How Is That Legal?: Breaking Down Systemic Racism One Law at a Time

Locked Out of Wealth

July 20, 2022 Season 1 Episode 5
Locked Out of Wealth
How Is That Legal?: Breaking Down Systemic Racism One Law at a Time
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How Is That Legal?: Breaking Down Systemic Racism One Law at a Time
Locked Out of Wealth
Jul 20, 2022 Season 1 Episode 5

For many Black and Brown homeowners, their dream of homeownership disintegrates into a uniquely American nightmare designed to extract wealth and lock them out of economic mobility. 

Attorney Rachel Gallegos and Councilmember Katherine Gilmore Richardson join us to discuss racial disparities in homeownership, the bureaucratic saga that unfolds when homeowners pass away, and changes needed to preserve Black and Brown intergenerational wealth. Councilmember Gilmore Richardson also shares her own family’s struggle to untangle their titles and save their family homes. 


Rachel Gallegos (@RKG80) is a Senior Staff Attorney in the Homeownership and Consumer Rights Unit at Community Legal Services of Philadelphia. Prior to joining CLS, Ms. Gallegos was a law clerk to the Honorable John T. McNeill, III, in the Camden County Superior Court and the Honorable Annette M. Rizzo (Ret.) in the Philadelphia Court of Common Pleas.

Katherine Gilmore Richardson (@CouncilwomanKGR) is serving her first term as Councilmember At-Large for the City of Philadelphia. She is the youngest woman ever elected citywide and the youngest African American woman ever elected to the Philadelphia City Council. Councilmember Gilmore Richardson successfully championed legislation to require funeral homes to provide a guide to heirs so they understand their rights and how to keep their family home. 

If you enjoy this show and want to help fight poverty and injustice, consider making a donation to Community Legal Services today! You can also follow us on Twitter @CLSphila to stay connected.

How Is That Legal is a podcast from Community Legal Services of Philadelphia and Rowhome Productions. Jake Nussbaum is our Producer and Editor. Executive Producers are Alex Lewis and John Myers. Special thanks to Caitlin Nagel, Zakya Hall, and Molly Pollak. Music provided by Blue Dot Sessions.

Support the Show.

Show Notes Transcript

For many Black and Brown homeowners, their dream of homeownership disintegrates into a uniquely American nightmare designed to extract wealth and lock them out of economic mobility. 

Attorney Rachel Gallegos and Councilmember Katherine Gilmore Richardson join us to discuss racial disparities in homeownership, the bureaucratic saga that unfolds when homeowners pass away, and changes needed to preserve Black and Brown intergenerational wealth. Councilmember Gilmore Richardson also shares her own family’s struggle to untangle their titles and save their family homes. 


Rachel Gallegos (@RKG80) is a Senior Staff Attorney in the Homeownership and Consumer Rights Unit at Community Legal Services of Philadelphia. Prior to joining CLS, Ms. Gallegos was a law clerk to the Honorable John T. McNeill, III, in the Camden County Superior Court and the Honorable Annette M. Rizzo (Ret.) in the Philadelphia Court of Common Pleas.

Katherine Gilmore Richardson (@CouncilwomanKGR) is serving her first term as Councilmember At-Large for the City of Philadelphia. She is the youngest woman ever elected citywide and the youngest African American woman ever elected to the Philadelphia City Council. Councilmember Gilmore Richardson successfully championed legislation to require funeral homes to provide a guide to heirs so they understand their rights and how to keep their family home. 

If you enjoy this show and want to help fight poverty and injustice, consider making a donation to Community Legal Services today! You can also follow us on Twitter @CLSphila to stay connected.

How Is That Legal is a podcast from Community Legal Services of Philadelphia and Rowhome Productions. Jake Nussbaum is our Producer and Editor. Executive Producers are Alex Lewis and John Myers. Special thanks to Caitlin Nagel, Zakya Hall, and Molly Pollak. Music provided by Blue Dot Sessions.

Support the Show.

Kee Tobar (00:05):

Hello everyone, and welcome to How Is That Legal, the podcast where we break down examples of systemic racial inequity in the law and policy and talk to experts whose stories of injustice will make you ask, how in the world is that legal? I'm your host Kee Tobar. I'm a legal aid attorney, history enthusiast, and chief equity and inclusion officer at Community Legal Services of Philadelphia.

Kee Tobar (00:27):

Today, we're talking about the bureaucratic nightmares and tangled titles, which lead to racial disparities in home ownership and the stripping of Black wealth. I'm excited to welcome two amazing guests, Rachel Gallegos, senior staff attorney in the homeownership and consumer rights unit at Community Legal Services, and Philadelphia councilmember Katherine Gilmore Richardson. Katherine Gilmore Richardson is serving her first term as council member at large for the city of Philadelphia. She is the youngest woman ever elected citywide and the youngest African American woman ever elected to Philadelphia City Council. Her legislative focus is addressing the city's ongoing recovery from COVID-19, upskilling and reskilling the workforce, supporting local, small and minority owned businesses and environmental justice. Notably Council Member Gilmore Richardson successfully championed legislation to require funeral homes to provide a guide to heirs so they understand their rights and how to keep their family home. A lifelong Philadelphian, Gilmore Richardson is a graduate of the Philadelphia High School for Girls and West Chester University.

Kee Tobar (01:30):

Rachel Gallegos is a senior staff attorney in the homeownership and consumer rights unit at Community Legal Services. Prior to joining CLS, she helped create the nationally renowned mortgage foreclosure diversion program for the First Judicial Court in Philadelphia, and went on to become the administrator of that program. Ms. Gallegos is also a board member for the Public Interest Law Center of Philadelphia, past chair of the real property section of the Philadelphia Bar Association, and past president of the Hispanic Bar Association.

Kee Tobar (01:59):

Together, we will discuss tangled titles as an aspect of discriminatory housing policy, racial disparities in home ownership, and changes needed to preserve Black and brown intergenerational wealth. So let's go to the interview.

Kee Tobar (02:16):

Welcome Attorney Rachel Gallegos and Councilwoman Katherine Gilmore Richardson. I'm excited to have you both on the show and to talk to you about racial disparities in home ownership, and specifically how tangled titles strip Black families of their intergenerational wealth. First, can you introduce yourselves and share some of your background with the audience, and we'll start with Rachel.

Rachel Gallegos (02:37):

Wonderful. Thank you so much for having me on this podcast, it's my first podcast experience. I'm really excited. I'm Rachel Gallegos. I'm an attorney at Community Legal Services here in Philadelphia, and I work in our home ownership and consumer rights unit. My focus is primarily on mortgage foreclosure defense and tangled titles, which we'll get into more I'm sure today.

Kee Tobar (02:59):

Awesome. Thank you. And for CLS, you meant Community Legal Services, correct?

Rachel Gallegos (03:04):

Yes, yes.

Kee Tobar (03:05):

No problem. You, Councilwoman?

Katherine Gilmore Richardson (03:08):

I'm council member Katherine Gilmore Richardson, currently serving my very first term as a member of Philadelphia City Council, also chair of city council's committee on the environment and member of the housing committee. And so I started out in government as an intern and a volunteer when I was 15 years old and I worked for council member Blondell Reynolds Brown for all of those years. And I served in every position you could have as a city council staffer except communications. And before that, I was a teacher at Overbrook High School, and I also worked in healthcare at University of Pennsylvania Health System.

Kee Tobar (03:50):

I'm so excited to have both of you on the show today and to talk about this very important piece of information as it relates to tangled titles. So the name of this show, however, is How Is That Legal. Can either of you, we'll start with you, Council Member Gilmore Richardson, is there a specific instance related to home ownership in your professional or even in your personal life that shocked you and made you ask yourself, like, how is that legal?

Katherine Gilmore Richardson (04:18):

So the first thing I can remember is being a staffer in city council and hearing about this real issue of deed fraud. Of people stealing other people's homes by creating fraudulent deeds and reporting them with the city in the department of records. And I was a staffer then and anecdotally following the legislation. And I thought that is insane. People worked so hard all of their lives to purchase homes that they could leave to their children and their children, and to have it stolen by someone creating a fraudulent document and then reporting it with the city and taking years and years to, I guess, untangle the webs that have been weaved, that was the first thing in my professional life that caught my attention to the fact that people do illegal things around home ownership. And I'll say the personal side would be my personal experience with dealing with a tangled title on two different properties and working really hard to save them. So I'd say both personal and professional experience with things that are just crazy in the realm of home ownership.

Kee Tobar (05:34):

So stealing deeds and tangled titles. Rachel, what about you?

Rachel Gallegos (05:42):

I would say what has shocked me most in doing the tangled title work, which is a new practice area for me in the last couple of years, is how expensive it is to deal with the death of a loved one. And it's no different than a lot of things we do in this country where we capitalize on people's grief and trauma, but the death of a loved one costs families thousands and thousands of dollars. In a family's absolute worst moment we turn around and we say, "You will now have to spend money that most people don't have to bury your loved one and to try to deal with their estate and to try to keep homes within families. And we ask you to navigate all of this in your most traumatic time." And I think it's pretty abhorrent to do that to families. And I don't really see the purpose in that. And to be very clear, the register of wills, Madam Register has done a tremendous job in her new role in trying to educate everybody about this and make that office as accessible as possible. But every day I think to myself, how is it possible that we are capitalizing on families at this horrible moment in their lives?

Kee Tobar (07:03):

So what we've been talking about, or we're going to talk about today is really surrounding home ownership. And I'm really excited to talk about that with the both of you, because in this country, at least, this is a racial equity podcast, and in this country as it relates to building wealth and thinking about analyzing the racial wealth gap, home ownership is at the center of that for a variety of reasons. So I'd love if you could talk about, Council Member Gilmore Richardson, why is home ownership a racial justice issue?

Katherine Gilmore Richardson (07:38):

Well, home ownership is a racial justice issue because far too long, too many people that look like me were locked out of home ownership opportunities for reasons that they were not responsible for. You have real structural racism that's really created a system where you see tremendous racial disparities in housing and homelessness. And some of this has been caused because for most of the 20th century, a lot of Black families were denied any federal resources that were created for other families to help them become homeowners and then build generational wealth. And you'll see that there's disparity amongst African Americans versus other races around home ownership rates. There's still a disparity here even in Philadelphia. And that's because some of our individuals who may have served in the armed forces weren't able to take advantage of the GI bill back then, or maybe they couldn't purchase homes in certain areas, right?

Katherine Gilmore Richardson (08:41):

And so they couldn't create a wealth at the same rate as other families, because they did not have the opportunity. You actually had restrictions in deeds back in the day that would say you can't sell to a Black family. So we were only in areas, were redlined out of areas, and only in areas where we could go, and thus weren't able to create a lot of generational wealth. And then you get into a circumstance, as Rachel talked about, where your loved one passes away, there's really no plan. Everybody thinks the house was left to one person, but really it was no will and the state has to be probated and it's a very expensive process. And if you don't already come from a family that's wealthy or had some type of plan, it's very difficult to save the home and to be able to afford every part of the process. And so you're planning a funeral and you're also planning and trying to save the home. So really a lot of racial disparities have caused the situations that we're currently in. And that's why we try so hard to do the work that we're doing to help families not end up in these situations, and when they do end up there to help them out of these situations.

Kee Tobar (09:59):

Thank you. Rachel, do you have anything to add to that?

Rachel Gallegos (10:02):

Just briefly, I think the Councilwoman really said it absolutely clearly, which is that we have codified this into law in the early 20th century. And so I think that people assume that there was a few bad actors and maybe there was some unspoken bias and some more insidious behavior like that. But the reality is that we had laws in place, upheld by the Supreme court to say Black and brown homeowners do not have the same access to home ownership opportunities as white homeowners. The FHA was subsidizing suburban communities entirely for white families. And as a Councilwoman pointed out, had deed restrictions in there that said, "You may not sell to Black families." And so when you do that for enough decades, you create an incredibly large problem that we are all reckoning with today, which is what was once affordable early on for white families, those values have skyrocketed. And now you're again locking out Black and brown communities from affordability due to the wage gap and other disparities.

Rachel Gallegos (11:08):

And so it is perpetuated. And even though we've had some progress in terms of law and anti-discrimination, and preventing that in the housing arena, that can't possibly rectify the decades and decades and decades of community growth and how we've developed our housing stock as a country to really only help white families. And so now here we are. And how do you begin to undo that and reckon with that, especially when you're looking at home ownership rates? Black home ownership rates are at an all time low. So it is absolutely a racial justice issue when we have an entire community of our country that doesn't have the same access to a basic need, which is housing. That is a basic necessity that we should be providing for people, safe housing.

Kee Tobar (11:49):

We're going to come back to that last portion of what you said, the fact that Black home ownership rates are declining, but I love when we bring up the historical context there, because as you said, there were whole suburban communities created from racial covenants and redlining. Shout out to Levittown. And so we're reading this book called Philadelphia Divided in our racial equity book club at Community Legal Services that I would highly recommend others to read, to really see the 1955, 19 56 legislation that would help make home ownership easier for all coming out of World War II. And we see that not only sometimes was the legal context, the legal document, AKA racial covenant indeed overtly racist, but then in the execution of what is seemingly neutral policy that is supposed to benefit everyone else, the execution by individuals in positions or institutions of power then comes about being racist, right?

Kee Tobar (13:00):

The fact that we had an opportunity to have 150,000 affordable public housing in Philadelphia in the 1930s during World War II, and instead we chose only 5,000 because then public housing got this brand that it was for Black people, right? And so I love when we bring up the history of it and so that we are able to see it and connect the dots to today. But as it relates to the portion of what you're saying, that Black home ownership is declining. And although FHA ended its practice of redlining in the mid 1960s, we are seeing a decline in Black home ownership and an uptick in white home ownership nationally. In fact, Philadelphia's Black home ownership rate has been declining over the past 30 years. First you Rachel, could you explain why is that?

Rachel Gallegos (13:52):

Sure. I am not the expert in this. Let's be clear about that. But as part of my work, this is part of the ongoing conversation within our unit and informs how we do our work. So it's a variety of things. One, it's the wage gap. It's dollars. You want to buy a house, you need money. And when you have a very clear wage gap between Black Americans and white Americans, it's less income. So right off the bat. And then what we see are a lot of first time Black home buyers who are facing also a lot of debt as they go in to think about that first home purchase. And so that is slowing home ownership rates down. And what we also learned coming out of the 2008 crisis was that Black wealth was destroyed in the 2008 financial crisis. It absolutely set back any progress that was made as that bubble burst in 2008, and we saw rates of foreclosure at a much higher level for Black homeowners than white homeowners. And so you've devastated an entire community and that affects home ownership rates.

Rachel Gallegos (14:54):

I think also what we know is that lending practices continue to be really problematic today. You've seen the verdicts coming or the settlements coming out of these big lawsuits with these big banks, which is the reality is that a white homeowner goes in to talk about a loan and a Black homeowner goes in to talk about a loan, and on paper it is the same exact financial picture and income status. And the Black homeowner applicant is being denied or being given a lesser product at a much higher rate than white homeowners. This is happening today. I cannot stress that enough.

Rachel Gallegos (15:29):

And so that happens over and over and over again, and you see a decline in Black home ownership. And so I think it's a lot of different things overlaid that are creating this problem, but it is alarming to know that the rate of home ownership is at an all time low. That's hard to reckon with again, because we talk a lot about how much progress we've made as a country on this and that, and, oh, we're moving in the right direction. And then you see these really, really stark statistics that tell us that is not actually the case.

Rachel Gallegos (16:01):

So we need to rethink what we are doing. We need to think about what we are not doing and figure out a new path forward so that again, we have all Americans able who are interested, able to try to achieve a home ownership status at the same rates and not be deterred with bad financial products that are going to lead them into a foreclosure situation at higher rates than white homeowners. And we see that too in Black neighborhoods. If you look at that, that statistic is really high, too. In Black neighborhoods, you will see financial products with adjustable rate mortgages, higher interest rates, undisclosed balloon payments, which all leads to higher rates of foreclosure. You can do the studies, you can do the math and you can see it. This is not anecdotal. This is what is happening in our city.

Kee Tobar (16:46):

Council Member Richardson, do you have anything to add to that?

Katherine Gilmore Richardson (16:49):

Rachel said it all, but one thing I wanted to mention from a historical perspective for Philadelphia, because you talked about Black home ownership declining over the last 30 years. And in the 1950s in Philly, it was the height of our industrialization. All the old factories, the old factory era, my grandmother even worked at Bayuk tobacco factory in the 1950s, when they migrated here to Philadelphia from South Carolina. And they talked about how you could go and get a good family supporting and sustaining wage job that would enable you to purchase a home in a community where they were able to purchase a home. And so my grandparents purchased a house for $3,000 in 1951, and the houses on that block today are going for 400 and $500,000. Okay? And so I think it's the decline of the middle class in Philadelphia because we've left the height of the industrialization.

Katherine Gilmore Richardson (17:50):

We've seen the most growth in our job market in our lower wage, more service sector type jobs. And when you have a situation where a number of the folks in your city are working in lower wage positions, it's difficult for them to gain access to home ownership because they lack the resources and/or the funds. And the other thing I wanted to talk about is the rising home prices. Over the last 10 to 15 years, since the burst in the market in 2008, we have seen steady increases in the cost of housing in the city. And it's really ballooned over the last two years, even since COVID.

Katherine Gilmore Richardson (18:34):

And houses that were going for $105,000 maybe in 2008 are probably double or triple that amount now. And so it's much more difficult to gain entry into home ownership because you're lacking the wages. You're unable to qualify for a mortgage because of any past lived experiences. If you've grown up anywhere in our city, you know we have lots of folks who are struggling and/or living in poverty. And so that lived experience, you're just trying to make it and get by day by day. So it's difficult for you to have a saving so that you can demonstrate to a bank that you have the ability to save, and that you can qualify for a mortgage with a good interest rate so that you are not paying a whole bunch of extra versus the other person.

Katherine Gilmore Richardson (19:24):

And so it's just all the things Rachel mentioned and more that really prevents Black homeowners from getting into the market, particularly in places like Philadelphia. And that's why it's important for us to put programs in place to help with home ownership like the Philly First Time Home Buyers Program that was done by my colleague Council Member Cherelle Parker. All those types of things will be important for us to help members of our community have access to home ownership.

Rachel Gallegos (19:57):

One other thing I wanted to add was that I think Councilwoman, you just brought up the Philly first time home buyer, which is a fantastic program. I have a client who I'm pushing in that direction right now. But one other thing that was happening too, is that programs like that and other good incentivizing home ownership programs were not being marketed to the Black community. Were just outright being not disclosed at all. So again, discouraging potential homeowners who just didn't know that there were opportunities out there that could make home ownership a possibility.

Kee Tobar (20:25):

Thank you. I'd like to talk now about preserving the family home and generational wealth, which is a huge issue in Philadelphia and across the country when homeowners don't have their name on the deed. In Philadelphia, we call these tangled titles. Council Member, how do you get people into tangled titles? And what are some of the problems that come up if your name isn't on the deed of your home?

Katherine Gilmore Richardson (20:48):

Sure. Well, the first thing I try to do when talking about tangled titles is really educate people on what it is. "Tangled title? What's that?" And really I'll just tell them that a tangled title is when the deed to the property or house that you're living in has a different name from the apparent owner or someone in your family has passed away, left you the house, but the deceased person's name is still on the property. And what happens is they have to ensure that their estate is probated so that they can get the rightful owner's name on the property so they can keep it in the family forever. But some of the other situations we've seen, and I've dealt with a couple constituent cases like this, even this year, are the rent to own situations that go wrong. A property may be abandoned, and we deal with this a lot in the city, an abandoned property, and again, the whole defraud issue.

Katherine Gilmore Richardson (21:51):

And a lot of folks don't know or realize that they're living in a house with a tangled title until they need help or assistance from the city. And so they'll go and try to apply for a grant, or they may go to a bank and try to apply for a loan to help with some of the maintenance costs at the house. They may try to get insurance on the property, but they're not able to prove ownership and not able to produce a title with their name on it. And so that's how I try to explain it to people. And I say, "You want to get your name on the deed before it's too late, so that you can access these services and other products and other loan products from the bank."

Kee Tobar (22:31):

So you've been through this process. You mentioned earlier, there were two issues that you had and you tried untangling the title to your family home. Can you tell us about that process and what it was like for your family to actually go through that process?

Katherine Gilmore Richardson (22:47):

Sure. And so what I talk about with tangled titles is how I suffered in silence. I suffered in silence because it was my job as a staffer in council to help other people. And here we were in trouble and I had to figure out how to help ourselves. And so my mother died. So first, actually my father died in 2012, and then my grandmother died in 2015. And my grandmother had lived with us since we were in high school. And right after my grandmother died, about a month later, my mom fell and broke her hip. And we didn't know at the time that her bones were weakened, which made her hip break because she had cancer and it had already spread throughout her whole body. And so my grandmother died in 2015. A month later, my mom fell and broke her hip. We discovered she had cancer. She refused to get a biopsy and said she wanted to be taken care of and die at home.

Katherine Gilmore Richardson (23:56):

And so for the next eight months, my sister and I took care of my mother until she passed away in 2016. And actually she passed away on the first Thursday, the first council session of 2016. And I remember thinking, what are we going to do? At the time my sister and her husband and their baby were living in the house that my mom and grandmother were living in, and the house was in their name. They had also left us another house that they had a long term, like 15 year tenant in the property. And both of the houses had mortgages on them. And the first thing I had to do, because again, I didn't come from a family with much wealth. I had to pay a lot out of pocket to just have a funeral for my mom. And after that, we had to figure out what to do with these houses.

Katherine Gilmore Richardson (25:02):

And so I continued to pay the mortgages and ensure that the mortgages were paid, but we didn't know what to do. And so finally, I heard a program with our registered wills, Tracey Gordon. And she talked about how, when you probate the estate, it goes off of the value of the house at the time of the individual's passing. After my father died, my mother never settled my father's estate. So it was just a big mess. And so I finally contacted an attorney, I had to pay a lot of money out of pocket to the attorney for attorney fees not only for the probating, but also for the services that we had to pay for.

Katherine Gilmore Richardson (25:58):

We also had to take out a mortgage on both houses, and I was afraid because at the time my mom passed away, I did not have enough money to pay for two mortgages in addition to the house I already lived in. And so I had to also take out two mortgages on top of attorney's fees. And because I already had my own house, they had to treat the other houses as investment properties. So I would've had to put down 20% for both of the houses, and you're talking about a quarter million dollars in mortgages.

Katherine Gilmore Richardson (26:35):

And so it was the hardest thing I've ever had to do in my life. I suffered in silence for about four years. We worked to save up money, the houses weren't in good condition so we had to fix them up in order for me to even be able to take out mortgages on them. But we fought every step of the way, my sister and I, to do the very best that we could. And last year, around this time, actually, June 15th of last year, after so many years of hard work and saving and doing the very best that we could, I went to closing and purchased both of the houses. We had probated the estates already with the attorneys and paid all the taxes to the estate and everyone else. And June 15th of 2021 was one of the best days of my life because we were able to reclaim those houses and put them in my name so we could keep them in the family forever going forward.

Katherine Gilmore Richardson (27:36):

I tell that story because I don't want anyone else to be in that circumstance. They should make a plan. And if they're in that circumstance, contact community legal services, contact the Register of Wills office, look at the Probate Deferment Initiative and any other tools out there to help you. And we're actually doing a program in council to help families directly who may not qualify for a legal service, but still need help to pay for their attorney's fees. And that was all based on the terrible experience I went through over the last couple of years, but we are now on the other side and it feels so good to know that we were able to save those homes and keep them in our family and keep our family members housed.

Kee Tobar (28:21):

If I didn't care much about the sound, I would definitely give you a round of applause. I'm super happy to hear that you were able to save your family homes and also thank you for being vulnerable enough to share that experience, because I know that there are many people beyond the 10,000 already who are suffering in silence and who for a variety of reasons may just not know what to do next. They simply don't know what to do. Rachel, can you talk about this experience as it relates to your clients, whether it's different or similar to what Council Member Richardson just explained?

Rachel Gallegos (29:02):

It's that, it is that over and over and over again. And I don't say that lightly, but I say that to let people know that you are not the only family experiencing this. I think trauma and grief and shame are really strong emotions that can really put you at a standstill. And suddenly a process is far too overwhelming to try to navigate and there's just too much, right? And so I think the story is told over and over and over again in the same way, because again, this is born out of grief. This is born out of the death of a loved one. And while there are plenty of times where you're celebrating the long life of a loved one, it still comes from trauma and grief. And so to then try to have to make decisions and navigate a complicated process, that really forces you to go through financial information that feels very personal, and it just feels like you're sharing all of this information with people that don't care about your family or your loved one at all. It's a lot.

Rachel Gallegos (30:05):

And so our clients often present in that way, which is my grandmother died, and we didn't do anything about it then, but we're in crisis now because we need a new roof on the house, or we fell behind on the mortgage. We were keeping it up for as long as we could and now we fell behind on payments and now the bank won't talk to us. The bank is always happy to take your money. It doesn't matter who you are. But the bank suddenly is not willing to have a conversation with you when you fall behind, because you aren't the borrower and you aren't the record owner. And you won't even get past that first line of customer service because you can't show what they need you to show, which is cut off an arm and give me your first born before I'll have a conversation with you.

Rachel Gallegos (30:42):

It's infuriating, it's impersonal. And it ignores the human being that is sitting before you and what their family has gone through. And so our clients come in with that baggage and now need help untangling the title. And a lot of times, unfortunately enough years have passed where further future heirs have since passed away also. We have cousins and aunts and uncles who people have lost touch with, or can't find anymore. And unfortunately, if you don't have a will, what happens is in those situations you have to track down a lot of these family members to try to get cooperation, because they may own a fraction of an interest in this house and we need them to give up that interest or talk with the family about how they can be bought out in a way that is acceptable to everybody involved. And so it gets really complicated the farther down you go, but it is the same thing.

Rachel Gallegos (31:36):

It is grief. We lost a loved one. And here we are, because now we want to save this house, which generations of this family have been raised in. And we hear that story all the time. This was grandma's house, but my whole family has spent time living here at one point or the other. And my grandmother always wanted everybody to be able to come back to this house. Whoever in the family at any point in their life needed that ability to come back, regroup, or whatever it was, raise their family, it was important that that house be there. And that is a story that all of us, I think, can share to some extent, I know my own grandmother's house, that's how she feels about it. She wants it in the family so that whoever may need it at any time can have access to it.

Rachel Gallegos (32:18):

So that's why it's important for these families to take these steps, but with the help of an advocate. And what I always say is it's a thousand steps, but I'm going to walk next to you this whole time and take you through it step by step. You don't have to do this journey alone. I am next to you sharing this burden with you as best I can. I'm not your family, but I want to be there to shoulder it. I know my colleagues feel the exact same way. We are there to walk next to you to help navigate the process. You know what you need for your family, you know best what your family needs generations to come. How can I help you achieve that? Is the question that we often say, but it is a story that is told so many times in Philadelphia.

Rachel Gallegos (33:00):

I speak only to Philadelphia because that's where our practice is. But we know from a recent Pew report that there are at least 10,000 tangled titles in Philadelphia for a variety of reasons. And so CLS and other public interest agencies are trying to take bites out of that to say, "How can we start tackling this issue? How can we then start preventing this issue? How can we educate the public about this going forward?" So there's a lot of resources being devoted to tangled titles, thanks to leadership like Councilwoman Gilmore Richardson has provided and some of her colleagues as well. So Philadelphia is swimming in the same direction on this issue, which is really nice at all levels. Elected officials, attorneys, other community stakeholders, local community organizations and housing counseling agencies. Everybody is on board that this is something that we need to work on as a city. So it's been exciting in that regard that there's so much energy around it.

Kee Tobar (33:55):

That's great to hear. And you mentioned the Pew report. And in doing research for this conversation, I actually went back and I read that report. And when I saw that there was with the highest section area with tangled titles was 87% Black. I was like, wait, that can't be a coincidence. What's going on here? And so we all know that tangled titles are a nightmare for anyone, but they are disproportionately generally common in predominantly Black neighborhoods with relatively low housing values and low incomes and high poverty rates. And not coincidentally, many of these communities were redlined in the past. Rachel, can you talk about some of the systemic consequences of tangled titles for Black and brown home ownership? You spoke to the emotional and traumatic consequences, right? The only house you've ever known, right, may be taken away from you. What are the systemic consequences?

Rachel Gallegos (34:51):

The systemic consequences are that you have communities and neighborhoods that fall into disrepair because of the inability to obtain loans or financing or grants to do basic home repairs to keep the housing stock safe and habitable. So that is a big reason we see clients coming in, is they need to make structural repairs to the home, and Philadelphia has put a lot of money into this through PHDC and grant programs and low interest loan programs, but you have to be the record owner. And so it creates this sort of hurdle that we have to navigate to figure out how to do that. And so that is a really devastating consequence for people who are trying to do right by taking care of the house. We know that there are tax programs that are available to what we call equitable owners, but there are provisions in some of those programs that say after so many years, you have to show what you've done to try to untangle your title. And we've yet to see the full ramification of that, but there's that problem.

Rachel Gallegos (35:55):

And then you're just going to outright lose homes to foreclosure. Because again, you fall behind. Foreclosure is a really just insidious beast, because you fall behind for a couple of months due to job loss, and then you find another job, but by then the mortgage company has stopped taking your payments, you can't get caught up, and now you're in this hamster wheel of torture because what turned into a very small problem is now huge. And by the way, you're not the record owner. And now we're down this rabbit hole again of how we can get the bank to deal with you, and we're tracking down lost heirs. So you end up losing homes to tax foreclosure and mortgage foreclosure due to tangled titles. So it completely devastates entire neighborhoods all at once if this problem isn't addressed and isn't taken care of.

Rachel Gallegos (36:46):

The Pew report really highlighted those stark statistics, which is Black and brown communities are affected by tangled titles at a much higher rate in Philadelphia than white neighborhoods. And so it's really devastating, and I'm glad Pew was able to pull that report together because it puts data behind this problem that everybody can understand and then try to systematically address.

Kee Tobar (37:09):

Council Member, would you like to address that question?

Katherine Gilmore Richardson (37:12):

Sure. Again, I think Rachel hit it out of the park. And really from a city perspective, what we see is that again, individuals are now able to access the grant programs that we offer to help sustain home ownership. The other piece of this from a city service delivery perspective is that the neighborhoods that are most impacted and affected by tangled titles are typically the same neighborhoods that need the most service, particularly with our Community Life Improvement Program and just cleaning and greening those communities. If you literally overlay the maps with the areas that have the most tangled titles and overlay those same areas with areas where we have the most service calls for cleaning and greening through the CLIP program, areas where we have the most short dumping, areas where we have the most crime, it's literally the same areas, it's the same areas. So we see it play out in so many different ways, even from a service delivery perspective in city government.

Kee Tobar (38:18):

So going back to that Pew report, and you mentioned earlier, Rachel, that 10,407 tangled titles in Philadelphia at the time that number was listed in the report. But really what jumped out to me beyond the 10,000 plus tangled titles were the fact that these properties are still collectively over $1.1 billion. I'll say that again, that's $1.1 billion that homeowners cannot leverage to make the necessary repairs or starter business, or send their children to college. With some additional resources in place to address Philadelphia's tangled title crisis, do we have any information on what homeowners can do after they're able to successfully untangle their titles?

Katherine Gilmore Richardson (39:11):

Well, I would say the first thing folks should do, and I've gone through this process too, when you finally have title to the home, which is one of the best days, is make a will. Make a will and ensure that it's signed and witnessed, make sure you sign it and then witness by two people. Okay? And that it's notarized so that you have something in place with instructions about what you want to happen with those homes when you pass away. One thing's for sure and two things' for certain, everybody is born and everybody has a day to die. And so you have to make a plan for that day so that the next generation does not have to suffer in the same ways that folks with tangled titles have suffered. And so the first thing is make a will, make sure your heirs, your children and other family members know your wishes in advance so they know what to do to take care of business.

Katherine Gilmore Richardson (40:10):

But outside of that, you're now able to access some of those programs that can help you maintain ownership, help you with significant upkeep with the home. You can access loans or grant programs to help you with beautifying the home and keeping it for the next generation. And so really you're able to do all the things that you weren't able to do when you could not prove you were the homeowner. You could also apply again for the city revenue programs to help with your taxes. Because again, the communities where we see a lot of tangled titles and deeds, we know they're predominantly Black. If you overlay them on the map, there are also a lot of communities in Philadelphia that are rapidly changing. And so now you've untangled this title. You've saved the home and now your taxes are going up because the neighborhood has been developed. And so you need the opportunity to access those grant programs to make sure you're keeping your house up, so that you're not being fined for an unkept property, and just do all the things you weren't able to do before.

Katherine Gilmore Richardson (41:17):

So make a will. If you're listening to this, make a will and sign it, have two witnesses, get it notarized and tell your loved ones where your will is.

Kee Tobar (41:30):

Thank you for that. It's really, really important. Rachel, what additional laws and policies are necessary to support homeowners with tangled titles?

Rachel Gallegos (41:40):

We need to see a change in the costs of probate. We need to see outright waivers of that fee for low income homeowners and low income families who are navigating that, there needs to be a statewide change. There's more discussion to be had on whether there should be an adverse possession opportunity for tangled titles among families. I know that there are viewpoints on both sides of that issue and whether or not that's appropriate. Property rights are really important in this country. Our Commonwealth is no different. So I think it's a complicated discussion to talk about easier ways to extinguish property rights from people, right? That can cut both ways.

Rachel Gallegos (42:21):

I think that we need to be wary of what's happening in other parts of the country, New York, and specifically in the south, where what we are seeing is partition actions from nefarious wholesalers and investors. They find one heir, they talk to that heir, they buy that particular heir out, and then they force the sale of the property through a partition action. It's not something that we see a lot here in Philadelphia, but we know it's coming because we're seeing it happen other places.

Kee Tobar (42:50):

So I don't want to stop you in the middle of your conversation, but I would like clarity or clarification on partition actions. What is that?

Rachel Gallegos (42:58):

Oh, sorry. Yes. A partition action is forcing the sale of a property. It does happen here in Philadelphia, not quite that way, but there are actions in court where the family can't decide what to do with the property so one heir in particular says, "I want to sell this. I have a one fourth interest in this. My siblings won't cooperate," and they can file what's called a partition in the court of common plea to force that sale. And the proceeds are shared, but you can imagine that's not always the best option, especially if there is a sibling living in the house and taking care of the house. So partition actions are fraught. And so that can be another complicated discussion.

Rachel Gallegos (43:38):

So mostly what I would see in an immediate relief is the cost, the cost of probate, talking about inheritance taxes that families have to deal with also when you're probating an estate, and the other piece that my colleagues would be very upset if I didn't mention, estate recovery. Estate recovery is a huge barrier in this probate process, because if your loved one was receiving nursing care or waiver services in home care before they died, it's possible that there is a DHS claim against the estate that can be really burdensome, and there's ways to get that waived, but you have to know that that's possible. Luckily we have really wonderful legal advocates in our H and I unit here at Community Legal Services who can help you navigate that and who I call upon to help my clients navigate that. But estate recovery can be really devastating.

Rachel Gallegos (44:31):

Again, in the aftermath of a huge loss, it's just another punch to the stomach to say, "Here's tens of thousands of dollars that your loved one received in care that we intend to collect from the estate." And that is a very serious thing. You can't transfer record ownership without dealing with that, otherwise the person who becomes the new owner is personally liable for that money if it's not taken care of. And I've seen some lawsuits about that from DHS to try to pursue those claims, depending on how the probate of the estate is happening. So relief in those areas would be a huge deal. And inheritance taxes could be as simple as other payment plans that people can get into. Can we better advertise that information so that people understand that there are options for dealing with that inheritance tax that families get hit with also.

Rachel Gallegos (45:22):

So lots of low hanging fruit, as I like to say, or put a different way, lots of opportunity, lots of opportunity to make this process more streamlined, easier for families to navigate. And hopefully because there are limited legal advocates that can do this work, we need to make it more accessible. We need to make it more streamlined so people are able to do this on their own if they have to. The reality is we don't have enough attorneys to go around to do this work for every family in Philadelphia. So we have to find other ways to educate people and to help people along.

Kee Tobar (45:53):

Thank you all for this conversation and for sharing such vital information.

Katherine Gilmore Richardson (45:58):

No, thank you for the opportunity and for this important work that you were doing to spread the word, and thank you to Community Legal Services. And I must thank our Register of Wills Tracey Gordon for the work she has done on this issue as well. So thank you very, very much.

Rachel Gallegos (46:15):

Thank you so much, Kee. This was so exciting. I really enjoyed the conversation. I'll always take an opportunity to talk about the work that my colleagues are doing and that the city as a whole is doing. And it's so wonderful that we have council members like you, Councilwoman, to champion this work and to continue to talk about it because that's what's important, is getting the information out there. So we're fortunate in a lot of ways in Philadelphia that we have people who care.

Kee Tobar (46:44):

What has unfortunately been resoundingly impressed upon me is the struggle both in life and after death as it relates to Black and brown people trying to build wealth through this home ownership tool. Right? And so what we've talked about is if you can get beyond the appraisals, if you can get beyond the loans that are different, that has a Black tax per se, if you can get beyond that and cross the threshold into home ownership, then you have to deal with maybe in your untimely demise or in the devastation if anyone can get sick, or you don't know if you're going to obtain dementia or so on and so forth, that all of your hard work that you put into is then stripped on the back end, right? You were able to accomplish this great goal and pull yourself up by your bootstraps or whatever the framing or phrasing is. And then at the end, you're still unable to pass that on to that next generation.

Kee Tobar (47:53):

I think that conversation needs to be had, because there's also this narrative out there that Black and brown people are not striving, are not trying to build wealth or not trying to leave their loved one something after their untimely demise or after their demise. Right? And so it's really important to have this conversation about what are the specifics, what are the circumstances that may happen, that may have families in limbo, who all tried to do the right thing.

Kee Tobar (48:27):

I'm really grateful to Rachel Gallegos and Council Member Gilmore Richardson for joining us. To learn more about Rachel's work, you can follow her on Twitter at RKG80. To contact Community Legal Services' home ownership and consumer rights unit, you can call 215 981 3700.

Kee Tobar (49:01):

Council Member Katherine Gilmore Richardson can be found on Twitter at councilwomanKGR. That's C-O-U-N-C-I-L-W-O-M-A-N-K-G-R. Next week we'll discuss how Medicaid estate recovery, known as debt after death, forces people to choose between healthcare and preserving their family home. So be sure to subscribe to How Is That Legal wherever you get your podcast. How Is That Legal is produced by Rowhome Productions. Jake Nussbaum is our Producer and Editor. Executive Producers are Alex Lewis and John Myers. Special thanks to Zakya Hall, Caitlin Nagel and Molly Pollak. Music provided by Blue Dot Sessions. I'm your host Kee Tobar, thank you so much for joining us.