When Ms. Joyce Pryor applied for legal assistance with Lone Star Legal Aid (LSLA), she was in the process of remodeling her home because it had been damaged by Hurricane Harvey. She purchased her home in 1988, and after 30 years and a hurricane, it needed some love. Luckily, Ms. Pryor qualified for assistance in repairing her home through a program with the City of Houston. The work began then almost immediately stopped. The contractors helping Ms. Pryor discovered a lien on her property. Ms. Pryor didn’t know that there was a lien on her property and had no recollection of ever doing business with the lien holder, Grammercy Insurance.
Shalette Mitchell, staff attorney in LSLA’s Foreclosure Prevention Project, took Ms. Pryor’s case. After some research, attorney Mitchell found that Grammercy Insurance was previously in the bail bond business, but had since let its license expire. Ms. Pryor is one of a string of recent applicants that have sought help from LSLA, all of whom face the same issue: liens on their homestead from a bail bonding company.
This brings us to Barbara Talton King. Ms. King purchased her property in 1992. According to Harris County Appraisal District records, Ms. King was granted a homestead exemption on her property in 1995. Ms. King was induced to offer her home as collateral for a bail bond in 2005 by ABC after a family member was arrested and unable to make bail. She wasn’t aware that ABC hadn’t been paid. Furthermore, her family member later passed away – in jail. The transaction hadn’t come to her mind at all, until 2017 when ABC tried to foreclose on her property.
To secure a bail bond, most bail companies require some form of collateral as proof that you can pay if the terms of the bail are violated. Depending on the amount of the bail, the bail bond company might require you to use your house as collateral. Even if you have other assets that could pay off the bail, many bail companies prefer the security of having real estate as collateral.
If a property meets the conditions to be posted for collateral, the bonding company will file a lien on the property to ensure the repayment of the bond. This lien will be released if the defendant attends all required court dates and the case is closed. There is, however, a significant risk to the property owners if the defendant decides to skip bail, as the lien contract gives the bonding company the right to start foreclosure proceedings at its discretion. At this point, if the property owner cannot come up with cash to cover the bond, the bonding company can foreclose and then sell the property to cover the amount of the bail without going to court.
The home Joyce Pryor purchased in 1988 is her homestead. The home Barbara King purchased in 1992 is her homestead. A homestead is a person’s principal residence, where s/he lives. The state of Texas has robust legal protections for homesteads enshrined in the state Constitution.
A homestead cannot be used as collateral for a bail bond. According to the Texas Constitution, there are only eight types of valid debts that can have a lien placed against a homestead, which are as follows:
1. Purchase money;
2. Property taxes;
3. Owelty of partition;
4. Refinance of a lien against the homestead;
5. Work and materials for improvements;
6. Home equity loans;
7. Reverse mortgage loans; and
8. Conversion and refinance of a personal property lien secured by a manufactured home.
A bail bond lien is not one of the debts that can be placed against a homestead under the Texas Constitution. Attorney Mitchell was able to defend the properties of Ms. Pryor and Ms. King from foreclosure and get the liens released by the bonding companies, but she remains concerned about the multitude of other homeowners who may be in the same situation.
“We stand ready to help other eligible homeowners protect their homes from these illegal liens,” said Amir Befroui, Managing Attorney of LSLA’s Foreclosure Prevention Project. “Homeowners who are concerned about liens placed on their homes by bail bond companies can call LSLA for help.”
Lone Star Legal Aid is a 501(c)(3) nonprofit law firm focused on advocacy on behalf of low-income and underserved populations. Lone Star Legal Aid serves the millions of people at 125% of federal poverty guidelines that reside in 72 counties in the eastern and Gulf Coast regions of Texas, and 4 counties of southwest Arkansas. Lone Star Legal Aid focuses its resources on maintaining, enhancing, and protecting income and economic stability; preserving housing; improving outcomes for children; establishing and sustaining family safety and stability, health and wellbeing; and assisting populations with special vulnerabilities, like those who have disabilities, or who are elderly, homeless, or have limited English language skills. To learn more about Lone Star Legal Aid, and how to apply for legal services, visit our website at www.lonestarlegal.org.
Media contact: Clarissa Ayala, firstname.lastname@example.org.