Day 3: KEYNOTE: Empowering Heirs: Fannie Mae’s Program for Retaining Ownership and Returning Home After Disaster with Tim Carpenter
“Home ownership is about stability. Homeownership is about building wealth. Homeownership is about families. But if you don’t have a clear title, you don’t know if that stability is going to be there.” —Tim Carpenter
2024 WILDFIRE LEADERSHIP SUMMIT
Disaster strikes, but for some, the real battle is just beginning. Millions of homes across the US are caught in a tangled web of heirs property— families without clear title to their generational land. This legal limbo leaves them vulnerable to losing everything. Thus, understanding the challenges of heirs’ property is crucial for supporting vulnerable populations in the aftermath of crises.
Tim Carpenter is a seasoned disaster recovery expert at Fannie Mae, with over 25 years of experience navigating the complexities of post-disaster housing. As the leader of Fannie Mae’s disaster response team, he brings a wealth of knowledge and a deep commitment to serving impacted communities.
Tune in as Tim talks about the critical issue of heirs’ property, Fannie Mae’s efforts to address it, and the holistic approach needed for effective disaster recovery.
Highlights:
- 00:22 Spelling Fire
- 05:33 What is Heirs Property
- 12:17 Is Heirs Property Applicable in All States?
- 17:41 The Here to Help Network
- 22:00 Stability and Wealth Matters
Twitter:
Millions face losing their homes and generational wealth. Learn more about the legal complexities of heirs property and how to protect your family’s legacy with the Director of Disaster Recovery & Resilience for @FannieMae, Tim Carpenter. #Recover #Rebuild #Reimagine #podcast #wildfire #DisasterRecovery #AfterTheFire #2024WildfireLeadershipSummit #HeirsProperty #FannieMae #RuralHousing #EstatePlanning #LandOwnership #HousingCrisis #AffordableHousing #SocialEquity
Quotes:
00:49 “We don’t know what’s good and bad, and we have to be thankful for both.” —Tim Carpenter
13:56 “Home ownership is about stability. Homeownership is about building wealth. Homeownership is about families. But if you don’t have a clear title, you don’t know if that stability is going to be there.” —Tim Carpenter
17:58 “Our guidelines don’t work today with that cash-out refi. So we can change the whole thing and play again and try it. We may fail at this one, but we’re going to try.” —Tim Carpenter
20:43 “Don’t pay off your mortgage until you have a plan.” —Tim Carpenter
22:54 “If it doesn’t sound right to you, then ask again.” —Jennifer Gray Thompson
Meet Tim Carpenter, Director of Disaster Recovery & Resilience, Fannie Mae
Tim Carpenter is a long-time employee at Fannie Mae, with over 25 years of experience at the organization. As a disaster expert, Carpenter has been deeply involved in Fannie Mae’s efforts to support communities affected by major disasters, such as hurricanes Harvey, Maria, and the Tubbs fire.
Carpenter has been instrumental in driving Fannie Mae’s initiatives to develop new products and services to better assist homeowners and communities in navigating the recovery process. His expertise and dedication have been invaluable in Fannie Mae’s holistic approach to disaster response and community support.
Connect with Fannie Mae:
- Website:https://www.fanniemae.com/
Facebook: https://www.facebook.com/fanniemae - X: https://twitter.com/FannieMae
- Instagram: https://instagram.com/officialfanniemae
- LinkedIn: https://www.linkedin.com/company/fannie-mae-corporation_19722
Meet Jennifer Gray Thompson, MPA, Founder & CEO of After the Fire USA
Jennifer Gray Thompson, named one of Forbes’ “50 over 50” IMPACT Leaders in 2022, has led Rebuild North Bay Foundation since January 2018, transforming it into a national leader in mega fire recovery. A lifelong Sonoma Valley resident, she holds a master’s degree in Public Administration from USC and has worked for the Sonoma County Board of Supervisors. Post-2017 North Bay fires, she became Executive Director of RNBF, which aids wildfire-affected communities across the American West. As CEO, she developed the Wildfire Resiliency Network and Survivor Deployment Model, advocated for federal policies, and hosted national Wildfire Leadership summits. Jennifer also created the “How to Disaster” podcast and serves on boards supporting Latino communities and first responders’ mental health.
Connect with After The Fire USA:
- Website: https://afterthefireusa.org/
- Facebook: https://www.facebook.com/AfterTheFireUSA
- X: https://twitter.com/AfterTheFireUSA
- Instagram: https://www.instagram.com/afterthefireusa/
- LinkedIn: https://www.linkedin.com/company/atf3r
- YouTube: https://www.youtube.com/channel/UCuTefxZgWUJkDVoZGZQpxgQ
Transcription:
Tim Carpenter: When you’re going to talk, you practice. You figure out what you’re going to say, and then the day happens. All morning, I kept thinking, I really wish I never met Jennifer. I know, I’m serious. Had the fires not happened, I wouldn’t know her. And it just takes me back to the very fact that we don’t know what’s good and bad, and we have to be thankful for both. I am very thankful to have met Jennifer, to know Jennifer and to work with her. But I really wish I never had to know her. I know the feeling across this room is that it’s a horrible thing, that we all have to come together and talk about what we’re talking about. But it can be good. It can be good. Tim Carpenter, Fannie Mae.
Why is Fannie Mae care? Fannie Mae, here’s the two minute one and a half minute commercial. Fannie Mae, we buy loans, we buy mortgages. We buy a lot of mortgages. We hold about one out of every four mortgages in the country. We hold about 20% of all multifamily mortgages, apartment mortgages in the country. And so when disaster happens, we’re impacted. Our portfolio, our book is impacted. I’ve been at Fannie’s for over 25 years now. And when Harvey, Maria, and then the Tubbs fire happened, Fannie said, look, Tim, you’ve been at Fannie for this for a long time. Live outside of New Orleans, so of course, I am a disaster expert. Of course, I know everything because I live outside of New Orleans and lost my first home. I know disasters. They said, why don’t you take over this disaster group? And we go in and try to work with communities, try to get boots on the ground, try to come in and understand what’s happening, and how we can improve it. We met with Jennifer, and I knew fire. I knew how to spell fire. That’s about all I knew about fire. But she’s brought us in community after community, after community. And now I’m no longer a novice. I have an understanding. But what I do know is that no matter what we do, we can’t do enough. And there are communities that are not being served, and communities that miss out.
And with that, we’re going to play a quick clip.
Dasha Burns (reporter): In Bucksports South Carolina, the battles are fought through faith and community. People here can trace their roots back to over a century of life on this land, which has been passed down generation to generation. Often informally without a will. The legal term for that is heirs property.
Kevin Mishoe: It’s always called family land. It was only after post flooding that we understood that that had a legal ramification to it as well.
Dasha Burns (reporter): Bucksport is in an increasingly flood prone region. Back to back, hurricanes in recent years devastated the area. And in 2018, hurricane Florence destroyed Hazel Bellamy’s home.
Hazel Bellamy: That’s that water line from Florence.
Dasha Burns (reporter): She found out that she lives on heir’s property when she applied for FEMA aid.
Hazel Bellamy: They couldn’t approve of certain things. It was a nightmare.
Dasha Burns (reporter): Hazel’s name is not on the deed. None of her living relatives are either. That meant that they couldn’t prove the land was theirs according to long standing FEMA funding requirements.
Jennie Stephens: Heir’s property owners can’t get a mortgage to have limited to no access to housing repair money, because you cannot prove clear ownership.
Dasha Burns (reporter): FEMA’s new policy will change that by expanding the list of documentation they’ll accept for individual assistance. But the heir’s property owners are still not in the clear.
Jennie Stephens: Any moment, an heir could sell his or her share, which then makes everybody vulnerable to having their property lost.
Dasha Burns (reporter): When someone dies without a will, their heir’s, kids, grandkids, great grandkids and so on all own the land jointly as tenants in common. A property could end up with hundreds of part owners. And if just one of them decides to sell their share, that could result in the forced sale of the entire property below market value. About 60% of African-American owned land is heir’s property, and vulnerable to land grabs. Bucksport, just 30 miles from Myrtle Beach is a prime target for developers.
Kevin Mishoe: Development could be good and bad. But when you’re in heir’s property, this is definitely going to be a bad thing.
Dasha Burns (reporter): And it’s not just a problem for Black Americans. It impacts the Native American community, people in Appalachia and the Latino colonials on the border.
Jennie Stephens: Heir’s property is an issue among low income. Low income folk do not sit around the dinner table and discuss estate planning.
Dasha Burns (reporter): And fixing it is often unaffordable. Hazel’s family paid a lawyer $7,000 to update their deed. And did it get you guys anywhere?
Hazel Bellamy: No. They wanted more money, and we couldn’t afford it.
Dasha Burns (reporter): Are you worried that you might not be able to protect this property?
Hazel Bellamy: I am. This is our home. This is what our parents left us. This is our heritage. This is where we belong.
Dasha Burns (reporter): Dasha Burns, NBC News Bucksport South Carolina.
Tim Carpenter: I could go on a long conversation about heir’s property, but I thought this was a good clip to help bring it home. Help describe what it truly is. Living outside of New Orleans, I came across heir’s property for the first time. I’m like, oh, this has got to be a New Orleans thing. We do things differently in Louisiana, I’ll admit. But it’s got to be a New Orleans thing. Then we saw it again in Puerto Rico. And we saw it again in Hurricane Harvey in Florida. And it’s like, this is not just a Louisiana thing. And Sidra, my friend and coworker will tell you that after Puerto Rico, after Maria, every meeting that I attended at Fannie Mae, any gathering, anytime more than two were together, I’d raise my hand and ask, well, what about heir’s? What are we doing about heir’s? Are you aware of heir’s?
After a few years of beating up people talking about heir’s, he said, Tim, shut up here. Have some money. Go give some money to some groups and do some studies, and do find out some stuff. And we worked with a group in Louisiana. I worked with a group in Alabama, worked in a group in Florida, and discovered a little bit more. I came back to Fannie and said, here, here’s some information. And they said, no. You know how we work. We need data. We need to know how big this problem is. If we’ve got $4 trillion worth of mortgages that we hold, we just don’t do something unless we understand the data. And it’s like, okay, how big is it? That was my answer. It’s big because, like they were saying, you can’t get help. Yes, you can now get IA. And everybody here knows that IA, you can get up to 45,500. Anybody knows it, except Chris. You can’t answer. Anybody that got full IA funding? We know that that IA is only going to be a fraction of that amount. An IA alone can’t get them home. They can’t get DR money, they can’t get an SBA loan. They can’t get those fundings. The Inflation Reduction Act, all the weatherization, all of that money. If you don’t have a title, you can’t get it. You won’t have the resources to get your house fixed. You won’t be able to tap into the equity in your home to fix your roof, or to come up with the additional funding. The additional money that you need to finish your rebuild, you also just get lost in the system. So Tim, what are the numbers? I found out that because we buy so many mortgages, we have a couple lists that we have access to. We have a list of every single mortgage in the country. We have access to a list of every single tax record in the country. And if you take those two lists together, you can start coming up with some different characteristics to try to identify heir’s.
And our work in Florida, Alabama and Louisiana gave us an indication that we were able to find areas where people had done the research in one individual county or one area and said, heir’s look like this, this, and this, and this. I am not going to tell you exactly what categories we used. I won’t tell anybody, because I’m not going to give those bad guys that want to steal property a map to find heir’s property. I will say that in 1910, Black Farmers owned 19 million acres of land in this country. Today, Black Farmers may own 4 million acres of land in this country. As they said, it’s not just African-Americans, it’s across the entire country. So we contacted a group called the Housing Assistance Council hack. One of the foremost nonprofit organizations involved in rural housing. We took data from 3,150 plus counties, all collected differently. Every county does all of their data differently. We took that information, we pulled it all together, and we had to come up with a way to make whatever we decided in Alabama could be used in Nevada. We did fail in six states where we don’t think the data was good enough, and we couldn’t stand by the numbers. That number is only residential property. It’s not vacant land, it’s not commercial, it’s not farmland. It’s only residential properties. It is super low. It is a baseline. It is wrong because it is so low.
I can promise you in Hawaii, it does not accurately count or identify the Hawaiian Homelands. I can promise you that it does not count any land held in federal trust because counties don’t have that. I can promise you that it is off, but it’s our baseline. Now when they ask, what’s the size? I can say, I know it’s at least $32 billion of property that’s not being touched. $32 billion of property that we started seeing, that it would cluster. These properties would cluster. And it wouldn’t be just one heir’s property on a street or an area. These properties are the deferred maintenance is a kind word. These properties, in many cases, are falling apart because they don’t have access to the funding. I’m not able to go out and get a mortgage, and I can’t even sell it. Why would I put that money into it? Not everyone that has heir’s property is in need of cleaning it up. There are some situations where you shouldn’t elderly aunt sick on Medicaid, but it doesn’t have a clear title. Don’t work to clean up that loan that property, because when she dies, Medicaid will go after recovery and take her land if she has clear title. There are situations where family members have made it work, where the family house is the safe place for people who need a place to live at times. There’s other ways that it might work in that system, in that situation, but it doesn’t work across the country. When we start looking at the states, these are the top 10 states where the heir’s property is. That first mention of where they are, two out of three are in rural communities.
And as we start looking, I wonder where fires happen. We know that the prominent area of fires are in rural communities. This is an issue that we all have to focus on. This is an issue that we need to make sure that when we’re talking with our leadership about the action plan for the CDBG-DR, that heir’s are part of that conversation. When we’re talking to people about what we need to do as we have the community together, we have to talk about estate planning. It’s great to say that you need a will. And that’s right, you do need a will. But if grandmother writes a will that says, I’m leaving the house to all three children and to the grandchildren. We have now created an heir’s problem. We’ve got to do this in a way that is truly legal counseling and financial counseling, and that’s not something that you can do on a website without getting in big trouble. And so it’s got to be one by one. Every time we get people together, especially low income people, low income families, we’ve got to make sure that they do talk about death, and that they do talk about planning, and that they do talk about how we can build and save these assets. Home ownership is about stability. Home ownership is about building wealth. Home ownership is about families. But if you don’t have a clear title, you don’t know that that stability is going to be there. The wealth is not going to be there, and it’s just something that we have to move forward with.
Okay, all of this is great. I love all of this stuff, but it always leads to an important question. I’m asking you to, one, download the report. I’m waiting, everybody gets the phones. Two, as we talk about disaster and disaster recovery, know that we have to think about heir’s. Know that we have to have that in the conversation. Working on heir’s has been included in at least one action plan that I’m aware of. It was included in the Florida action plan. It is something we have to talk about often, and it is something that we cannot resolve with one pro bono attorney working with one family at a time, because we’ll never get there. We’ve got to make it a conversation with a big, much bigger audience. The first time I started talking about heirship at Fannie Mae, the legal team came back and said, so we’re talking about their rights? No, heir’s property. Is that a rock band? It’ll take some time, but it’s something that we can all have an impact on.
So what for me is that now, Fannie’s going to keep going, put more information on our website to help direct people to some of the resources out there when we work on disaster. What we’ve learned is that, in a positive way, first, we know that every community has an affordable housing crisis. Disaster happens, and that crisis is magnified. It’s the power of 10 in some cases. What we also know is the political will to do something about housing, sometimes for the first time in our lives, the political will is there to do something different to try something new. And at this point, what we do with disaster communities is try to come up with new ways to do it. New ways to come out of forbearance, new ways to come up with products that can provide financing for nonprofits to buy homes and to make them affordable for rentals. We are going to try to come up with an heir’s property product. We have an existing product. It’s a cash-out refi. We don’t make the loans. We buy them. We put out the guidelines, and our lenders go out and do the work. Then deliver the loan to us.
Cash-out refi in our present guidelines doesn’t work at all. Because with this cash-out refi, we need to give enough money to the owner class/buyer to buy out the other family members. We need to allow maybe a little higher amount of money to be paid to the lawyers for the legal work, and we need to make sure there’s enough cash-out to fix the roof. Our guidelines don’t work today with that cash-out refi so we can change the whole thing and play again, and try it. We may fail at this one, but we’re going to try. What we saw after Harvey, after Maria, and after the Tubbs fires was that communities didn’t know how to do disaster. And even the housing advocates don’t know how to do a disaster. They’re not trained in working with insurance companies, working with proceeds, working with forbearance procedures. And so one of the things we set up was a national disaster and hardship counseling platform. We’re a nonprofit. 24/7 across the country can be called. Anyone being impacted by a hardship or disaster can get help through our network. When we set it up and hired this nonprofit to run it, one of the first things we said was we don’t want to just make it another 1800 number. There’s too many 1800 numbers.
Let’s make it to where, if Tim calls, Tim gets assigned Jennifer. And Jennifer is my advisor, my counselor, and for free. Whether you’re a homeowner or renter, for free, we say for 18 months. But it can go longer. Tim and Jennifer talk, and Tim doesn’t have to tell Jennifer, well, I had to move my parents, and my dad died, and then I lost my job. Jennifer knows all that after our first conversation. And Jennifer says, Tim, look, I want you to do these three things. Jennifer doesn’t tell me, I want you to do these 20 things. She gives me that small list and says, do these three things, and then let’s talk next Wednesday. And Jennifer understands that I may only get two done, but she’s going to be there to support me to tell me that it’s okay to talk to your mortgage company. To tell you that the insurance proceeds, if you take that check, it doesn’t mean that you can’t go back and fight, and ask for more. If FEMA denies you, Jennifer is going to be there and help you through that appeal. And all these pieces are important. We’ve had over 350,000 people go, contact and work with our disaster response here to help the network. It’s free. It’s out there. Be aware.
One of the first things that we became very aware of was after Paradise, where everyone paid off their mortgage. From our book, 95% of the mortgages in Paradise were paid off within the first two months. And it’s like, this is not good. Number one, you miss out on the potential of an SBA loan if you prepay off your mortgage. Two, you take out a low level mortgage today, and you pay it off, and you have to have perfect credit to get a construction loan. And then three, your new mortgage is going to be at a higher level than the one you paid off. And we started working with Jennifer and After The Fire and said, let’s make sure in every event, the first message is, don’t pay off your mortgage until you have a plan. And we saw that in Colorado, those numbers drop down when that message was put out there. We’ve seen it in Hawaii. Our prepay has been very low. It’s starting to creep up again. We think some of them are maybe second home investors that don’t want to stay and are paying off. But it’s not that 95% that we saw in Paradise. So it’s working. All of this says that when we jump in, and Jennifer brings us into that community, we want to be there for you, with you. We want to learn, we want to help, and we want to treat everything holistically. I told you at the beginning that we have one out of every four mortgages. Well, if that one mortgage comes back, but the ones around it don’t, what good is that house? What good is that loan? So we’ve got to think holistically to say, what can we do for the community?
I thank you. I wish I didn’t have to know Jennifer. I am thankful for knowing her, and I’m thankful for all that I’ve learned and experienced and felt this week.
Jennifer Gray Thompson: Thank you. I actually often make jokes. I have very few jokes when a disaster happens, but I do start this joke. I’m like, you get a Fannie Mae, and you get a Fannie Mae. But it is a hard thing to break through so I encourage that for any of you, when you do encounter a disaster, or people or friends are calling you, especially if you have a high social capital, let them know that there are things out there, that there actually isn’t a catch. There isn’t a catch. There’s nobody going to cut, they’re not selling you to a marketing campaign. They’re not coming after you. Fannie Mae, doesn’t care if you’re one of their clients. You can be a renter. Their HUD approved counselors, so all of that is entirely there for you. And there’s also the deferment issue, because there’s a lot of bad information. Lenders don’t even understand it, for the most part, that you don’t have to do a balloon payment. If it doesn’t sound right to you, then ask again and use the service, because they actually do understand what Fannie Mae offers. I’m just going to do one thing before I leave you for lunch.
Sidra Goldwater is also back there, my very dear friend as well. And she’s been to Maui twice. Tim went to Maui right initially. And Sidra is a genius. So if you go to Sidra and say, here’s some of this puzzle that we see that’s happening with really predatory loans on MHPS, because I’m not allowed to say trailers. They keep telling me this for seven years. If you see any kind of predatory lending or anything, then Fannie Mae went back and created a product which actually benefits nonprofits like community land trusts so that they can buy the land. They will do financing. People can then buy the Home share, essentially. And then they’re buying into that as a collective way to have stability and wealth matters. I get it, but it is the stability for the entire community. So Fannie Mae goes way beyond that. I feel like Sidra, Tim and the team, they’re very responsive to what’s actually needed, and what can make it much more humane in order to go through this really terrible process. So thank you so much. Big hand for Tim and Sidra, thank you.