and so it does
help to know a little
bit about um what the code is you know
the tax code is obviously um the place
to look for all of those
exemptions um mostly in chapter and
chapter
and the property code also has
some some helpful things especially if
you have a mortgage
in place there are a few helpful
provisions
because typically if you have a mortgage
and you're behind on your taxes that is
considered a default
and so even if you are current on your
mortgage payments
your mortgage lender can foreclose on
you because you haven't paid the taxes
um and in that case getting a deferral
is not going to help you with the
mortgage lender unfortunately you've got
to resolve
that payment plan and you've got or
you've got to resolve that tax problem
and you've got to do it as quickly
as possible uh before the mortgage
lender
starts to to take action on that so
sometimes what we'll do
is we'll call the mortgage lender um you
know see if they will
advance the money for the taxes and then
let the person pay that through their
escrow account
whether that's over months or
sometimes asking them to extend it
really up to five
years and one kind of carrot that we
have
in in making that argument is look this
person
um would probably qualify to do a
bankruptcy in a bankruptcy they're going
to get five years
and then you're going to be paying an
attorney the cost of
litigating that bankruptcy suit so every
now and then
um that works out and
the property code .
um does have a little bit of a saving
grace if you have
a mortgage and you go and set up a
payment plan with a cad
during this very narrow window of time
um you can cure um
the default uh through a payment plan
but that's that's a very very narrow
exception so i would say
look at one .
and read it carefully because it's not
one of these broad
catch-all it's only going to apply in
pretty narrow circumstances but when it
does
oooo.. it helps
it's very rare that you get that magic
wand but when you find that magic wand
where you can pick up the phone and call
someone and fix a problem
it is really wonderful and you know i've
never been more
i've never been more popular with my
family as an attorney when i talk about
the homestead exemption and they found
that out
all the family was so happy like this is
worth your education
Like lauren was saying a lot of our clients come to us they are
years in arrears or already in a tax
suit or i had one client
her house was set to be sold next month
and so
we had to do some really fast footwork
there but
just a little bit of time can make so
much difference in a person's life
and keep them from being homeless and especially with tax suits
especially with tax suits you can you
can file a deferral
up to pretty late in the game um
you have to file with the court the the
affidavit
and the court that issued the order of
sale but if you
get it done within five days of the
scheduled foreclosure action even after
there's been an order permitting the
sale
you can abate that tax foreclosure so
that's a pretty
amazing tool for those homeowners that
are or disabled and qualify for that
deferral
yeah you know and you also mentioned
about the bankruptcy option i wanted to
mention that molly i mean that's sort of
like the last option is to be able to
have a
tool in your bargaining you know with
the other side
one of the podcasts we're doing for this
series is going to be a bankruptcy
relief and
you some of you might know that we have
a very successful pro bono
cle leave like a three hour long one how
to do a bankruptcy your own bankruptcy
we've had recruited
many bankruptcy attorneys out there to
take on pro bono cases
but like you mentioned right now because
of the relief there is there are no
bankruptcy actions that we're seeing
coming into our office it's more you
know unemployment benefits and other
matters
but you know six months from now when
the forbearance is done with and the
payments are done with when the
covid relief if there is any again you
know we're in october we're looking at
not ever coming soon
i think our clients are gonna start
looking at those options so those of you
listening
consider this and you know give us a
call back the pro bono attorneys and
don't
you know just wonder if there's only one
option there might be other ones that we
can have available for your client
absolutely okay just to kind of wrap up
the podcast
um we talked about foreclosures
a lot and i know for the non-real estate
housing attorneys out there just
what does a foreclosure suit look like
what are the different
Options
that's a really good question because um
it looks really different again
depending on
what is being foreclosed um remember
it's not just
mortgage liens you can have tax liens
you can have property owners association
liens
and there are eight different kinds of
liens that are
foreclosure eligible for homestead
properties in texas
and of course some of our clients may
also have you know
a lot that's in the family or something
that's not homestead and so there can
even be
you know even other kinds of of liens
that can be foreclosed um on those
properties so the general rule in texas
is non-judicial foreclosure it's a very
straightforward process you send
um a notice again if it's residential
property under the property code you
have to do a first
notice getting days um giving them
that period to cure the default
and you have to notify them that if they
don't hear the default
that you will what's called accelerate
the mortgage and
accelerating the mortgage um or the
other contract lien means that the full
balance becomes due not just
the arrearage um and then you get that
second
notice that is the notice of the date of
sale and that's the entire two-step
process
-day notice plus -day notice both
have to be sent by certified mail
you don't have to prove that the person
collected the certified mail
you don't have to approve personal
service
you just have to show that um the mail
was sent to the proper address with the
proper postage
so very very quick process um
if it's a federal loan there's a few
additional protections
um but but very very straightforward
then when you get to those home equity
loans
um certain reverse mortgages and
property owner's associations you get
into this
what's called quasi judicial
foreclosures so the
um party that's trying to foreclose
whether that's a property owner's
association
whether that is a home equity lender
whether that is a reverse mortgage
lender
um not because the homeowner has died
but because
they have failed to pay taxes or they
have failed to pick property insurance
or committed some other
default under the reverse mortgage um
that that entity has to go through a
judicial process but it's a very very
quick process
um it's under um the texas
uh uh rules of civil procedure
rule so it is sort of a stand-alone
procedure within those rules you don't
have
discovery you don't have any of the
typical motions practiced
that you might have in a full judicial
foreclosure
service of the lawsuit is completely
different um
it's days it's certified mail
and the two... the procedure could not look
more different than a traditional
lawsuit there's no
motion for a new trial there's no bill
of review and the order itself that the
judge
signs doesn't have any kind of
collateral estoppel effect
and why that's really important is that
if you
have a client who comes to you and they
say oh my gosh this order was signed and
my house is being foreclosed and i don't
know what to do
you can review all of their documents
and if you find that there is
a valid claim in there you can still
file a lawsuit
up until the monday before the actual
foreclosure sale
and you can stop that foreclosure from
happening just as if you had gone in
and requested a tro but it's automatic
just like
the bankruptcy courts automatic stay if
if a lender or a property owner's
association has this
quasi-judicial court order and you file
an affirmative
suit it is automatically vacated you
have to go in
and ask the court to sign an order for
ministerial purposes
but it as soon as you file your lawsuit
it's as if that original
quasi-judicial order had never existed
and that proceeding never happened
um and so sometimes because
um because that order is not
gold some sometimes lenders decide to go
with a full judicial
process and where we see that happen a
lot is where the borrower has passed
away
and so there's some question as to
ownership the lender doesn't want there
to be
a suit by an heir you know two years
after the foreclosure sale so they will
do a full judicial foreclosure
where you get discovery all
all the traditional tricks that you
would normally have in your bag of
tricks to try and
you know stop a plaintiff from getting a
judgment you have the full judicial
foreclosure
um tax lenders also have to follow this
whole judicial
suit so um
i think since around all of those
property tax loans have to go through
the exact same process
a government entity would have to go
through if if they are foreclosing
on a tax debt so if your client has
a mortgage that's paid up but they also
took out a loan to pay their property
taxes
or maybe they own their home free and
clear but they took out a loan to pay
property taxes
those types of loans have to go through
the exact same judicial
process as um
the tax assessor who would be trying to
collect on the tax debt
um lauren can you think of any other
times when
loans end up in the full judicial
process some property association
um debts don't have the non-judicial um
procedure written into their governing
documents and so they have to go through
the full
judicial procedure and property owners
associations are kind of this weird
gray area where the process they have to
follow
really depend on how they wrote their
governing documents and some of these
associations have been around
since the s some have been around for
the last three years
so there's a lot of variation in how
well
the documents are written if they don't
say non-judicial foreclosure is
permissible and it's not
if it's um a homeowner's association and
not a condo association
even if it says non-judicial foreclosure
is permissible they still have to go
and get a court order through that quasi
judicial process
um condo owners associations if their
documents say
non-judicial foreclosure is allowed they
can still do a non-judicial foreclosure
um but judicial foreclosure is
where something usually ends up if
there's something sticky in the process
that's kind of a red flag already
but there might be a good place for some
advocacy maybe
um there was some mistake in the way
that the deed of trust was drafted and
the letters trying to clear that up
maybe and maybe the reason for that
mistake
is something substantive and you need to
get involved but when there is a
judicial foreclosure that's usually a
pretty good indication
that there is something sticky in the
process and it probably deserves an
attorney looking over the documents
and looking for any kind of places where
you can advocate for your client
so we're running
running against the end of the episode i
i want to ask
if if either of you would like to share
a story
where in the context of foreclosure
prevention
prevention whether it be from the lender
or from a taxing authority
anything that stands out of course we
don't want client information or details
right
but um where where you stepped in or
someone in your firm stepped in
and someone was on the verge of losing
their home and you and you're able to
prevent that from happening i would
i kind of want to bring in the human
element so anyone listening to this can
understand what what actually the
impacts are
right either a good story or a bad story
where we were able to help or where we weren't able to help
there's plenty of bad stories out there
um look at any intake log for any
legal aid attorney um people are losing
their homes left and right
right um whether it's in the eviction
context or the foreclosure context or
the foreclosure eviction context
um so i would like to know if any if
anyone would like to share a story about
how we were able to help someone
whenever i say we i mean legal aid
attorneys in general yeah
i have one i'd like to share and then
i'll i'll still ask molly but
um i have what i think is a great story
and it just plays right into this we had
a client who came to us
due to damage from hurricane harvey and
wanted to apply for home repair program
and was told she needed to sort out her
taxes so she came to us
and in looking through everything not
only did i identify that she had heirship
issues and she needed help with the
taxes
but she also had already
an order of sale recorded in the real
property records on her home
from a suit that had already occurred
and so
unbeknownst to her for one weight reason
or another and so i was able to identify
that this
issue was on the horizon and tell her
about that too
and lo and behold while we were in the
process of sorting out the tax issue
they put the set the home up for sale
they she got a notice of foreclosure
sale
and i was able to kind of stop and say
okay we can establish you own this
this tiny sliver at least with heirship
we can get you something
some ownership because that's the key
thing with these deferrals if you can
prove
any ownership you only have to own one
percent and it can be deferred now with
these new
if you qualify for a deferral now with
the new heirship laws
you know you may be able to get your
full exemption but at this point we just
needed to
prove she owned something and we were
able to quickly do all the tax paperwork
and contact you know the opposing
counsel and the constable and the tax
authority and get them to stop her the
sale of her home at the eve of
of sale and then now we've continued to
to continue to work on her taxing and
try and clear up several
several generations of heir issues but i
just wanted to point out how they could
come to you with one issue
you can identify a different issue you
can identify an easy tool to fix it and
you can save someone's home and god
willing we're still going to get her the
home repair to the home as well
would definitely say
that tax suits tend to be one
where you get that really good feeling
that you file some paperwork
and um a person is is allowed to stay in
their house
for the rest of their life and so we
definitely have
lots of those great cases um
and i love those when you just get to to
file some paperwork and then
tell somebody that they get to stay in
their home um
some cases that stand out i mean i know
you said just one and now i'm thinking
of
just all the all the great opportunities
that there are but sometimes you get
you know a weird case and you can you
know pick up the phone i've had cases
where
someone um you know their son
took out a loan on their house and you
know i basically just called up the
attorney
and i said kind of you know what the
hell
you know and i said it a little more
you know like a lawyer than that but he
agreed with me that he was never going
to get anywhere with that and that if
this person had an attorney they were
never going to get away with any
anything and we got a release filed um
you know the next month um so something
like that
you know feels great i had a suit where
we represented
um active duty military he was overseas
and the property owners association
foreclosed on him they filed an
affidavit that was completely false that
said he wasn't
in the military um and so
you know we got involved in that suit it
was very late in the game
um there was already a foreclosure sale
that could have taken place
he had been evicted um or at least there
was there was a
judgment for possession and the
constable was at his house when he
called
legal aid and he was like what do i do
um and so at that point um this was
actually the first day that i came back
from my maternity leave with my first
child by the way i got this call that
this guy is like in his house constables
at his door what do we do
um and so we filed a bill of review and
um
we negotiated with the property owners
association
and i mean they could see the writing on
the wall the second this lawsuit got
filed that this was that they had
screwed up big time that they
um you know that they were going to have
some problems and so
uh we got that one resolved and you know
that's something that i can feel good
about
those are great stories let me tell you
before i forget to i want to mention
that
earlier right now when you mentioned uh
homeowner association i think somebody's dog
had a visceral reaction embarked i think
that's going to be a lot of people
just by mentioning those oh yeah i was
in my house i trained them to do that
but those little mini
mini tyrannies right yes they are and
then you have these stories too you know
you
bought for an attorney that came in and
do some do some advocacy they uh
probably let a mistake go and they go
somebody's home so that's great to hear
those stories
yeah thank you so much for sharing the
stories and just to like
kind of back up like those are small
little mistakes or maybe
not small little mistakes in the eyes of
our client but small little mistakes
maybe
in the eyes of the service or in the or
in the eyes of the people trying to
foreclose
um and if
those are the people who apply to legal
aid right and so
those are the people who know that they
have legal resources and
and or or at least google or or know
for someone who has had a case with us
before
think about the thousands um probably
hundreds of thousands across the united
states that
those little tiny mistakes that are
preventable that can keep them in their
home
go unchecked right and end up losing
their home
um especially in a disaster like covid
or another natural disaster like a
hurricane
it's just crazy and that's the impact
that legal aid attorneys can have and
pro bono volunteer attorneys can have
too is to
we're never going to stop all of them
right those mistakes are going to happen
but changing one person's life by
as a simple thing like a phone call or
sending a letter on their behalf
is huge and i just wanted to i don't
bring it down to the ground level a
little bit so
people understand what what impact you
can do if you volunteer with the legal
aid association or
um firm to help in cases like these
it's it's life-changing for hundreds of
people and
and families across our state so
brother stuart preach this is great man
i'm gonna record that little segment and
play it off and every day because
you know with these groundhog days
working from home i can actually hear
something that's inspirational
actually it's great stuart thank you
for for sharing that belinda that you
want to
share something at the end it was just
stuart made a great point
we do need your volunteers there's just
not enough of us around
and like lauren molly was saying
sometimes it's just something simple we
just need a body with some legal
knowledge to
make a few phone calls to help these
people so yes if you're out there
listening please
uh donate some time if you can um i know
everyone has huge caseloads and family
obligations
but sometimes it's just an hour or two
out of your
month could keep someone from being
homeless
yeah and like i always say you know when
you work your way out of purgatory as an
attorney you do it through pro bono
that's the way i've done it here at
legal aid
yeah lauren molly this is really a great
episode i can't believe how fast the
hour went by i think it's because all
the information you provided i'm sure we
just touched the
surface you know here as to what the
issues are so thank you again for doing
this
thank you thank you for having us yeah
that was great thank you
so i think we're going to conclude the
podcast at this point it's a little
bit over an hour or so um
i wanna thank you folks for listening to
this and we're gonna be signing up for a
pro bono case i really appreciate it
and uh belinda stuart we look forward
to the next one