Archive for September, 2010

Federal Mortgage Assistance Programs

FEDERAL PROGRAMS

The Housing and Economic Recovery Act, Public Law 110-289, was passed on July 30, 2008. It created the HOPE for Homeowners program. It is effective from October 1, 2008 to September 30, 2011. 

In February 2009, President Obama introduced the Making Home Affordable program, which authorized the Home Affordable Refinance program and the Home Affordable Modification program. The Home Affordable Refinance program expires on June 10, 2011 and the Home Affordable Modification program expires on December 31, 2012.

HOPE for Homeowners Program

This program’s goal is to reduce principal and interest payments for eligible borrowers by allowing them to refinance into fixed rate 30-year FHA-insured loans based on current property values. Lender participation is voluntary. Eligible mortgages must have been originated by January 1, 2008. Borrowers must certify that they:

1. have a mortgage debt-to-income of at least 31%,

2. are unable to afford their current loan,

3. have not intentionally missed mortgage payments,

4. do not own second homes, and

5. have not been convicted of mortgage fraud.

Additionally, they must certify that the mortgaged property is their primary residence, and is a single-family home (one to four units).

Original lenders must agree to:

1. pay a 3% one-time insurance fee to FHA;

2. write down the mortgage to achieve a 90% loan-to-value ratio, if necessary;

3. waive prepayment penalties on the existing mortgage; and

4. release all existing claims, such as second mortgages.

The new loan may not exceed 90% of the property’s current appraised value. The maximum loan amount is 132% of the Freddie Mac limit. The program is effective from October 1, 2008 through September 30, 2011.

The Making Home Affordable Program

This federal program offers two options for mortgage applicants and seeks to make mortgages more affordable and prevent foreclosures. Lender participation is voluntary. The two options for homeowners are the Home Affordable Refinance program and the Home Affordable Modification program. Investors and lenders are provided incentives for participating in the Making Home Affordable program. The Making Home Affordable website refers homeowners to contact (888) 995-HOPE.

The Home Affordable Refinance Program.

This program is for applicants whose existing mortgage is owned by Freddie Mac or Fannie Mae and who have not missed any mortgage payments. Normally, they would be ineligible to refinance because their homes have decreased in value. The program allows them to refinance into a more stable and affordable fixed-rate loan. The program is in effect until June 2011.

The Home Affordable Modification Program.

This program assists homeowners who are at-risk and may have already missed a mortgage payment. However, payment delinquency is not a criterion for eligibility. Modifications may start immediately and continue until December 31, 2012, and loans may be modified only once. The Treasury will partner with the financial institution and investors to reduce a homeowner’s monthly mortgage payments. Criteria for eligibility in this program include the following:

1. the loan must have been originated on or before January 1, 2009;

2. the owner must occupy the property;

3. the first-lien loan has an unpaid balance of up to $ 729,750;

4. the mortgage payment is more than 31% of the homeowner’s gross monthly income; and

5. the applicant must sign an affidavit of financial hardship.

 Only the homeowner’s first mortgage is eligible for modification under this program.

Guardianships in Texas

What is a guardianship?
Guardianship is a judicial proceeding in which a person or entity may be granted full or limited authority over an incapacitated person (ward) to promote and protect the well-being of the ward and/or the ward’s estate. The guardianship should be designed to encourage the development or maintenance of maximum self-reliance and independence of the ward by limiting the power or authority of the guardian based upon the person’s actual physical or mental limitations.

Note: Guardianship is a specialized area of practice; you are highly encouraged to speak with an experienced attorney about the requirements of appointing a guardian.

There are two types of guardianship- guardianship of the estate and guardianship of the person. The guardian of the estate is in charge of the ward’s property and finances. The guardian of the person is in charge of care and custody of the ward. Factors considered in the guardianship proceeding include 1) the extent of the ward’s diminished incapacity 2) the necessity of guardianship, and 3) the most appropriate person to be appointed guardian, with “the best interest of the ward” as the underlying guideline. If the potential ward is a child, incapacity is not an issue because it is automatic under the law. Incapacitation is the threshold issue in determining guardianship for an adult since guardianship is an extreme taking of the wards rights. Only if the ward is found to be incapacitated are the other issues considered.

What are the Alternatives to a guardianship?
There are several alternatives to help avoid guardianship. A durable power of attorney allows another to act as your agent in financial matters. A medical power of attorney allows another to act as your agent to make healthcare decisions. Directive to physician or “Living Will” directs your physician(s) how to act regarding “life-sustaining procedures” in the event of an incurable or irreversible condition. You may also appoint a person to make such decisions for you if the situation should arise. A surrogate decision maker is a person who may consent to medical care and treatment if a person to make decisions cannot be located. There are several trusts alternatives to avoid guardianship as well. A trust is the management of the individual’s assets by an individual or corporate trustee(s), with the highest duty of care to the beneficiary. A competent spouse has the right to manage, control, and dispose of the community estate as the community administrator to include that portion of the community estate that was under the sole management of the incapacitated spouse. A ward’s debtor can pay monies due the ward to the clerk of the court if $100,000.00 or less. When an individual’s only asset is a government benefit, then the person with custody or care of the proposed ward can file an application with the appropriate agency to be appointed representative payee. If the purpose of the guardianship is to convey title of property worth less than $100,000.00 the court can order a sale with the proceeds being placed in the court registry.

Who can be appointed as guardian?
Certain individuals have priority to serve as guardian by statute but any person who does not have an “adverse interest” to the proposed ward can file an application for guardianship and seek
appointment as guardian. The following people are ineligible to be appointed as guardian:
• a minor;
• persons who’s conduct is notoriously inappropriate;
• an incapacitated person;
• person who is a party or whose parent is a party to a lawsuit concerning or affecting the welfare of the proposed ward;
• a person indebted to the ward unless the person pays the debt before appointment;
• a person asserting s claim adverse to the ward or the ward’s property;
• a person who, because of inexperience, lack of education, or other good reason is incapable of properly and prudently managing and controlling the ward or the ward’s estate;
• a person, institution or corporation found unsuitable by the court; or
• a person disqualified in a declaration made by the ward prior to incapacity.

When appointing a guardian for a child “the best interest of the ward” must be considered. It is presumed not to be in the child’s best interest to appoint a guardian, if that person has been convicted of any sexual offense, sexual assault, aggravated assault, aggravated sexual assault, injury to a child, to an elderly individual, or to a disabled individual, abandoning or endangering a child, or incest.

What does a guardian do?
The guardian possesses and manages the ward’s property and manages the estate as a prudent person would manage his own property. The guardian has authority over the care and protection of the ward, but this authority is limited by the court to promote and protect the well being of the ward. A guardian is prohibited to act without court order, but there are few exceptions to this rule. He or she may act without court order to release a lien, vote stock, insure the estate against liability, insure property of the estate against fire, theft or other hazards, and pay taxes, court cost, and bonds.

Can a guardianship be created in a will?
A guardianship can be created in a will or written declaration of guardianship. If the guardian is appointed in a will, the will must meet the requirements of a valid will under Texas Law. If the guardian is appointed in a written declaration, it must be signed by the declarant or another person for the declarant under his direction and in his presence. The declaration must also be dated and witnessed by two or more credible witnesses 14 years of age or older. A “self-proving affidavit” can be attached to the will so long as it is signed by the declarant and the witnesses attest to the declarant’s competence, intent to create the declaration, and the execution of the declaration. If the declaration is handwritten then it must be entirely written in the declarant’s handwriting, but does not need to be witnessed. If the designated guardian is unavailable to serve, for any reason, the next designated alternate is appointed. The declaration and “self-proving affidavit” may be filed anytime after the application is filed and before a guardian is appointed.

Note: A declaration and affidavit in any form may be adequate to indicate your intention to designate a guardian.

What court can hear the guardianship and where should the guardianship be filed?
The county court of each county has the general jurisdiction of a probate court. In those counties in which there is no statutory probate court, county court at law, or other statutory court exercising the jurisdiction of a probate court, all applications, petitions, and motions regarding guardianships shall be filed and heard in the county court. In contested guardianship matters, the judge of the county court may on the judge’s own motion, or shall on the motion of any party to the proceeding, request the assignment of a statutory probate court judge to hear the contested portion of the proceeding, or transfer the contested portion of the proceeding to the district court, which may hear the transferred contested matter as if originally filed in the district court.

From the filing of the application until the guardianship is settled and closed, the administration is one proceeding for purposes of jurisdiction. The court has the power to adjudicate the rights to a given piece of property against all persons at anytime claiming an interest to that property in the guardianship or any other proceeding. The proper or a possible venue for the proceeding is dependent on the type of ward. If the ward is an incapacitated adult, venue is proper 1) where the ward is located, 2) where the ward resides when the application is filed, or 3) the county where the principal estate of the ward is located. If the ward is a minor child then venue is proper in the county where the parent or parents reside. If the parents are separated, venue is proper in the county of the parent who has greater period of physical possession.

Who participates in the proceeding?
In addition to the applicant and the ward, an attorney ad litem is appointed to represent the ward. The attorney ad litem represents and advocates on behalf of a proposed ward and has certain statutory duties. The attorney ad litem’s duties include: meeting the ward prior to any hearing to provide legal options, requesting medical history and records from the applicant’s attorney, reviewing the court file for proper service on the ward and third parties, and making sure the application has been sworn to by the applicant. An attorney ad litem can also serve as the guardian ad litem which represents the best interest of the ward. In some cases a Court investigator may be appointed to investigate the circumstances alleged in the application and makes an initial determination. A court investigator assesses the ward’s conditions at periodic intervals during the guardianship proceeding.

How does the guardian qualify?
The court appoints a guardian who must qualify as required by law. The court may also remove a guardian who fails to qualify. The guardian takes and files an oath of office to ensure that the guardian faithfully discharges the duties of the guardian of the ward, estate, or both. The court will set a bond, but a bond is not required for a corporate fiduciary. If a ward has named a guardian in his or her will, the will may direct that the named guardian to serve without bond. A bond cannot be waived for a guardianship of the estate.

What are Letters of guardianship?
Once appointed and qualified, a guardian obtains letters evidencing the appointment, qualification, date of qualification, and authority to act. The letters expire one year and 120 days
from the date of issuance, but may be renewed by an annual accounting approved by the court.

This is a brief overview of the legal system as it pertains to Guardianship and is not intended to replace legal advice from an attorney.

Contact us to discuss your guardianship questions.

Prepared as a Public Service by the
Texas Young Lawyers Association
and Distributed by the State Bar of Texas

Adoptions in Texas

There are a variety of ways for Texans to enlarge their families through adoption, including placement by the state through the Texas Department of Family and Protective Services, placement by a licensed agency, placement by the child’s birth parents (“private adoption”), and international adoption. This article is intended to help those considering adoption make informed decisions by answering commonly asked questions and by providing a list of available resources. The information should not be substituted for the advice of an attorney.

“Open” and “Closed” Adoptions
Depending on the type of adoption, adoptive parents can have some, little, or no contact with the birth parents. In a completely open adoption, the parents meet each other and participate in post-placement visits. Closed adoptions, on the other hand, are completely anonymous, and most commonly take place through the Texas Department of Family and Protective Services. Both of these types of adoptions are rare. Most adoptions are considered “semi-open” – the adoptive parents meet the birth mother (and in some instances the birth father) during the adoption process, and exchange pictures and letters as the child grows up.

Texas Department of Family and Protective Services
Texas Department of Family and Protective Services (DFPS) has a large listing of children available for adoption. These children have been removed from their parents or guardians for abuse and/or neglect, and many have behavioral, learning, medical, or psychological issues. Many of these children are non-infants and come from mixed racial backgrounds. Many loving parents have found satisfying and fulfilling solutions to their quests for enlarged families through an adoption from DFPS. A search for a child should always include contact with the adoption
supervisor at your local DFPS office. For additional information, go to www.dfps.state.tx.us
and select the adoptions and foster care link.

Private Adoptions
Texas law states that a person who is not the natural or adoptive parent of the child, legal guardian of the child, or a licensed child-placing agency may not serve as an intermediary between a prospective adoptive parent and an expectant parent or parent of a minor child. An intermediary cannot identify the parties for each other, facilitate the placement of the child, or place the child for adoption. Therefore, private adoptions cannot be completely confidential. If an adoptive couple has found a baby, they must deal with the birth mother directly and not through an intermediary.
The reason for the authorization of private adoptions, according to legislative history, is to allow a birth parent to have some say in choosing adoptive parents. For example, a family can collectively decide that the child’s grandparents, or some other close family relative, will become the adoptive parents. Private adoptions are also allowed where the birth mother herself places the child for adoption with a non-family member.

Questions surrounding private adoptions often arise regarding the expenses the proposed adoptive parents can legally pay. It is a crime in Texas to “buy” a baby or to pay money for the placement of a child. A birth mother cannot choose adoptive parents based upon which set of proposed adoptive parents presents the most attractive financial package (car, rent, or cash, for example).

Proposed adoptive parents can only pay “reasonable medical, legal, and counseling expenses” related to the health of the child. Reasonable medical expenses include doctor’s fees, prescriptions, etc. Paying questionable charges may subject both the adoptive and the birth parents to possible criminal charges.

As a general rule, pay the birth mother no money. You cannot give the birth mother a $5,000 check and simply note on it “for medical expenses.” Instead of giving money to the birth mother for medical expenses, pay the medical provider directly. Although you cannot legally pay an attorney for the placement of a child, you may pay reasonable attorneys fees relating to his or her preparation of documents and representation in proceedings to terminate the birth parents’ rights to the child and in the adoption proceedings. Because the law contains unanswered questions, we strongly recommend that you secure the legal help and advice of someone experienced with and knowledgeable about the adoption field.

International Adoption
In an international adoption, the child being adopted is a foreign national and there are a number of different legal issues that must be considered and dealt with. We highly recommend you speak with an experienced international adoption agency and/or attorney before proceeding. There are a number of steps that must be carefully completed or you may not be able to bring the child home to the United States.

First, not all countries allow American citizens to adopt. If you are interested in a particular country, you can check the U.S. State Department’s website to see if an adoption is even an option for that country.

Next, you need to consider whether or not the child will be able to immigrate to the United States. At least one of the prospective adoptive parents must be a U.S. citizen. In order to obtain a visa and travel to the U.S., the adoptive child must either have been abandoned by both parents or the sole remaining parent must be unable to provide for the child and be willing to irrevocably release the child for emigration and adoption in writing. In the typical international adoption, you would seek “advance processing” to obtain pre-approval to adopt internationally before identifying a specific child. This process takes a number of months but is definitely worth it. Even if you have identified a child, the advance processing route may be the better choice for a smoother adoption and immigration.

Once you have been pre-approved, you (through an agency most likely) identify a specific child and travel to the foreign country. Each country has a different process and you should talk with your agency about the process in the country you are considering. Next, an Orphan Petition is filed to obtain the child’s visa. In the majority of cases, the actual adoption takes place in the foreign country, and you will receive an IR3 visa for the child. The pre-approval can certainly expedite the “orphan investigation” and the visa process. Under the Child Citizenship Act of 2000, a child that enters the U.S. under an IR3 visa is automatically a United States citizen and a certificate of citizenship will be mailed to you. Upon your return to the U.S. with the child, you may choose to have the foreign adoption recognized by the State of Texas. This court proceeding results in a Texas order formally recognizing the foreign adoption and allows you to obtain a Texas birth certificate for the child. It also allows you to change the child’s name, in the event the name change in the foreign country is incorrect or you have changed your mind. If for some reason the adopting parents have not both seen the child prior to the adoption proceeding or the actual adoption cannot occur in the foreign country, the adoption must be finalized in Texas with the same formalities as a domestic final adoption (for example, you will be required to complete post-placement supervision that meets Texas requirements). After the Texas adoption (or “re-adoption”) is complete, you will be able to obtain a Texas birth certificate and also a certificate of U.S. citizenship.

As with any adoption, legal counsel is invaluable when navigating the complexities of international adoption, particularly with the crucial immigration aspects involved.

Interstate Adoptions
If the adoptive parents and the child reside in different states, they must comply with the Interstate Compact laws for placement of children. The Interstate Compact office of each state regulates the movement of children from state to state for purposes of adoption. Generally, both the sending state and the receiving state must approve the placement before the child can leave the sending state. Failure to comply with these laws before removing a child from Texas or bringing a child to Texas from another state is a criminal offense. Once again, seek legal counsel to ensure that requirements of the law are met.

Terminating Birth Parents’ Rights
There are two steps to secure a final adoption, which involve two separate lawsuits. First, the court must terminate the birth parents’ rights to the child. In the second suit, the adoption must be approved by the court.

Birth parents, both father and mother, generally must sign forms (called “relinquishments of rights”) indicating their desire to place a child for adoption before a court will terminate their interests. This applies whether the adoption is private, through an agency, or through DFPS.

If the location or identity of the birth father is unknown, he is nonetheless entitled to notice of the proceedings. You must show the court that you have diligently tried to find him. He can be served with notice of the termination proceeding by publication of notice in a newspaper of general circulation in the county. The court may require publication in the county of birth and/or the county of the birth father’s last known residence. The rules for notice by publication are complex and must be strictly followed. Notice by publication always leaves the door open for the birth father to challenge the adoption, so this avenue should be used only as a last resort to personal service and termination. This is another reason we recommend that you secure professional assistance.

The birth mother’s relinquishment must be freely and voluntarily signed after the birth of the child and after she is free of the effects of any drugs or anesthesia agents incident to the birth. Furthermore, the mother’s relinquishment cannot be signed until the child is at least 48 hours old. In a private adoption, properly signed relinquishments generally cannot be revoked for 60 days. Within this 60-day period, the court generally decides whether to terminate parental rights. A decision to terminate is, except in very unusual situations, permanent. In an agency adoption, the relinquishment is generally irrevocable once it is properly signed.

Termination is the ending of legal rights and relationships that exist between the child and the biological parents. The steps for termination vary according to whether the termination involves a private adoption or an agency adoption. In the termination order, the court will appoint someone as Managing Conservator of the child. A Managing Conservator is responsible to the court for the welfare of the child until the adoption is finalized. The adoption agency, one or both adoptive parents, or the state (in DFPS cases) commonly become Managing Conservator(s).

Check with your hospital to determine its requirements regarding what paperwork must be completed prior to the child being released to the adoptive parents. Hospitals must, by statute, accept a Third Party Release and release the child to whomever the birth mother dictates.

Adoption Proceedings
The courts, agencies, and DFPS require a pre-adoptive home screening (also known as a home study) be performed in the home of adoptive parents prior to the placement of the child in the home. The adoptive parents must also obtain a Texas Criminal History Report. Courts generally require that the child live in the home for six months before granting an adoption. During this time, the post-placement supervision requirement is usually fulfilled. This six-month requirement can be waived only if the court finds “good cause.” Generally, this requirement is only waived in private adoptions (including step-parent adoptions) as most agencies will not agree to waiver.

If the child is an American Indian child, very powerful federal laws must be complied with if the child falls under the federal act. The Indian Child Welfare Act is very complicated and if you suspect the child may have an American Indian heritage, you will want to seek legal counsel to ensure the requirements of the act are met.

In all steps of this process, the court must consider the best interests of the child. During the termination process an attorney or guardian (called an amicus attorney or an ad litem in DFPS cases) is commonly appointed by the court to report on the best interests of the child. The law states that a final adoption is truly final. There is generally no way a properly handled adoption can be rescinded or revoked. The infant you recognized long before as “your child” is now so recognized by the law.

Contact us to discuss your adoption questions.

Excerpts taken from Texas Young Lawyers Association publication, Adoption Options.

Online Links for Adoption

There is a lot of information about adoption on the Internet. Here are a few trusted sites:

www.adoptionattorneys.org – American Academy of Adoption Attorneys, a well-regarded organization of adoption attorneys across the United States and Canada.

www.cradleofhope.com – Can provide information about designated adoptions.

www.adoption.org/adopt/national-adoption-clearinghouse.php – National Adoption Clearinghouse (NAC), a resource for Children & Families.

www.adoptivefamilies.com – Adoptive Families, the award-winning national adoption magazine, dedicated to providing information for families before, during, and after adoption.  They have a wonderful Adoption Planner and you can request a free one.

www.adoption.com – The largest adoption website with tons of articles and helpful information and links.

Contact us to discuss your adoption questions.