Avoiding Foreclosure After a Disaster

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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Transcript

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