Elizabeth Shay, Esquire

Homeowners Assistance Program Coordinator SeniorLAW Center

Joanna Jarzebowska, Esquire

Conwell Community Corp Fellow

Top Ten Legal Tips for Homeowners

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Top Ten Tips1. Legal help for housing issues: SeniorLAW Center and

SeniorLAW Helpline.

2. If your name isn’t on the DEED, take action!

3. If you own a house, make a Will.

4. Beware of Liens!

5. Protect yourself from theft of your home.

6. Don’t be swindled when you buy a house.

7. Prevent home repair fraud!

8. Having trouble paying your mortgage? Act immediately!

9. Alert! Beware of Mortgage Modification Scams.

10. When might a reverse mortgages be a good idea?

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Tip 1: Legal help for housing issues: SLC and SeniorLAW Helpline.

• Largest provider of legal services to seniors in Pennsylvania

• Independent non-profit organization

• Serving over 10,000 seniors each year with: • direct individual representation• legal advice, information & referral services• community legal education• professional training• systemic reform

• Legal staff and pro bono panel

• Celebrating over 30 Years of Service

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Over 10 Special Projects:

Homeowners Assistance Program Project S.A.F.E. (Stop Abuse & Financial Exploitation) Serving Older Women Victims Of Violence & Sexual Assault Kinship Caregiver Network (Grandparents/ elders raising children) Fostering Connections to Kinship Care (DHS, abuse and neglect) Community-Based Legal Services, including home and hospital

visits and neighborhood legal clinics throughout Philadelphia Protection For Older Consumers The Hospice and Home Care Legal Project Planning To Age With Dignity & Independence Asian Elderly Legal Project Legal Services For Hispanic Elders

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Pennsylvania SeniorLAW HelpLine 1 877 PA SR LAW (1-877-727-7529)Statewide SeniorLAW HelpLine provides free legal advice,

counseling and information on any civil legal matter.

Home Assistance ProgramFree legal advice, information, referrals, representation

and education to Philadelphia homeowners 60 and olderEstate Administration and WillsHome Repair Contractor FraudProperty DamageMortgage ForeclosureDeed Transfers and Tangled TitlesCode Enforcement, Utilities, Real Estate Tax Liens

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Tip 2: If your name isn’t on the DEED, take action!

Title is the legal concept of property ownership.

A deed is a legal document that confirms a person’s ownership of property, or that the person has title to the property.Possession and payment of real estate taxes and mortgage

is not enoughProperty may be owned by a single person, or by multiple

persons

Where to get a copy of a Deed:Department of Records in City Hall, Room 154.The copies cost $2 per page. Most deeds are four pages or

less.You can call 215-686-2296 to find out when the office is open.

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A Deed

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Why is it important to have title?

Ability to enter payment plans for back real estate taxes and water bills

Access to home repair programs for low-income homeowners

Ability to take out a mortgage or negotiate modifications of existing mortgages

Ability to sell the property

Ability to leave the property to someone in your Will

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What is a “tangled title” and why is probate important

Tangled Title is a phrase used to describe problems related to legal ownership of real estate.

If you live in a home and consider yourself the homeowner, but your name is not on the deed, you may have a tangled title.• Family Owned Properties: Problems occur when the

homeowner passes away and family members continue to live in the home without transferring title.

• Lease/Purchase or Rent-to-Own Agreements: Buyer and seller agree that buyer will pay for the house in installments while living in the property. When all payments are made, seller will transfer title to the buyer.

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Example 1: Family Owned Property: There was a Knock on

the Door Harvey owned a house and lived in it with his wife, Wilma. (Wilma

was not named on the deed.) Harvey died unexpectedly and did not leave a Will. Wilma continued to live in the house.

10 years after Harvey died, Wilma received court papers. The city was foreclosing on the house because of unpaid real estate taxes. Wilma called the city and was told that only the owner can prevent the sale by entering into a payment plan for the back taxes.

Wilma went to an attorney to have her name put on the deed to the house. The attorney explained that because Harvey did not have a Will, the state law controls how Harvey’s property passes after death. Harvey’s two children with Wilma and his five children from a prior marriage all have ownership interests in the property.

The only way for Wilma to be the sole owner is to have all of the

heirs transfer their interests in the property to her. Wilma has never met some of her stepchildren and has no way to locate them.

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Prevention and Solution:Homeowners should:

Write a Will to decide in advance who gets the house

Probate estate of record owner as soon as they dieIf some heirs of the record owner do not want to

keep their interests in the property, they should sign a deed giving away their interests as soon as the record owner dies

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Example 2: Lease Purchase: Renee and Olivia

Renee is renting Olivia’s property. Olivia offers to sell the property to Renee and will accept installment payments of the purchase price. Renee agrees and signs the installment sales agreement.

Renee makes payments for 15 years and continues living in the property. Renee makes repairs and improvements to the property. After the final installment payment, Renee calls Olivia and asks when she will transfer the deed to her.

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Example 2: Renee and Olivia (cont.)

Scenario 1Olivia tells Renee that she is willing to transfer the deed,

but there is a mortgage on the property which Olivia took out after Renee started making her installment payments. Olivia has been paying the mortgage but can no longer afford to do so once Renee stops paying her installments.

Scenario 2After Renee makes her last payment, Olivia tells her the

property taxes have not been paid and the city wants to sell the property.

Scenario 3Renee has been making payments, but after nine years

the payments start coming back in the mail. Renee drives out to Olivia’s house and discovers she has moved and Renee has no information where Olivia is now living.

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Prevention/Solutions: Lease-purchase or rent-to-own

agreementMake every effort NOT to enter into these agreementsMake sure agreement is with the real owner of the propertyThe agreement should be in writing

include the property address, signed by the parties, especially the seller, and state how much is to be paid and for how long

Notarize and record original agreement with the Department of Records

Keep ALL receipts, such as payments, repairs, improvementsQuiet Title Action in Common Pleas Court

Settlement or Judicial Order Negotiate with the record owner to get title signed over

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Tip 3: If you own a house, make a Will.

The Will designates who gets the house and other property when the owner dies.

A Will is valid if the person writing it is:• At least 18 years old• Mentally competent and• Acting voluntarily

• Person must understand what property they own and must identify who will receive the property when they die.

• The Will must be signed by the Testator and by 2 witnesses.

BEWARE: Do not add relative’s name to the deed instead of writing a Will!

Example:Mary owned her house and lived in it with her son, James. Mary went to a

lawyer and had James added to the deed. Two years later James ran up gambling debts and his creditors petition the court to have the house sold and the debts paid. Mary could become homeless as a result of adding her son to the deed.

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What happens if homeowner does not have a will?

Pennsylvania intestacy law determines who “inherits” their propertyEXAMPLE The grantee on the last recorded deed is John Owens. This makes

John the sole owner of the property. John dies survived by his wife, Mary, and their three children, as well as two children from an earlier relationship. When John dies, Mary inherits a 50% interest in the property, and each of John’s five children inherits a 10% ownership interest. The title to the house is now tangled.

The intestacy laws do no apply if a deed includes “survivorship” rights. Ownership passes to the remaining owners who are still alive The last owner to die becomes the owner of the property

EXAMPLE The grantees on the last recorded deed are brothers, John, Paul and

Tim, with right of survivorship. When John dies, he is survived by his wife and children. Paul and Tim are also alive when John dies. Paul and Tim become owners of the property. John’s wife and children have no legal right to the property. John’s Will cannot change the ownership rights stated in the deed.

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Tip 4: Beware of Liens! A lien is a debt on your home. It can result from:

• A delinquent mortgage• Unpaid water and sewer bills• Unpaid property taxes• Unpaid construction costs that improved your property

If lien is not paid, the creditor can go to court to foreclose and sell your home

The homeowner whose mortgage, water bills or taxes have become delinquent must take immediate action to prevent foreclosure. OPEN YOUR MAIL! Seek help immediately! Philadelphia has a network of housing

counselors paid by the city to offer you budgeting advice. Contact your creditors and apply for hardship payment plans Contact an attorney or a legal services provider, such as SeniorLAW

Center If you are not the legal owner of the property, find out what options

you have.

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MORTGAGE DELINQUENCIES If you have fallen behind on your mortgage or you foresee a

financial crisis call the Save Your Home Philly hotline at 215-334-HOME (4663). You will be assigned to a housing counselor who can help you negotiate with your mortgage company.

WATER/ SEWER LIENS For unpaid water/sewer bills: contact the Water Revenue

Bureau at 215-686-6880 and ask to apply for the Water Revenue Assistance Program (WRAP). You must live in the property and be within the income guidelines.

REAL ESTATE TAXES For unpaid property taxes: contact the Philadelphia

Revenue Department at 215-686-6442. They can help with property tax and rent rebate applications, low income payment agreements and hardship agreements.

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Past Due Property TaxesCollection of past due Philadelphia property tax bills is handled by

the Philadelphia revenue department and by two collection firms: Linebarger, Goggan, Blair, & Sampson, LLP call 215-790-1117 Goehring, Rutter & Boehm Law call 215-735-1910

To find out who is collecting your delinquent taxes, call the Philadelphia Property Tax Agreements office at 215-683-5279 or anthony.barreca@phila.gov

Philadelphia has stepped up efforts to collect past due tax bills. If you are receiving collection notices, contact the collection

agency immediately. If Taxpayer defaults on two repayment agreements, the City

may proceed with foreclosure and sheriff sale of property.

BEWARE: DO NOT AGREE TO PAY AN AMOUNT YOU CAN’T AFFORD!! Ask for a hardship plan!

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Financial Hardship Agreements for Past Due

Taxes Allow low income taxpayers to pay off past due balances in installments Monthly payment determined on a case by case basis. Standard offer: 24 months. Low income plans: Household income is

< 30% AMI (one person, $1363 per mo), pay 5% of income >30% but < 50% AMI (one person, up to $2271 per mo), pay 8% >50% but <60% AMI (one person, up to $2725 per mo), pay 10%

Individual Financial Assessment Minimum payment: $25. In addition, taxpayers must pay current real

estate taxes.Example: Sally owes $6131 for property taxes from 2005 to 2011. She received a

letter and called the collection firm. Sally was told over the phone that she was eligible for a monthly repayment amount of $287.21. Sally receives $718 Social Security and knew that she could not pay but she said nothing. A few days later an agreement came in the mail. Sally then called us and we contacted collection agency and gave them her income and expense information and she received an agreement to pay $25 per month.

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Where to apply for a payment plan in person!

Past Due Property Taxes:If you have received a collection notice from the City:    Municipal Services Building

   1401 John F. Kennedy Boulevard - Concourse Level   Monday - Friday 8:30am - 5:00pm

If you have not received any collection notice:  Municipal Services Building

   1401 John F. Kennedy Boulevard - Concourse Level   Monday - Friday 8:30am - 5:00pm

  North Philadelphia Municipal Services Center (no cash accepted)   Hope Plaza   2761 N. 22nd Street

Northeast Municipal Services Center (no cash accepted)   9239 (rear) Roosevelt Boulevard   Philadelphia, PA 19114

Payment Plans for Current Year Taxes: All three sites will help with payment plans.

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Tip 5: Protect yourself from theft of your home

How does a house get stolen?Owner is absent from the property

hospitalization, incarceration, military deployment, or death of owner

Owner’s name is forged on a deed transferring ownership to another person

Ownership is “tangled.” Beware of installment sale agreement!

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Example 3: That’s MY House!

Sam lived in the same house for 30 years. At 78, he was living alone and doing well until he had a bad fall and broke his hip. Sam had to spend 2 weeks in a hospital and 1 month in a rehab facility.

When Sam finally returned to his house, he found a family he didn’t know living there -- the Kirbys. Mr. Kirby told Sam they bought the house from Jack for $200,000 three weeks ago.

Sam contacted a lawyer and found out that Jack transferred the property to himself by forging Sam’s name on the deed. Then Jack sold the property to the Kirbys.

The Kirbys do not want to leave the house and Sam has nowhere to go.

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Prevention & Solution: Fraudulent Deeds

READ ALL MAIL!. If city sends a notice that a deed has been recorded for your

property or if you stop receiving the tax bill: Investigate!SOMEONE MAY HAVE STOLEN THE HOUSE!

NEVER LET YOUR HOME APPEAR ABANDONED!Ask a neighbor to collect mail, mow grass, and shovel snow

AVOID INSTALLMENT SALES AGREEMENTS!Read carefully and record!

IF HOUSE IS STOLEN: Seek legal advice immediately!

Create “clouds” on titleBig problem for owner if mortgage is taken out by thief

Lawsuit – expensive Quiet Title Action in Common Pleas CourtSettlement or Judicial Order

Check with District Attorney if they are investigating the theft

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Example 4: Forged Deed Jane bought the fixer upper next to Albert’s house intending to rehab it.

The repairs were too extensive and Jane offered to sell the house to Albert. They signed an installment sales agreement.

Albert made the monthly payments while he renovated the house. Albert’s last installment payment was returned because Jane had moved and left no forwarding address. Albert could not find Jane to get the deed.

Albert rented the property to Susan. Susan paid rent for a few months and then stopped. She refused to move out. Albert was unable to evict her because he was not the record owner.

Susan discovered that Jane was the owner of the house and Albert did not have a deed. Susan recorded a new deed indicating that Jane died and identified herself as Jane’s daughter and heir. Susan became the record owner!

Susan fraudulently transferred the property to herself. Using the fraudulent deed, Susan obtained four mortgage loans on the property.

With the help of the police Albert was able to find Jane. Albert filed a quiet title action against Susan and Jane appeared as his witness. The court gave Albert title to the house and voided the deed to Susan. The mortgage liens were also voided by the court.

Albert won his case but it was an expensive and long process.

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Tip 6: Don’t be swindled when you buy a house.

Buyers BewareDo Your Homework –

Find out who is living in the houseAre they tenants or do they claim to own the property?

Make sure seller is listed as the grantee on the last deed recorded for the property. Dep. of Records, City Hall, Room 154

Title Report: informs you of any liens on the property Title Insurance: protects the buyer from undiscovered liens.

If it seems too good to be true, it probably is.

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Tip 7: Don’t be a victim of home repair fraud!

When hiring a contractor: Investigate• Hire a contractor you trust. If something makes you

uneasy, keep looking! Get written estimates from at least three licensed

contractors and compare. Check that the contractor has all required licenses before

hiring. Call Department of Licenses and Inspections-Licenses Issuance Unit at 686-2490.

Verify that the contractor is registered with the Pennsylvania Attorney General’s Office. Call 888-520-6680 or visit the website at www.attorneygeneral.gov

Confirm that contractor is insured and that he will obtain all required construction permits.

Read the entire contract before signing.

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Home Improvement Consumer Protection Act

(HIPCA)If price is $500 or more: Contract must be in writing AND have contractor registration

number. It must be signed by homeowner and the contractor Approximate starting and ending dates Description of work and materials to be used – changes MUST

be in writing and signed by both parties Total price

Names, Addresses and Telephone Numbers for all Subcontractors Contact information for the Contractor The Toll Free number for the PA AG Bureau of Consumer

Protection The amount of any down payment Notice of right to rescind within 3 business days Customer must be given COPY at time contract signedIf price is $1000 or more:

Contractor cannot require a deposit in excess of 1/3 of the contract price

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Home Improvement ActProhibited Acts

Failure to make refund within 10 days after receiving certified written request if:No substantial work performed, and45 days have passed since start date

Contractor materially deviates from plans or specifications without a written change order that contains the price change for the deviation

No verbal changes, even on small projects

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Example 5: Out of Court Settlement

Senior responded to ad for “government insured loans” for home improvements

New Jersey construction company called her back and told her they would provide contractors to do the work and provide financing for job, possibly with a reverse mortgage on her home.

Contractor inspected Senior’s home. Price to remodel her kitchen and bathroom: $30,000. Senior told the contractor she could not afford the repairs

The contractor arranged for the house to be appraised and the appraisal submitted to a reverse mortgage broker. The senior never agreed to apply for a reverse mortgage and never authorized an appraisal

Senior told the contractor she did not want to make the renovations

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Out of Court Settlement (Cont.)

The contractor responded that she was in breach of their contract – and demanded $1500 from the senior as payment for the appraisal and remodeling plans

Senior contacted a private attorney who offered the contractor $50 per month – rejected by contractor

SeniorLAW Center interviewed the client, reviewed the work We sent a letter to the contractor reciting the provisions of the

Home Improvement Consumer Protection Act that he had violated:No starting or completion datesNo specifications of work to be performed or materials to be

used No toll free number for AG

Contract was rescinded Client paid nothing to the contractor.

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Tip 8: Having trouble paying your mortgage? Act

Immediately!A mortgage is a contract between a borrower and a lender

that guarantees repayment of a loan. We call this a “secured debt” because if the loan is not repaid, the house, which is the “security,” can be sold.

A borrower whose mortgage becomes delinquent must act immediately to save his house from being foreclosed!

A typical timeline for a foreclosure in Pennsylvania:

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Mortgage foreclosure timeline

1/2/2012 January payment becomes past due. 2/2/2012 February payment becomes past due. Account is now due for 2

payments. 3/2/2012 March payment becomes past due. Account is now due for 3

payments. 3/5/2012 Lender sends the Notice of Intent to Foreclose (Act 6 Notice) to

mortgagor. If applicable the lender will also send Act 91 Notice to mortgagor 4/8/2012 Act 6 and Act 91 Notices have expired - Lender refers account to

Foreclosure attorney. 5/8/2012 Foreclosure attorney begins the legal process by filing a "Complaint"

at the county courthouse. 6/23/2012 Mortgagor does not respond to the complaint. A" Default Judgment"

is entered. 6/25/2012 Sheriff’s office schedules a "Sheriff Sale" date. 7/25/2012 Notice of "Sheriff Sale" is sent to each mortgagor on the loan. 8/25/2012 "Sheriff Sale" is held. 8/27/2012 Sheriff prepares and records a deed conveying title to the purchaser.

If a third party does not purchase the property, the deed will convey title back to the lender.

8/27/2012 Eviction process begins if mortgagor still resides in the property.

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Mortgage Modification Don’t wait to hear from your mortgage company!

Philadelphia borrowers who fall behind on their mortgage payments: Call Save Your Home Philly hotline immediately!

215-334-HOME (215-334-4663) Borrowers will be assigned to a housing counselor paid

for by the city to advise them on modification options. Borrowers sued for foreclosure are given an opportunity

to meet with their lender in court to attempt a modification of their mortgage.

Home Affordable Modification Program:The goal for most mortgage modifications is to reduce the

borrower’s housing expense to no more than 31% of the household income.

The “housing expense” includes the mortgage principal and interest, plus the property taxes and homeowners insurance.

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Tenants Rights in Foreclosed Properties

If the tenant is not related to the homeowner and pays rent under a lease for a residential dwelling, then

There is a 90 day pre-eviction notice requirement

Tenants may continue to occupy the property until their lease ends but the lease may be terminated with a 90 day notice if the new purchaser plans to reside in the property.

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Tip 9: Alert! Beware of Mortgage Modification

ScamsLoan modification scammers can trick a homeowner out of their

money and even their home.

BE SUSPICIOUS IF SOMEONE PROMISES TO :

Save home from foreclosureObtain a loan modificationGet extension on time to cure a default, orArrange a short sale or deed in lieu of foreclosure  

Avoid any organization or person who:• Asks for a fee in advance• Guarantees they will stop a foreclosure on a home or that they will

modify a loan• Tells you to stop paying your payments to your mortgage company

and to pay them instead.

Call 215-334-HOME (4663) for loan modification guidance or to report a scam.

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Example: 6 modification scam

Beth received an unsolicited telephone call from a company representing itself as Mortgage Solutions. The representative told Beth that if she mailed them $800, the company would contact her mortgage company and obtain a modification of her mortgage. Mortgage Solutions guaranteed that her monthly payment would be reduced from $650 to $350.

The agreements Mortgage Solutions sent to Beth told a very different story. One agreement states that it is only providing a “products package” for homeowners to pursue a modification on their own; the other agreement says that it will contact the lender but there is no guarantee of a modification.

Beth waited three weeks and then contacted her mortgage company. The company had no record of being contacted by Mortgage Solutions and had not received any payment. The senior paid $800 or 90% of her monthly income to Mortgage Solutions and received NO benefit AND she lost valuable time in applying to legitimate modification programs.

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Tip 10: When might a reverse mortgage be a good

idea?What is a Reverse Mortgage? A financial product available to homeowners age 62 or older

whose house is worth more than the liens against it. It converts the homeowner’s equity into cash which is then

“loaned” back to the homeowner. The loaned funds do not get repaid until the homeowner dies,

or stops living in the home for 12 months or sells the house. The amount the homeowner receives depends on value of

house, the age of homeowner (the older you are the more you receive), and interest rate on reverse mortgage.

The Benefits: The amount received can be paid out in a single payment,

regular monthly payments or as a line of credit. There are no monthly repayments. The amount owed can never be more then the home’s worth at

the time of repayment.

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Reverse Mortgages: disadvantages

Because you make no repayments, interest is added to the loan balance and your debt gets larger and your home equity decreases.

The homeowner must keep the house in good repair and must continue to pay real estate taxes and insurance. If not, lender may foreclose.

The fees to obtain a reverse mortgage average about $8000.

If the homeowner receives SSI or Medicaid, the cash received may make the homeowner ineligible for public aid.

When time comes for repayment, the homeowner or his heirs must repay the loan if they want to keep the house. There is some protection for widows who may have the right to repay the loan by tendering 95% of the home’s fair market value.

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Home Equity Conversion Mortgage (HECM)

HECM Standard: is a reverse mortgage that is insured by the federal government. It usually provides the largest amount of cash and can cost less then other reverse mortgages.

HECM Saver: an option for homeowners who wish to borrow a lower amount for a shorter period. Lower upfront fees and interest is charged. Example: when a home owner needs a small loan to

renovate the house and plans to move out within a few years.

For information on reverse mortgages, call AARP/Reverse Mortgage Counseling Services at 1-800-209-8085.

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ResourcesTo find an Attorney or Obtain Legal Advice:

Philadelphia Legal Service Agencies (Call for intake procedure)Philadelphia Legal Assistance: 215-981-3800Community Legal Services: 215-981-3700SeniorLAW Center: 215-988-1242

SeniorLAW Hotline – statewide: 1-877-727-7529Must be 60 and over, no income limits

Philadelphia Bar Association’s Lawyer Referral and Information Service: 215-238-6333Connects callers with private attorneys in Philadelphia; not

free legal services

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ResourcesPennsylvania Attorney General’s Office

www.attorneygeneral.gov

AG’s Elder Abuse Hotline: 1-866-623-2137Call to report abuse or consumer fraud

Determine if a home-repair contractor is registered: http://hicsearch.attorneygeneral.gov/

City of PhiladelphiaDepartment of Records, Reference Division: City Hall Room 154

Research property records, obtain copies of deedsRegister of Wills: City Hall Room180

Raise an estate, determine if an estate has been opened

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Questions?Elizabeth Shay, Esq.

Homeowners Assistance Program

SeniorLAW Center

215-701-3207

Joanna Jarzebowska, Esq.

Conwell Community Corp Fellow

SeniorLAW Center

215-701-3216

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