Texas Disaster Legal Help Podcast

Avoiding Foreclosure After a Disaster

Texas Disaster Legal Help Project Season 1 Episode 2

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/

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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