Video: Just Economy Conversations: Preserving Homeownership and Wealth Creation by Addressing Heirs’ Property and Tangled Titles

Online Event Archive Recorded: November 7, 2024

This webinar, Preserving Homeownership and Wealth Creation by Addressing Heirs' Property and Tangled Titles, provides an overview of residential heirs' property, which is created when a property owner dies without a will or another form of estate planning and the property is transferred to their descendants as undivided interest.

A property title can also become tangled when a property owner completed an estate plan before passing, but their descendants did not complete the formal transfer of title. Without a clear title, heirs' property owners are vulnerable to land loss, unable to acquire housing finance products and face challenges when accessing federal housing rehabilitation and disaster monies.

Presenters discussed residential heirs' property in urban and rural areas, describing the risks they pose for long-term homeownership and the limits they place on family wealth building. They also considered proposed housing finance solutions needed to support heirs' property owners and successful efforts in New York City, with a focus on lending programs that include eligibility for heirs' property owners.

Panelists:

Dr. Keith Wiley, Senior Researcher, Housing Assistance Council
Natasha Moodie, Senior Research Associate, Housing Assistance Council
Scott Kohanowski, Esq., General Counsel, Center for NYC Neighborhoods

Moderator:

Jacelyn Matthews, Director of the National Training Academy, NCRC

Transcript:

NCRC video transcripts are produced by a third-party transcription service and may contain errors. They are lightly edited for style and clarity.

Matthews 0:07
On behalf of NCRC, National Community Reinvestment Coalition, I want to thank you for being with us today to join our conversation, our just economy conversations, Preserving Homeownership and Wealth Creation by Addressing Heir's Property and Tangled Titles. My name is Jacelyn Matthews, and I'm the director of the National Training Academy here at NCRC. We are joined with some amazing panelists that are going to be discussing the topic and leading the conversation today. So we have Scott Kohanowski, Esquire, Center for NYC Neighborhoods, Keith Wiley, PhD, Housing Assistance Council, and Natasha Moodie from Housing Assistance Council as well.

Just a little bit about NCRC. If you are not aware of who we are and what we do here, our mission is to make a just economy a national priority and a local reality. So we're a coalition of about 750 organizations and individuals dedicated to creating a nation that not only promises but delivers opportunities for all Americans to build and to live well. That's the core of what we do here at NCRC. If you're wanting to learn more about us and the work that we do, we do encourage you to log into ncrc.org learn more about us, and maybe to even become a member of our organization. And I'll have you go to the next slide. So just a couple of housekeeping things for today and our conversation. Our code of conduct applies to all of our gatherings, whether in person or virtual. We do have those listed on our website under ncrc.org/conduct, what I will say is that we are all here with the main purpose of wanting to learn and gather information from each other. We're asking that people are respectful of other people's opinions and ideologies in the chat. We do have opportunity for you to ask questions of our panelists at the conclusion of our time today. We want to make sure that we're creating an environment where people feel safe to be able to share and ask questions, big or small, of our panelists, but also of each other. I also want to mention that internet, everybody is coming from a different internet, right? We're all kind of utilizing whatever we have, whether we are home, we're at work, we're in a cafe, we're driving, we're walking, etc, so maybe a five to 10 second delay in all the slides, or you may experience temporary audio/visual lagging. That's normal. We just ask that you are patient with us. If you have any other technical issues, please contact [email protected] immediately so that we can be of assistance. And I also want to say yes. So some people are already putting in the chat where they are, their names, where they're coming from. Would love you to share that information so we have a little idea of who's in the room with us and who we're sharing space with today. So please feel free to add that in the chat, and I'll go to the next slide.

So here is what we're covering today. I'll introduce our speakers. We're covering heir's property and titles, Research and Methodology, and then some solutions. And so before we get started, I will just briefly share the bio of some of our panelists today. So first we have Keith Wiley. He's a senior researcher at HAC. He worked extensively with many data sets in an effort to better understand where, when and how development patterns occur. As part of these efforts, Keith has authored a recent article in the Journal of Housing Policy Debate entitled "The Role of the CDBG Program in Rural America," and has written several reports analyzing rural lending activities. He also co-authored both a book chapter in the Oxford Handbook of Urban Economics and planning and the resources for the future discussion paper exploring residential infill. Keith holds a Master's in Public Policy from American University and a PhD in Public Policy from the University of Maryland Baltimore County. Natasha Moodie, is a senior research associate at the Housing Assistance Council. She came to us. She came to HAC as a Stevenson Fellow in the Applied Community and Economic Development Program at Illinois State University, where she completed her master's thesis on racial equity in the housing market. Natasha's current research focus on projects focused on access to affordable housing and rural communities and the intersection of housing land tenure and the racial wealth gap. And then, last but not least, we have Scott Kohanowski, General Counsel at the Center for NYC Neighborhoods, previously directed to homeowner stability and LGBT advocacy projects at the New York City Bar Justice Center. In that role, Scott has trained attorneys, supervised cases, of place with pro bono and staff attorneys provide a direct legal representation to distressed homeowners and engaged in law reform, reform to preserve Housing and Communities. His areas of expertise include foreclosure defense and property law, heirs property and community stabialization, and deed theft and scam prevention and imitation, all with an acute focus on racial equity and social justice across communities. He is a graduate of the University of Minnesota, with a BA in Portuguese and Spanish, and a 2001 graduate of NWA School of Law. He's worked at Morrison and Forrester and real estate finance law prior to transitioning to the public interest. Scott serves on the New York City Bar Association Mortgage Foraclosure Task Force and nonprofit organizations committee the New York City Attorney General, D Theft Task Force, New York City nonprofit legal services, Foreclosure Prevention Task Force. I know there's a mouthful, but that means that our panelists have a lot that they can share. They are well versed in this topic, and are looking forward to sharing this information with you. And with that said, I'm going to turn it over to Keith Wiley to get us started.

Wiley 5:51
Thank you, and thanks everybody for coming. I'm Keith Wiley, and we work. Just a brief introduction here to the Housing Assistance Council. And Natasha and I work for the Housing Assistance Council. We're a small nonprofit in Washington, DC, and we work on affordable housing and rural communities. We have four, four divisions. We have a training and technical assistance, where we actually provide assistance to communities to build up their capacity and access programs like HUD and USDA Home loan programs. We also have a hack loan fund, where we have a loan fund that we loan money out on. We also have other programs we work with, like the Home Depot, where we do pass through loans for veteran housing and stuff like that. In the Research and Information Division is what I work with and Natasha and I work, where we do houses, a lot of research on rural housing and a lot of high needs regions such as like Native American lands, lower Mississippi Delta, Central Appalachia. And then we also have a policy and advocacy division where we work on promoting affordable housing in rural areas in the nation overall, but particularly in rural areas. And so we always refer to ourselves as hacksters and as hack but it's so thanks for having us here, and I'll pass it on to Scott.

Kohanowski 7:06
Yeah, hi. Good afternoon, everybody again. Thank you for joining us. This is a conversation, conversation topic that Keith, Natasha and I are very passionate about. We were part of a whole national network of, you know advocates and attorneys and folks who are involved in heirs property and table title work. So thank you for joining us. Um, yeah, I'm General Counsel at the Center for New York city neighborhoods are we're not for profit. New York not for profit. We are organized in 2008 in response to the mortgage foreclosure crisis, and we do all kinds of advocacy work. We do policy work research, we administer grants for legal services and housing counselors in New York City that are focused on homeowner stability, whether it's foreclosure defense or scan prevention or disaster relief, those sorts of things. And so we were, we've been growing quite a bit. We probably have 100 staff members now, but we're all things home and community stabilization in New York City. Next slide, please. And just the center itself, we've served over 200,000 homeowners across the state. Served, you know, 31,000 just last year, we served 31,000 clients, saved over well, 3000 homes and preserved during three and a half million dollars in neighborhood property value. The next slide please. And we also have a wholly-owned subsidiary, which is Sustainable Neighborhoods. And SN is also a CDFI, and it's an exempt mortgage banker and servicer, you know, we just through SN, we just administered the half a billion dollar allocation of federal COVID relief funds to New York City homeowners. We did that as loans through our subsidiary. We do, we have a variety of different loan programs, and most of it's all charitable charitable lending, but we primarily do home repair loans through city and state agencies. We do some Down Payment Assistance Loan Programs, disaster relief, and then we have several programs that are focused on foreclosure and loss prevention. Most of these loan programs are structured as nonadvertising, interest-free loans that are low cost or no cost, and they just primarily sit as liens against properties and then we recover those loans when the properties are sold or otherwise transferred, or, you know, if the term of the loan is finished, then we can collect that way. But we're not in the business of going foreclosing on those loans. It's all about foreclosure prevention. But that's sort of the main sort of lending programs we have. And I'll pass it back to Keith.

Wiley 10:26
Yes, thank you. I'm just going to provide a little bit of background on the issue, and I probably won't use the right legal terms. There's a lot of law involved in this, but, but when you know Heir's property is property that essentially, somebody dies and that the estate hasn't gone through formal estate planning and probate, and that land is essentially divided up among the heirs in its undivided interest. So if I had four brothers and sisters and my parents passed away, then we would each get a fifth if it didn't go through probate. So just kind of like, that's the default option that oftentimes happens. But there can also be situations where somebody even wants to leave the land to multiple descendants, but still again, they don't go through this formal transfer. And you've probably heard of this. So then, like, they have it, and then say, like, then I passed on, then without any formal then it would go to their descendants. And that's how you can end up with properties that can have 20, 30, 40 heir's, essentially with an undivided interest. It's not like a divided parcel. So that's how you end up with heirs property without a clear title. Now heir's, there's systematic causes for this, and one of the obvious ones is exclusion from the legal and financial system. We have a history of exclusion in this country through things like the Jim Crow laws and on tribal lands, and that can be direct exclusion, or then once that happens, there can be mistrust in the system, and then people don't trust it to work with it, and this is essentially legal system where you've got to go through probate. There's also financial constraints. You know that happened where I grew up in a rural place. I don't know too many people that there were a lot of lawyers and they didn't have a lot of access to resources they would use to pay them. And you can also have legal and financial deserts. We deal with that a lot in rural areas. We worked with oneone time, a lady had told us it was 80 or 90 miles to the nearest place, so they should get legal help. So these are some of the reasons why it doesn't go through that formal, formal process, and in there's not really financial support oftentimes available for people to resolve it, right? So there's all these different errors, so it takes money to clear that up. Then when me and my four or five brothers and their descendants are involved, and it's very complicated. And on the other hand, if my family's wanted to save the property, there's also not the kind of access to resources, again, legally, where we could make that happen without jeopardizing our property, and it ended up in heir of property status. And so one of the reasons why this is really important is, you know, if you want access to a loan or mortgage market, if you want to repair your home or you wanted to sell it or something, you can't really do that if there's no title. One of the federal housing programs require that as well, and that is one of the reasons why a lot of this has become more attention, because it'd be a disaster like Katrina, and then people couldn't get access to services, and you also can't get access to stuff like insurance. So this is very important that you have a clear title to show clear ownership.

Household implications: so I don't know why that's not showing up, but what happens is it puts families in jeopardy if they don't have they don't have title, they can't invest in their property, and they can always be at risk of losing their property. And it can also mean that people can end up being homeless. And also limits the amount of house, I'm sorry, limits the amount of housing supply. It ultimately results in dilapidated and vacant units. I think we see that a lot, right? Because people can invest in the property, then they don't, and therefore it becomes vacant. There's also a loss of generational wealth. The number one way that people can make or accrue wealth and pass it down is through housing. So if you do not have that ability, then that also exasperates the homeownership gap. And one of the things that's oftentimes overlooked is the tax base in the community you're in. If the property falls in a vacant or dilapidated condition, it's not worth as much, then the taxes can't be collected on if they even are and that means fewer services to the people who live there. So it's kind of part of a vicious cycle. And I think it's also related to, maybe not directly, but tangently, related to things like out migration and population decline, right where you have them occurring, you're more likely to have errors issues, and it's just kind of like a vicious cycle. Familiar land control is one of the ways that families might want to compete, keep their land intentionally, in the in the hands of descendants. This is another way. So another, the way I'm generally talking about is if you don't have the ability to do it, you don't have ability through access to legal services, but it can also be that you want to keep like the home place in your descendants care, and it can be a defensive mechanism against homelessness in the legal system. It can also be like a communitable approach to land stewardship, or like some we talk some of these families, they've been on a land for over 100 years, and it refers to cultural ties and political agency stewardship and kinship ties to the land. So you may choose this, right? So, and some people may not understand that, but you may choose to keep your land in this form. And again, though it could end up in heir status if you don't have the resources to be able to protect it. I'm going to turn it back to Scott,

Kohanowski 15:38
Yeah, so we're an organization that works primarily in New York City. We do have some programs that extends throughout the rest of the state, but it's it's primarily New York City, as our name kind of indicates. The next series of slides, I'm just going to talk about the unique things that we've seen in the urban context, as opposed to rural, and what are the major differences? And obviously in a place like New York City, almost all of New York City is developed at this point. There's very little vacant land, and it's almost all commercial, residential and, you know, government uses and things like that. There's little, if no, timberland or farmland or anything like that. And so what we're really talking about in heirs property in the context of New York City, it's all around residential homes, and it's going to be co-ops, condos, one to four family homes, and that sort of thing. And New York City, too, also has its sort of own unique issues around housing, because we have, we've always had an always, always, always had a housing crisis. There just aren't enough homes for the number of people that live in New York City. And so there's very limited supply. It's very expensive housing stock, and so it's, it's kind of ripe for the abuses and speculation and things that I'm going to get into the next slides. It's a little bit different than some of the urban issues in other parts of the country. Maybe, you know, Detroit is a good example that where there's a very high vacancy rate, a lot of abandoned homes and the the property values just aren't the same as they are in a place like New York City.

Next slide, please. So I just want to give some historical context here, because when we think about heirs property. We think of it. I think of it primarily as a racial equity issue. And you know, disproportionately the neighborhoods and the individuals and homeowners and heirs that we're working with are people of color, and it's all in primarily African American homeowners, residents, heirs, and it's just a lot of that is a result of historic and continuing racial discrimination that we're all should be very aware of. But we can trace a lot of the issues that we see on the ground today directly, you know, back to, you know, the ending of slavery in the United States and so during you have this reconstruction era where African Americans were able to acquire a significant amount of land immediately, you know, coming out of the war. But then we just saw a constant erosion of that that getting those, that property, that land, and the homes. The Jim Crow era was had a lot to do with that. As I'm sure everybody knows, the great migration, that's when northern cities experienced a lot of influx of former slaves and their descendants into her urban areas, the the restrictive covenants this, you know, during all this time is sort of a reaction to migration into a lot of the Northern cities and these and this, you know, always it existed well before the Great Migration. But restrictive covenants on lands, for example, you cannot sell property. Or maybe there's something written into a deed that says, specifically, this land or this home is only available for White Christians. We see that even, you know, here in New York, we see some of these old D's that still have those kinds of restrictions, the and redlining practices as well. And this redlining was, you know, restricting loans to only certain parts of a city to have take out a map of New York City, for example, and you know, the whatever, whoever it was, would draw a line, a red line, and say you can't make any loans to anybody above this red line or within these red lines. And those are primarily, you know, the less desirable parts of this of the city, and also where there are concentrations of African American residents and so, so a lot of people are just locked out of the mortgage loan market because of the color of their skin. And it has major implications when you fast forward up to now, because, well, first of all, a lot of these properties in areas like Harlem in New York City, the property values were artificially depressed significantly. And also, a lot of these homes had had no mortgages on them at all. And you fast forward 50 years, and it's still the same thing you have, you'll have, you know, heirs of grandma who own the home. And there's a ton of them, maybe 20, and they're scattered all throughout the United States, but there's still descendants who are living in that, that Harlem brownstone, but it's an unmortgaged property, and because of the gentrification dynamics in New York City, those properties become targeted by the speculators because there is so much equity there, and a home that was artificially depressed in value at that time, maybe worth $30,000, now is worth 5 million. And so that's why these homes and these properties are such, are being so heavily targeted.

Eminent domain, we think that even still goes on a lot of places where, but I'm not really sure, but this is where, you know, government agencies would go in and declare a certain area, they acquired a part of the city and maybe put a new highway through, through primarily African American communities. Because what we saw, Robert Moses did that to New York City, where he take entire parts of the Bronx, for example, and just declare eminent domain and put in a highway and separated communities and breaking communities apart. Fair Housing Act 1968 that got rid of a lot of the discriminatory laws that existed, or, you know, restrictions and things like that. It it so a lot of the practices like redlining and other things are no longer permitted. But then there's, of course, all kinds of workarounds that that you see happen since. Reverse redlining: That's primarily what we think led up to the 2008 mortgage foreclosure crisis, where you now are looking at those same neighborhoods that are majority-minority, and the those are now the targets for the banks, because they see are the lenders, subprime lenders and predatory lenders, because they it's a lot of people in those communities who are locked out of affordable credit markets, and it's a way for these lenders to, you know, make loans, increase their portfolios, but they're subprime loans, and they would package these and turn them into these, you know, securities that or then market but they're just making really bad loans that led to that crisis. And so a lot of the work that we were doing at the center, for example, was assisting all those victims of predatory lending practice, predatory subprime lending practices, and then appraisal bias, like we've all seen this. It's something that's gotten a lot of attention. How a property that could in all respects, would be exact, the two properties in all respects that are the same, even next door to each other, if one's owned by a Ahite person, one's owned by a Black person, the appraisal bias is that the Black-owned property is going to be worth much less on that appraisal. It's estimated to be worth on that appraisal, but it's something that we're working on. But I want to play you this short video that articulates much better than I can what we're seeing in the urban context. So if everybody can see that

Video 24:41
I was born in the Republic of Panama, and I now live in New York. My father bought the house in 1979 this very lovely, quiet neighborhood. You really enjoyed being there. After my father passed, I was suddenly surprised one day when I received a letter from the Department of Housing telling me that there has been a transaction on my deed.

So I went down there and found out that someone had placed their name on the deed. They sent me to City Board justice.

Fast forward 50 years, and now you have these homes that are worth millions of dollars. So those are the sorts of homes that are ripe for predation.

To come to your house and have a sign on the door that says private property when you call up the number on the sign, have the person on the other end say, I am the only one who owns this property, by the way, can I buy your interest in the property? But they do it, and they're usually successful, because most people in these cases things. But our clients, from the beginning, refused to settle. They wanted to fight it.

Tell me a little bit about what happened.

Truthfully, I don't know exactly what happened, not at all. One day I'm cleaning up the house. Next day there's a lock on the door. All I know is I'm arguing with some people that say they own 50% of the house, and I just don't understand how I need to stop this, because it's destroying something that they don't understand.

You're up against party that acts as if the court does not exist.

But you're affecting not just me but my whole family, the city of

Our justice and our homeland Disability Project, we are really focused on keeping those communities intact, and a lot of times are lifelong homes. That's incredibly upsetting.

It really had a tremendous impact on me.

I think we have an ally who understands the impact this has.

You're helping people reclaim their dignity.

And so what is what does that family home mean to you?

Everything you mean foundation where, no matter how far you go, can always come home. But unfortunately, there's no home. It's still Rocky, but it's easier because we have somebody backing us.

Kohanowski 28:36
There's also with that video, there's some really nice music in the background and like things, and it cut out a little bit just because there's technical lag. But that's basically the story of two of my former clients when I was at the city of our Justice Center, and we're just working with pro bono partners to get them legal services to help protect our homes that have been preyed upon. And I'll get into that more in-depth in just a moment. Next slide, please.

Yeah. So what is predatory partition of heir's property? It's a predatory investment practice that forces partition by judicial sell, stripping equity. It's basically a lawsuit brought in court where you get a court order that mandates the sell of the property. It's a tactic that was first identified, really, in the rural coastal south. It was used by developers. And, you know, places like the gula Islands, where you'll have land that had been Black-owned since the construction era, and there may be 100 or more descendants or heirs. And the developers would target that, because it could be, it's very prime real estate, courses and resorts and things like that. And they were able to go and find one long lost air somewhere, and they would acquire their interests, or fractional interest in that property that they acquired, you know, through just by operational law, through the laws of intestacy, meaning that, you know, nobody ever dealt with the will or dealt with the estate, and now it's just fractional, fractionalized-ownership amongst a large number of relatives. But if they were they went and they were able to acquire even small interest in that they could bring a partition action and they could force a sell of that property. Usually they were the only bidders. It was again depressed value and the interests that they acquired to begin with were probably much less than what those interests are really even worth. We began to see this practice in New York City about six years ago. I'm sure it had been going on long before then, but it was when I was still doing direct legal services, and we deal with all kinds of scam prevention. And several people came into our project describing this and what was happening to them. And somebody living in their parent's home, and, you know, they had two siblings, and the siblings sold their interest on this home. That's maybe worth the million dollars to, you know, an investor for $100,000 a speculator based on misrepresentations that that speculator, speculator had made to those other heirs. And so then you have the speculator acquire those interests, and they bring the partition lawsuit and force the sell through the courts. And you know, I didn't know anything much about partition law when I started seeing this practice, and I just started reading through the case law, and it's just, it's, it's terrible, um, it it just traditional partition law is just, it's just really super onerous. And so we, we saw what was happening in New York City. We got a lot of publicity around it. We were connected with Thomas Mitchell, who had worked on some law reform efforts in this area, but mostly focused on rural areas. I mean, it was applicable to everything, but the rural focus was what was going on in historical historically Black-held lands in the rural south. But you know, the speculators had basically used these successful tactics there and transplanted them to high-value properties in New York City. And I'm sure this happens in many other places, or we know it happens in many other urban areas. But it's, you know, it is theft. It is equity theft. When you're stripping, you know, millions of dollars worth of wealth held in this home, just with, you know, deceptive business practices primarily, and it's just people that don't know their rights. Don't have access to legal services to adequately advise them they don't have access to capital markets, or they don't have access to credit because, you know, historic again, discrimination or just insufficient income or insufficient resources and all those sorts of things. Next slide, please.

Moodie 33:19
Hi everyone. Natasha Moodie, Housing Assistance Council. So as Scott was just mentioning, the predatory partition sales, there's an article that's published in the brownstone, or I can drop the link in to the article in the chat. But wants to highlight a very specific example that happened in Brooklyn also, because it's a very, very sad story, and we also use some examples from the situation throughout the presentation. But this home was purchased in 1940 and since then, four and five generations. This is the fourth and fifth generation currently that we're living in the home - Philipa Doyle and Aisha Doyle. And so for 75 years this this home had been in the family, and the deed was last in Philipa's mother's name, and upon her death in 2017 Philippa thought that the executor of her mom's will had probated the property, but the property was not probated, and so Philippa and her brother both had a undivided interest and claim to the home. Philippa and her daughter Aisha, lived in this home. They had paid off the mortgage, paid all the bills, maintained the home, did all the upkeep, and plan to have it for future generations. But in in 2017 the Doyles received a call from an investor saying that they had purchased interest in the home. So at that point, they looked into it, realized it had been probated, and decided to try to to probate the property to clear the title, but Philippa could not get in touch with her estranged brother, who they think was living in Australia at the time, the investor claimed that he purchased 75% interest in the home for $300,000 and so this investor attempted to force the sale multiple times, and eventually, after many years of fighting, the home was sold earlier this summer for $1.7 million and so the Doyles are facing a situation where they've already spent a lot of money fighting this legal battle from 2017 through 2024 and now they're facing the question of where do they go? Because this has been their home, and they intended to be their home. They didn't anticipate it wouldn't be their home. And so they're facing now housing insecurity because of the theft that Scott just kind of highlighted. And so with that, I'll actually put turn it back to Scott.

Kohanowski 35:34
Yeah, and thank you for that, Tasha. It's a it's a great illustration of what we see over and over and over again. I mean, these aren't isolated cases. You scratch the surface and you realize that it's been happening for a long time, and it's we're talking millions, billions of dollars of wealth that is being appropriated and transferred out of the hands of communities of color into speculators. These two gentlemen, well, there's a third, we kept seeing their names popping up in these predatory partition cases, and people coming in and seeing their names, and so I contacted one of our investigative reporters that we work with on certain kinds of scam prevention things, and what they uncovered astounded even me, and I'm pretty jaded. I see this stuff a lot. So these these brothers, had managed to acquire about 120 properties all throughout New York City engaging its exact practice. And it's primarily, as you can see in the map here in communities of color. The value of the of their acquisitions were Probably around $150 million total. So they built a little real estate empire by engaging in these, these practices. They would set up LLCs, Limited Liability Companies, to hold the properties. It's much harder to trace who owns the property. If there is an LLC, you don't know who the members of that LLC are out of the times, but the investigative journalists were able to figure out and connect a lot of these LLCs together. I'm sure there's a lot more than just this 120 properties, but we see a lot of the same actors, a lot of the same speculators involved in these transactions. Next slide, please.

So what's been done nationally to address the prediction of heir's property, and also what is our been our approach in New York? I mean, the biggest thing out there that we all need to do is it's public awareness. Just getting heirs, anybody who owns an interest in a property like this, or anybody who owns property and they want to make sure that their property doesn't turn into heirs property. It's just getting the public aware. It's either through, you know, news or through conferences, seminars, webinars, being out in the community, you know, putting stuff on the radio. Those are all things that we've done, going to churches, going to senior centers, and just educating the public about this practice and what they need to do to avoid or deter it or fix it.

Estate planning and legal resources. There's been a lot more focus I've seen in the last five years on providing estate planning and legal services to low-income homeowners, low- and moderate-income homeowners. And it's, that's, it's so, so, so important, because you're these homeowners need to have an estate plan in place to avoid the property turning into a property, whether it's a will or, you know, a transfer on death deed, or some plan. But people just need to really think about that. Homeowners really need to think about that, and they need those sources and also the legal resources when somebody has passed away, they need somebody to assist in probating a will or administering an estate, or, you know, preparing airship deeds and affidavits or even litigating these predatory partition cases, for example, or quiet title actions, different things like that. One of the biggest law reforms in this area is the Uniform Partition Heirs Property Act, and I'm going to go into that a little bit more detail the next few slides. And then there's other just legal and systemic reform. And we've all been engaged in this, and, you know, making sure that a property that's experiencing tangled title, they get access to the other government benefit programs or like relief programs and things like that. When you have an heir who is living in that property, ownership interest, and traditionally, they've been locked out of a lot of these programs because of the table title issue, or there's not a clear record of title in the land records. But again, it's a lot of this is just around rules and local rules and regulations and expanding lending programs to be heirs property aware. The next slide, please.

So the Uniform Partition Heir's Property Act, it's been a very, very successful Uniform Law came out of the Uniform Law Commission in 2010. Again, Thomas Mitchell, who, you know, we all revere as the real expert here, and who's, you know, kind of worked tirelessly forever in this law reform area era, but he was involved in the committee that promulgated the this uniform law. It's now been passed in 24 states, I believe, yeah, and it's been introduced in six others. But the key features, is it just trying to level the playing field here for the heirs against, you know, well-powered, well-moneyed interest, it requires a posting of a notice of lawsuit on the property. You know, traditionally, a lot of these heirs had no idea that an interest had been acquired and the lawsuit had even been commenced. It's a court determination of appraised value. This is, you know, if the court is going to divide the proceeds or permit somebody to purchase an interest, it's the court that's going to determine that value. If the parties can't agree on what it is, there's a co-pilot tenant buyout with the priority of the to the holder dollars interest. There's a preference of partition in kind. So basically, partition works in two ways. You're either going to physically divide the property, so you have, like, 100 acres and you have two heirs, so you give or two, you know, tenants in common. You give each heir 50. That's partition in kind. It's just a division of the property, you know, based on whatever their values are. But there's also a partition by sell, and that's always that's become sort of the default in traditional partition actions, because it's just so much easier but it was a problem in rural areas because, primarily because a property would be that was subject to one of these lawsuits, there'd be a court-ordered sell, but then that purchase price of that sell would be very, very, very low. So we're seeing this equity being stripped from the property because of the partition in sell default, as opposed to, if you say you have, you know, heirs who are farming or working a part of the land. They would just, if it was partition in kind, they would just carve out that part, their share of the property, and they give it to them, instead of them being displaced from their land. And then there's just a few other things, like a preference for an open market sell in New York, we never had that really written into law, where it could be a brokered sell instead of forced judicial sell. Next slide please.

So in New York, because we have sort of unique issues on the ground, working in an urban environment, and that's where we're seeing this predation happening. We changed or modified a lot of the standard uniform law. We got ours enacted in December 2019, it was in response to some media coverage that we got just showing the extreme inequities of traditional partition law. But among the key features of our law is that we expanded the definition of heir's property. So basically, anybody who even lives in the property, if they're an heir, now it's considered heirs if they're they even if they have a small fractional interest, it's considered heirs property. The unmodified law had a really high threshold. I think it was something like 20%. It provides for our version provides for mediation. It's alternative dispute resolution, and that's a court-monitored process where the parties are required to sit down and negotiate good faith to find a solution, to try to preserve the property's value if they can. Our version of the law, it permits a second opportunity to answer the lawsuit and put in an answer to the complaint. This is, again, is like highly legally technical. But what we were seeing in the foreclosure context, primarily, but also in this context, is you know somebody served, you know somebody who doesn't have any experience with the legal world, is served a complaint, and the complaint says you have 20 days to put in an answer, they typically just have no idea how to do that. And so we're seeing really, really high rates of default in the foreclosure context. And so what we did there is that when we have these settlement conferences, which we wrote into New York's foreclosure law and now we wrote into the partition law, the court is required to explain to these unrepresented heirs that they have another opportunity to put in an answer after the start of these conferences, so that they're not in technically default under these lawsuits. Because if you send a court notice to somebody that says, show up at the courthouse on this date, at this time in this room, they'll almost always show up. When you have, like, this really complex legal document that says you have 20 days to put in an answer, you know, nobody knows how to do that. The other good thing about the settlement conferences is it's an opportunity to connect unrepresented heirs to legal services who can assist them in preserving their rights. We wrote into our law that an heir occupant has first priority over everybody else. You know, it's to maintain community ties and keep people in their homes, keep people in place in their communities. And this doesn't depend on this priority, this buyout priority, doesn't look at what the percentage interest is, it looks at your occupancy. And then the next level of priority goes to other heirs, who may not occupy the home, and last to the third party, party that had acquired that interest. And then finally, it permits the court to look at all the equities. I mean equities just means all the different factors that inform the fairness of what's happening, whether or not it's fair that this investor who paid $10,000 for this interest, that's a million dollars, is able to now demand a million dollars to sell their interest back to the family, somebody in that family, things like that. It's now explicit in our law that the court can look at all these different factors, like, what did the speculator offer to pay? What did they tell the other errors when they were acquiring these interests? Did they make any kinds of misrepresentations? Were they harassing to hold out errors, to sell their interest and like banging on their door every day, you know, things like that.

Next slide. So we just got another major improvement to New York's law passed this year. It's the New York Heirs Property Prevention, indeed, Theft Protection Act. New York is already a leader in, you know, our version of the Uniform Partitioners Property Law, and we kind of took it to the next level, and now we've taken it one further step. Now our law, it prohibits non-heirs, these third-party investors, from even commencing the partition action. It's not taking away their property, right? It's just saying that you can't go to court to force a cell or anything else once you've acquired this interest. So you can have to work with that homeowner in some other way, otherwise your interest is just going to sit there. You can't employ the courts in your scam. It also provides heirs a right to purchase the interest on the same terms that that third party had bought it. So the investor bought interest a million dollar interest for $10,000, now the other heirs have a right of first refusal. Basically, those heirs have a right to purchase that interest on the same terms and conditions as that third party. And then the other parts of this great legislation is they included a new deed theft criminalization provision, so it gives more authority to the Attorney General and the prosecutors to go after the really bad guys, the ones who are committing fraudulent acts. And then we also included a transfer on a death deed, which is a special kind of deed that assists in estate planning for people of low to moderate means. And basically, you would prepare and record a transfer on a death deed in the land records. And so the interest automatically transfers to whoever you name in that deed when you pass away, but you still have full ownership of that property when you're alive. And you can also still transfer….you can rescind that deed, revoke that deed until the the time that you die.

Next slide please. Yes. Thank you.

Wiley 50:26
I'll just take over here and talk a little bit about our study at Hack. We did a national study of errors where we tried to get just like a baseline account. And first slide here, I want to show is I just want to people think that we think we are the one that's created this. There's been over 40 years of research done, and here is some of the studies that we really stand on the shoulder of giants, from Dr Cassandra Johnson Gaither to Connor Bailey and Dr Ryan Thompson at Auburn. There's a lot of people, Professor Heatherway, that have done a lot of research on this. And so we really kind of use that over the last 40 years to try to help inform what we did. And so I just think it's important, and there's a lot of information out there is very good, and there's a lot of work still going on by a lot of really good people. Now next, our methodology that we used was we have owner characteristics and property characteristics. We use the two-step approach. So one, we took a tax assessment, indeed, data, a large file that was provided by, I think it's ICE, it's that where they collect all the property tax assessment records. And we essentially search through the names for owner characteristics that were strongly suggestive of errors. And so those we could identify as errors, you know, as if it's different interest in the property if it's really kind of spelled out. But then we realized that would be an undercount. So then we also looked at property characteristics and characteristics that might be associated with heirs, like it hadn't sold in 30 or 40 years, like, you know, they're kind of poor building quality and conditions. So we use them both to create a most likely, which is the only characteristic heirs, and an at risk, which is property characteristic. And then we added them together for essentially an estimate of errors that we created into a percentage, which you can see in this county map here. So we had, like, say, 100 residential properties, and we had 20 that were either most likely or at risk, so we calculated a percentage and we created a prevalence. And this is very conservative. And there's a couple things I want to point out. We had an estimate of 580,371 or about point 6% and this is residential properties. We didn't use farmland and stuff like that. We're going to get into our vacant lots. We added a value of about $32 billion. And again, it's extremely conservative. And you note there's several gray states on here. Those are states that we had some data issues with, and I'm going to talk about them in a minute. But those are states for which we were concerned that the data was not exactly the most perfect. But you can see it touches, the one good thing about this map is, I think it shows it touches many communities. And it's, again, it's very conservative, but I think, you know, it touches pretty much every state. This is an issue in and lot of times I don't think people understand that. And one of the links we found, or we in this is related to some other slides, persistent poverty areas, and this is a map of them using one of the definitions, which essentially is, it had 20% or higher poverty rate at county for the last three decades, so it's chronic poverty. So we found that there was a higher share of heirs properties, about 1.2% compared to .06% in the other counties. So in other words, there was just a much higher prevalence of heirs in those counties. And that makes some sense, right? If it's part of economic distress, it's kind of like just part of the cycle then, and you end up with these heir's properties, then people can invest in them, and it kind of drags the community down, and it kind of hurts the family as well. And they're primarily, they're at risk of losing their partial but then also they are unable to pay taxes, and the property gives into a dilapidated state, so it's kind of one of the things we think it's a contributory too. Now here are the six states we admitted, and I just want to talk about this, because I think it's important. One of the nice things about our paper is, I think more than necessarily a baseline number, is it lays out an approach that I think other people can do. But first, I want to note up front that we had some issues with states with emitted data in Kansas, Maryland, Vermont and Vermont, Vermont, Wisconsin and Wyoming. What we did was we looked at the most likely and the at risk, and we identified areas where they very dramatically. And that was areas we were concerned that our count would be wrong or not necessarily wrong, that it was just wildly too much variability. So when we, in turn, contacted people to see the issues that might be arising, and that's reason why we then admitted some of these states because we were uncertain. And just to highlight that, this is New York, and just to show you some of the issues we had here, and you can see of the ICE number units or the residential properties we had. And then the US Census is the estimate of residential property. So you can see we were missing about half or large share of them in our data, our data set. Now in this case, and you can see for the like the Bronx kings, New York queens, Richmond, the different boroughs, you can see that it varies. In the case of kings, is like 195,000 compared to 1 million. And so what we think was going on is a lot of these are in co-op status and stuff. So our records are counting them as one, which means we were grossly under-counting them. But these are the kind of issues that come up right when you do this kind of research. And so that's why I think it's actually probably better to do it on a smaller level, on a local level. And here's just some of the considerations, and I'll get into that here. We had ours was very conservative, because what we did was we tried to apply it to every county. So if we knew there was a term or an approach that might not work in one county but work in another one, we generally didn't include it because we were unable to specify it. So that would mean we would exclude a lot of cases. The data varied by county and state, and we think in particular, our approach was better for rural areas, where it might not work in urban areas, ie, the, you know, the condos and and co-op properties. We think further regional research is needed. I think this is one of those things where, like, if you're working in a two-county or three-county area, that might that kind of research would be better, and then we could specify and understand that in the southeast and in like North Carolina and Georgia, this is how it might be done. And this is because, remember, there's 3,142 counties, and there's tax assessors in each one. They do it differently. Our research did not look at vacant and farmland. We concentrate on residential but that's an important thing. We did not have race or ethnicity data, which is really important, but we did not want that. But that's reason why you can't really say anything, because you may have a county with a relatively small portion, say of Native American residents, but all the heirs property may have been in that community. And you know, our estimates were sensitive, particularly on our at-risk category to how we varied the measures. We think that's also related to how data was collected around things like housing quality and stuff, it varied considerably. But I think, you know, those are some considerations and things. And I think you know, if you do a more localized approach, you can probably address those. But I think it's important to understand, have at least an understanding of how many people you might be addressing. It's important. It can help you with advocacy and certainly on grant applications. A lot of times, people don't just like to hear, I think it's a problem, or I'm pretty sure it's a problem. If you can put we think it's at least this, this magnitude is really important. You know, considerations and risks, or if you put this at the census track level, then nefarious characters like Scott had talked about, could say, 'Okay, there's an opportunity. There's minerals there that we can extract, and we could buy this land from people and force them and get a cheap sale,' to put people at risk. It's like a, you know, you Hippocratic Oath type situation. So you've got to be very careful with doing that. You know, the data, you know there's going to be issues with it, and so you need to know that and understand that, and whenever you do this kind of research, understand there's going to be limitations as well. But you know, that's kind of I think it's important to do that as a baseline, and I'm going to turn it over to Scott again.

Kohanowski 58:16
Thank you, Keith. Yeah, so at the center, we have been also trying to quantify the extent of heir's property in New York City and New York State. And you know, as Keith mentioned, their report excluded New York for various reasons, but we just don't know really the extent of heir's property. I imagine it's in the billions of dollars. But we were funded by Wells Fargo, Wells Fargo Foundation, to do some preliminary research to just wrap our heads around this question: you know, what is the extent of heir's property? What is the extent of loss of heir's property in New York due to various factors, not only predatory partition but, you know, a cell like a foreclosure for like a reverse mortgage loan once when a homeowner dies, or foreclosure for property taxes, or, you know, the house falls into disrepair because of some disaster, and nobody could get any relief funds or home repair grants or things like that. So anyway, we connected a study over a five-month period, just looking back at how many, looking back at all the partition lawsuits that were filed. And it's really just a starting point for our research, but one of the things when we got the Uniform Partition Property Act enacted in New York, we also got the court to modify the form that you file when you bring a lawsuit, and now they have to indicate whether it's a partition of heirs property, the plaintiff, the party bringing the party, has to indicate if it's a partition of heir's property case. And so now we can track these cases. We can go back and look at all the new filings in the court system and determine if it is heir's property. It's not fell proof, because a lot of times the party bringing the case will not indicate that it is heir's property, but we can usually figure that out as well. So we went back and looked at a sampling of properties of partition case is filed in New York City over the last five years, not five years, five months, and the just to get some preliminary results, again, some preliminary findings, to understand that scope, we intend to go back and look at all the cases that have been filed since the PHP a was enacted. And are we able to do so and maybe even extend this research further. The new law that doesn't permit these partition actions to even be brought by these third parties didn't take effect until July. We do know that these parties are filing new partition lawsuits, even though the law now says they can't. So that's another part of the research that we're going to, you know, try to engage in. We need more funding for that sort of stuff. Resources do that. But that's kind of where we're going with this. But the methodology is, we look at the cases that have been filed, we pull out the property address, we look up to see what an approximate value of that property is and then we also collect other information, like, who's the actor? Who are the actors here? Who are the firms bringing these lawsuits, who are the investors, speculators, and just pulling all kinds of data out of those cases?

Maybe the next slide will be helpful. I'll just give you these preliminary results. This is ongoing research and but just for a little more background, how what are we talking about in New York City? There's 8.3 million residents in New York City, with three and a half million housing units. Probably about 60% of that is rental. The other 40% is owner occupied, or yeah, owner occupied. Of that, just over 300,000 are condo units. 450,000 co-op units. Co-ops are very kind of unique to New York. They do exist in other states, but they're primarily in New York. And when you co-ops, for example, aren't real property, that's how they're distinguished from condos. They're still in a multi-unit building. But when you buy a co-op unit, you aren't actually buying the real property itself. You're buying shares in a corporation having allocated to a specific unit in that building, and then you're entering into tenancy with the corporation. So you're wearing two hats as a co-op owner, you both own a share of this corporation, but you're also then renting a unit from the corporation. So co-ops have all kinds of different problems, and I think you know, as Keith had mentioned, that's one of the units that were one of the kinds of property ownership that was really hard to identify when they're doing their study. We have about 450,000 single-family homes and 740,00 2 to five-family homes.

Next slide, please. So what are the key preliminary findings here? The research period was just over five months out of that we pulled out 182, well when I say we we have this really great research team at the center who just really did the deep dive into these cases so they're the ones who are responsible, or should be credited for these preliminary findings, but they identified 182 likely heirs property cases. Estimated mean property value was over a million dollars. The combined property was $200 million so we're just talking about a very small sliver of heir's property in New York City, and it's only those heir's properties that have already been targeted by a speculator have that speculator has acquired an interest and they're bringing a lawsuit. And so these are the ones that are at the most critical, you know, have the most critical threat of being appropriated, of having equity lost, and so that's why we're kind of focusing on these ones to begin with so that we can quantify the loss. But also by looking at these cases, we can also make sure that the heirs are getting representation. That they know their rights. And all the other good things. But what is it? What he's property are not being identified by our research here. There's a ton of heirs' property that is just sitting there, and it's been sitting there for decades that you know that's really hard to understand or find, you'd have to do some sort of combination of looking at death records and comparing that to the title holders and there is a way to do it. We just need to create that model or figure that model out. So that's that's all a work in progress.

Next slide, please. So out of this small sample, most of them are in Brooklyn, which is a very, very high valued borough, now a very large borough. Borough is in New York City aligns with, it's a political subdivision, aligns with counties, basically of Kings County, which is Brooklyn, Queens County, Queens, New York County, which is Manhattan, Richard County, which is Staten Island, but this is a distribution. So we're seeing most of this predation going on in Brooklyn and Queens, where there are large areas of, you know, historically, minority neighborhoods that have rapidly gentrified and that's why they're being targeted so heavily. And Manhattan has very, very, very high property values, but not as many communities of color like the other boroughs do.

Next slide. So estimated mean property value is $1.1 million average New York City home value is almost $900,000. Half of the cases in our sample study are in areas with above-average home values, which kind of goes to what I was just saying, where you Have these rapidly gentrified, historically minority neighborhoods. Next slide, the income levels of affected properties. 43% are located in areas where median homeowner income is below average. So you have a very, very valuable home, the heirs and the owners are lower- to lower-income compared to the rest of the city. Next slide, age demographics, it looks like about a third of these homeowners in the study are, not really quite sure what that means, 55% of heirs property cases in areas with an above average percent of homeowners. So the properties being targeted are disproportionately held by seniors. The heirs are disproportionately seniors. And it's because a lot of these, you know, a lot of the individuals who are dying or passing away who are the homeowners they're being taken care of by their adult children who also live in the homes. And so there's just a strong correlation there. Next slide. And then racial demographics and heirs' property cases. So we were looking at census tracts and comparing that to the sample study, about 60% of the cases are in areas with above-average percentages of non-white homeowners. Next slide. So this is just a summary of the findings. Half the cases in high value areas, heirs, property affects, lower income households, older homeowners, more affected. Nine white communities are heavily impacted. Again, this is very small sample. Next. And the key takeaways is we need more outreach education to prevent heirs' property, more state planning services partnering with local organizations to implement best practices, and, most critically, the financial and legal support. Next.

Moodie 1:09:10
So, after we conducted the quantitative research and collaboration with Fannie Mae at Hack, the question is, kind of, what's the role of the housing and housing finance industry in this? There's been so much amazing work done in the legal space and in the agricultural space around this. There's a lot of local initiatives to support residential heirs' property owners. And so looking at what are some of the things that on the national level that the industry can come to collaborate and to support heirs property owners. And so one of the areas is that when it comes to buying out other heirs which Scott mentioned, Scott mentioned that earlier, and that was the situation with the Doyle family, where someone had purchased the interest and there may be an opportunity for the heirs to buy back the interest of to buy back the interest of external partners or buy the other heirs to clear the title. So next slide, please. Thank you. And so looking at the housing finance industry, the question is, can we create a product to meet a need that there currently isn't a form of capital available to pursue this? And so when an heir wants to buy out another heir, there is no funding available or product like that on a national level. So is it possible for industry to create a buyout loan that is viewed as a long-term property purchase loan? And so in the case of the Doyle family, where the investor purchased the shares for $300,000 if the situation had played out, which is a provision of UPHP that Scott had mentioned earlier, if the Doyle family had the option to to buy back the interest of the outside investor for $300,000 very few households in this country have $300,000 in cash laying around to be able to do those types of purchases. But it may be even as small as $10,000 and I say small quotations in some areas with lower property costs, but a lot of families still don't have that kind of cash. So can we create a product where this is the lower-interest, long-term loan that folks can use for this buyout loans.

Next slide please. And so also, there are homeowners who like who want to clear their title and also may need home repairs, because, let's say, for example, they have not had clear title for a while, so they weren't able to access the housing finance repair monies, whether that's through finacial institutions or for federal monies, and so now they're looking to clear their title and repair their home. Is it possible for our industry nationally to create a product where there's a housing repair loan and then there's an attachment of the funding needed to clear their title. So Scott had mentioned how, you know, there's so much amazing pro bono work and legal services and legal aid organizations that provide these services, but in some of our communities, those services are not readily available. They may need to use private attorneys and pay those attorney fees. Even if there is legal aid, there's still some court fees that may be aligned. There are some other fees that they need to pay for. So can we use the capital in the housing finance markets to support heirs' property owners by expanding the type of eligibility for products. Next slide, please. And so I just want to mention quickly in interest of time, that, as I was mentioning that, particularly for our rural communities, since Hack works in rural primarily, that, just want to highlight that there are many legal deserts. And so when we think about pathways to capital, if the barrier still is, they have to clear title first. That is not an option in communities where there is no attorney in the entire county, and so only 2% of attorneys, that's all types of attorneys, work in rural areas. And this data comes from research from the Legal Services Corporation. Just want us to keep in mind that as you think about products, we need various types of products, because heirs' property issues present in many ways, but particularly when we think about we want to support those who have the ability to clear title, to have the funding available to do that, but there are communities where clearing title is not an option. And so next slide please. And so we just go to the next slide after that as well. Thank you. Thank you, Keith for the interest of time. And so we want to look at, we know that there's some initiatives on the local level being able to do this. So the national level, can we consider giving housing repair monies and lending on demonstrated partial interest? If, for the example with the Doyle family, I just go back to that, because you mentioned that if she can show like, 'I have partial interest in this property and I really need access to housing repair monies,' can we figure out ways in the underwriting process to think about collateral a little differently and how that ownership can be demonstrated to be able to access in some areas, much-needed housing repair monies? Next slide please.

And so I'll just want to highlight quickly that heirs' property as both Keith and Scott mentioned, are one symptom of a systemic issue. And so while we're thinking about products to support heirs' property owners, if we are creating products within current lending practices, we have banking deserts. We have lower lending rates in some areas. There are folks that are unbanked. There are folks that do not have equitable access to the current products that are on the market. So just thinking about even as we're creating and thinking about heirs property and products to support heirs property owners, there's still a need to think about where other bears may exist in certain communities. So the interest of time, may I request that we skip a couple slides here. So next slide and next slide, please. Next slide as well.

So just want to highlight, rather briefly, that there are many benefits to preserving and helping to resolve the issue of heirs' property, both for the families and for the community. Disease. And so it's, it's, it's a value that that we, you know, we want to protect the wealth that Scott and both Keith and Scott had mentioned, but also the when there's when their concentrations of the heirs' property, there are also implications for that community. And so having some of these many solutions that Scott mentioned, and considering some of these housing finance products, there are benefits for both family and community. Next slide, please. And I'll just highlight here very quickly that it's, there's been a lot of work done in the legal space and agricultural space, and then there's a lot of local, amazing work in the housing space. And so a collaboration across all of the sectors to be able to figure out how we work together to move this forward, how housing can learn from legal and agriculture is really important in this space. Next slide, please.

Kohanowski 1:15:47
All right, and then I'm going to keep this fairly brief because we want to give a little bit more time to our folks to ask questions. But so our CDFI Sustainable Neighborhoods has done a lot of work in creating a model in how to address these heirs' property issues, and it's mostly around lending. And it's, you know, it's just, how do you get a source of capital that's recoverable that you can deploy to address this issue? Next Slide. So, real quick, and Natasha already mentioned this. It's really to consolidate ownership, prevent foreclosure, whether it's like a reverse mortgage loan or property taxes, prevent scams, speculation, keeping people in their homes and communities, preserving critically intergenerational wealth, especially within Black communities, where a majority of familial wealth is held, and then just addressing that racial wealth and home ownership gap, Next, please. So we, through our subsidiary SN, we already have a lot of existing lending programs, and some of them we can, even already have, started to deploy to get funding for individuals who are largely locked out of traditional credit markets. So the equitable retention mortgage assistance program that's designed as non-amortizing, no interest, no cost loans. So those loans, we just give the money. Right now it's up to $50,000 and it just that sits as as a lien against the property. The homeowner doesn't pay any monthly payment or anything on that, but if the homeowner sells their property or refinances, then they have to give us that money back, and then we can redeploy it to the next person in line who needs that money. Our distressed mortgage relief program that's set up as a traditional convention mortgage loan. It's just they're affordable. There are very low-cost loans, but there is, you know, interest that's earned on those loans, monthly payments, that money, then we can also redeploy. We've closed that program for lack of capital. We've only made maybe 20 loans under that program. I wanted to talk about the New York State Homeowners Assistance Fund, that was federal code relief funds. That's sun setting. We're at the very end of that program. That was a half a billion dollars for homeowners affected by, New York homeowners affected by COVID. Those are set up as five-year forgivable loans. Again. There's no interest, no payments. After five years, they completely go away. The requirement there is that the homeowner has to live in that home for that five period, five-year period. They can't sell the home. If they do, then we can recover that money and redeploy it. So it's been very successful. So far, I think we've gotten about $8 million in repaid funds that we're able to redeploy. Other potential programs, home repair. Home repair programs have been problematic because a lot of the city and state agencies, they require very clear title in order to make those loans, and so heirs property and tangled titles have been locked out. So be great to develop a program we're kind of working on this right now to extend home repair loans to properties, heirs property to owner occupants who live in the property. Down Payment Assistance, sort of an opportunity to consolidate. Let's say you're an heir living in your family home, you need, you know, $200,000 to buy out the interest of the other people. You've never gotten a mortgage loan before. That's a creative way to get a loan and consolidate interest, and then we're working on developing other programs Next, please. Oh, and this is just a comparison of the Irma and the DMRP models, just to get that. And I think that's the end of my slides. So we have time for questions and answers.

Matthews 1:20:01
Thank you. Thank you. A huge thank you to Natasha, Keith and Scott for sharing with us today. Know that there's a lot of interest in this topic, and so I want to be able to jump right into questions. So if you do have any questions that haven't already been put into the Q & A box, please feel free to do so. I know that Scott and Natasha have been able to answer a couple of those questions, but some I'll just raise here as well. So first question is, can you explain in more detail how partition lawsuits work? Do they essentially just say, well, it's contested, so you both must sell, but only the spectators have the money to buy?

Kohanowski 1:20:36
Well, partition lawsuits are very, very complicated, and I don't think we really have the time right now to delve into it. But what was happening is, what was happening before we got into these law reform efforts, was that the third party would buy the interest they bring a partition action. It was never contested, because the heirs had a lot of times didn't even realize the lawsuit had been filed, because they weren't served adequately, and the court was just rubber stamping these these lawsuits on default. And so, the speculator could buy the property for their interest for $10,000 and walk away with a million dollar property for $10,000 but yeah, there's we've done a lot of presentations on the intricacies of partition law and how that's all changed, so it's probably better for another full CLE or full seminar.

Matthews 1:21:36
Another question is: The great migration highlights some of the unique challenges many black families face stay with land still owned and rural southern areas where mineral leases are selected, how can families who inherited land in rural areas, often as property, navigate the financial and legal constraints of outdated mineral leases that provide low fixed royalties?

Moodie 1:22:01
So yes, we've heard from a lot of rural partners that a lot of the there's the surface heirs and under-the-ground heirs, and how much that complicates issues. While that direct research is not a part of our specific work, we do have a lot of partners that look at these type of types of things, particularly in the Appalachian region and in the southeast. And so I can drop in this quest, in this the chats here, some of the links to those folks that we know work on those issues.

Wiley 1:22:35
Yeah, it does create complications. Yeah, like, like, kind of in fracking and stuff. I was in Pennsylvania, and they said it created complications about who owned what, when, where. It just makes it the royalties and the land, but then under the land, it's complicated, yeah,

Matthews 1:22:50
All right. Someone talked about the encumbrances from in post Second liens, how the verge, how they converge on the on predatory practices where the homeowner does not understand the implications of sharing the proceeds from the appreciation of properties.

Kohanowski 1:23:08
Yeah, and this is like a very, very specific thing. Let me do this question again. Yeah. So a lot of what we tried to do with our version of the Uniform Partition Heirs Property Act is get the court to rethink how it evaluates, how you know whether somebody you know lives in a property, whether they've been managing the property, they've been paying the taxes, they've been taking care of it, whether they've pulled money out of the property by, you know, putting other kinds of liens or encumbrances on it. And it used to be that the courts would ding that the occupants, or they'd charge them rent for the entire period that they're living in the property. And so it was another tactic that the speculators were able to use to strip all the wealth. And there's like, oh yeah, you lived in that property for 20 years, rent-free, so we're gonna say that, you know, we're gonna reduce your equitable interest by $500,000 to account for that rent. But these other encumbrances, I mean, now the courts are in New York, and I don't know how it's working, other places are taking a much closer look at who's benefiting how from the different liens and things that are put on there. Reverse Mortgages are a whole separate thing, and it's usually a lot of times when a senior takes out a reverse more, I never recommend reverse mortgages to our clients and only in very specific situations, because they're very expensive, costly loans, tons of like, really high origination fees and also insurance and things like that. So the equity in. A home gets taken by the bank very quickly, splits very quickly. And so if somebody does take out a reverse mortgage on their home, by the time they pass away, there's usually no equity left. And so, I mean, I kind of think it's a form of equity stripping by the banks. But the rare situations where there is still equity there, in order to sell the property, have to get all the heirs aligned to sell it. Otherwise it's just going to go to foreclosure. And if it goes to foreclosure, then we know that any kind there's a judicial sell with a partition or foreclosure, you only get about 60% of the fair market value, and so a ton of the equity there is lost as well, and it's whatever speculator bought that property out of the foreclosure process is the is the party that gains the benefit of that equity?

Matthews 1:25:53
The next question is, many people impacted by heirs' property or middle-class household that may have too high of incomes for income-restricted legal aid services, but for who, the cost of a lawyer may still be prohibited. Can you share more about how you form partnerships with law firms or with law schools provide pro bono services?

Kohanowski 1:26:13
Yeah. Well, in New York City, because property values are so high, medium income is so high, we have a much higher threshold for who qualifies, and also my old job. We were private. We weren't technically a legal services organization, were something else, and so we didn't have the same income limitations that other organizations do, like federally funded legal services, for example. And so if we saw a middle-income family come into the project and they couldn't afford legal services, we would still try to help them and provide the free legal services. But it is a problem for sure. I mean, we were successful in getting a lot of public attention about these cases with law firms and like the big, major law firms, and by stressing the racial equity issues involved here, and that was how we were able to get those resources. But these are, you know, litigating these cases are very expensive and they're very resource intensive, so it's a challenge, for sure, but I don't know if Natasha or Keith has anything more to add to that.

Moodie 1:27:26
I would just say, we are not attorney. We're not a legal organization. We should not and do not give legal certain legal advice, but we did partner with community legal services and help CDC in Central Florida and the work that they've done to partner with Florida A and M University and with many pro bono attorneys in the region to support he's property owners there. So I would recommend looking at their practices as well, because they've been very successful in the state of Florida and doing that work.

Matthews 1:28:00
And this will be our last question. I'm sorry everyone, but on the preventative side, have you engaged with housing counselors or realtors to include conversations about protecting homes from becoming heirs' properties, for example, estate planning as part of the purchasing process?

Kohanowski 1:28:15
Yes, and that's a great question. We've been doing a lot of work. We've been getting private and government funding to support legal housing counseling, support housing counselors all throughout New York City and New York state to make to be first of all, train housing counselors to be aware of the heirs, property, table, title issues, that they can identify them and then refer them to legal services if it's necessary. But also, you know, educating homeowners about the importance of getting an estate plan in place and how to do that. So that's something that we're very aware of and we're actively working to not just get funding, but also distribute the funding we're getting.

Matthews 1:29:03
Thank you again. Thank you to sorry, Keith. Did you have something to add?

Wiley 1:29:07
Oh, no. I was just going to say that's one of the challenges that this heirs' property is a dynamic thing. It's ongoing. So it's like, you can never really get your head around it, because it could happen tomorrow to somebody. It's a preventative element to it.

Matthews 1:29:20
Thank you. I want to make sure there's no other questions.

Kohanowski 1:29:23
One of the questions that came up, people keep asking if they'll be able to see this presentation afterwards, or get the materials.

Matthews 1:29:31
And yes, yes, thank you, Scott. I was definitely going to mention that. So the webinar has been recorded. We will send a link to the recording and a transcript of the recording to everyone that registered to attend, so that will be sent to you. Our panelists also actually created a one-pager, so with all the key points that they were mentioning in their slide decks or in the presentation, that you're able to then use the. That to talk about it with those in your community, those within your organization, even with for your own personal use. So want to make sure you have access to that information as well. And it seems like there are a lot of questions. Some have been like I said, have been answered in the Q and A box. So please look to see if your question was answered. If not, feel free to reach out to me, and I can make sure that we provide I sent over the questions to our panelists that they're able to answer the question for you. And, like, just because we've seen what the great response has been to the information shared today, you know, we might want to discuss, like, having a part two to this, to make sure that we're able to get to some of these other key points that you guys have all talked about today. So again, thank you all for being with us. Thank you again to our panelists, Natasha, Keith and Scott, for spending some time with us today. They put a lot of effort into creating this and being with us. So thank you again, and we look forward to seeing you at another Just Economy Conversations. Have a great day everyone!

Thank you.

Thank you.

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