Harris County – Foreclosures are back, after a year’s delay by executive orders
An article in the Houston Chronicle on foreclosures being processed again after the pandemic induced executive orders postponing foreclosures.
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https://www.houstonchronicle.com/business/article/Foreclosures-are-back-in-Harris-County-after-a-16217297.php
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Month after month for more than a year, Harris County postponed its foreclosure auction as the pandemic raged and unemployment soared. Tuesday morning, to the surprise of investors, homeowners and lawyers, the auction was back on.
For Chase Caesar, the unexpected news threw her living situation into question. A renter who lives in Cypress with her son and elderly father, she said she learned her home was danger of foreclosure — even though she was paying rent in full — when investors started stopping by the property and looking through the windows in September.
Since then, she has taken to tracking the executive orders canceling foreclosures. She worried that a sale will throw her lease into jeopardy and push her into a hot housing market, where it could be difficult to find a house that would keep her son in the same school and stay close to her dad’s family. But despite her habit of scouring the county’s website for the latest updates, she was unsure if June’s auction would take place until it was already underway.
Citing health concerns, Harris County Judge Lina Hidalgo had been quietly postponing real estate foreclosures through executive orders, shutting down the facility where those auctions are held and providing relief to struggling homeowners. That came to an end Tuesday, shortly after she had downgraded the county’s COVID threat assessment from the highest level, red, to the third highest, yellow. The decision came as quietly as the postponements — instead of announcing the change, she simply stopped issuing her monthly executive order canceling the upcoming auction. Hidalgo’s office has not responded to a request for comment.
At Tuesday’s auction, the second since COVID was detected in the county in March 2020, hundreds of properties were for sale. The list included many homes being foreclosed on by homeowners associations, which were not impacted by foreclosure moratoriums, as well as commercial properties.
The foreclosed properties went on the auction block at a time when home inventory is at a record low and many investors, who pooled together money in search of assets distressed by the recession, are looking for opportunities.
Bidders crowded under a pavilion at the Buffalo City Event Center. Masked and unmasked, they clutched clipboards, tablets and laptops filled with lists of properties to bid on. Some wore earpieces — “stay there” barked one man into his headphones while texting furiously — and others rushed through the crowd, clutching cashier’s checks. They clustered around the auctioneers, trying to hear over the din which address was going for what price. Chairs spaced at six-foot intervals were largely ignored, except by first-timers observing the action and those taking a break to regroup.
“Since the inventory is low, what we have here is a panic-buying situation,” said Reggie Nelson, a real estate broker who also flips and rents houses. “They’re overpriced now.”
But Lonese Herbert, who was scoping out the auction for the first time, felt differently. As a real estate agent, she could pull up what what homes being auctioned off had previously sold for. “This last one, it said the initial purchase price was $425,000,” she said. “And today it sold for $266,000. That’s a deal.”
Conflicting emotions swirled around the first auction in a year. Some believed the auctions should resume. The hard money lender Texas Funding Corp., for example, sued the county in March, arguing that postponing foreclosures due to health concerns conflicted with the governor’s removal of occupancy limits on local government operations. (A district court judge sided with the county, and Texas Funding is appealing the decision.)
Others had hoped for more time. Amir Befroui, managing attorney for the nonprofit Lone Star Legal Aid’s Foreclosure Prevention Project, pointed out that money from the CARES Act that could have helped homeowners avoid foreclosures has not yet been dispersed by the state. Texas Emergency Mortgage Assistance Program, TEMAP, released its guidelines the day of the auction.
Not only that, but because Hidalgo usually issued her executive orders canceling foreclosure auctions days before they were scheduled to take place, his team did not realize that June’s auction was moving forward until the Harris County Tax Assessor posted on Facebook on Friday at 2:35 p.m., announcing the foreclosure auction for delinquent property tax sales would be taking place the next business day.
That, said Befroui, made it very difficult to take legal action on behalf of homeowners who are being wrongfully foreclosed on. Following the holiday weekend, the district court would only be open for two hours before the auction began to approve an order temporarily restraining a home from being sold.
“(The protection) coming to an end on a holiday weekend, where the foreclosure Tuesday is literally the day after Memorial Day — I don’t have a word for it, but it’s not good,” he said.
The short notice also meant that not all homes in danger of foreclosure were sold at Tuesday’s auction. Texas law requires written notice 21 days before a home goes to auction, and many notices had not been sent out. As lenders, homeowners associations and taxing entities prepare for upcoming auctions, more homes will likely be noticed for foreclosure, especially if protections against foreclosure for homes with federally backed mortgages expire at the end of June, as is currently scheduled.
At Tuesday’s auction, bidders leaped after a year of inaction.
When a house in Kashmere Gardens went for sale for $13,000, it was quickly bid up, as a woman in a flowing top and a man with a ponytail fought for the home. It went for $78,000.
Ceasar, meantime, remains in limbo. The house she rented was on the list to be auctioned, but as of Tuesday evening, she had yet to hear whether it had sold.