The holidays are here and you know what that means: New Year’s Resolutions. I recently caught up with Attorney Sarah Poriss who I’ve known for many years and realized she had an interesting perspective for employers and how to start the year off right. Sarah runs her own small firm focusing, in part, on foreclosures for individuals. Recently, she’s been handling matters for homeowners impacted by the crumbling foundation crisis happening in eastern Connecticut. What follows is an edited online conversation we had following my meeting with her and continues a long-running (if rarely repeated) series I’ve done conducting interviews with people outside my firm. I hope you enjoy.
Dan: So, before we talk about crumbling foundations, you had mentioned that you’ve gotten a great appreciation for an employer’s perspective by running your own business. What have you seen?
Sarah: Now that I am an employer, I have begun to appreciate the value of a focused and efficient staff. It can be distracting enough when something good or exciting happens in the life of one of my staff; it’s even worse when they experience something stressful or tragic.
My goal is to provide a workplace that allows time for their family and personal needs, but I can only go so far when it comes to ensuring they are not distracted by the stress of financial issues.
I’ve had staff with debts in collection, or who are working on their credit with a goal of buying their first home, or who have unexpected expenses due to illness of a parent or child or unemployment of a spouse.
Dan: With that in mind, what’s do you try to achieve?
Sarah: Whenever I’m dealing with my staff (and clients) who present with these issues – I really do try to work with the aim of providing some peace of mind so we can all get back to work (I actually feel like I’m more of a sleep specialist than a lawyer at times).
Dan: For those of us used to paying a mortgage each month, I confess it’s tough to know what to say to someone (like an employee) who is facing not being able to make their mortgage payment. What’s some general recommendations you make to those people?
Sarah: The thought of not being able to pay your mortgage is devastating but from my perspective it is not the end of the world. Once a homeowner is three months behind, the lender will not accept a payment unless all missed payments are made, usually all at once. That is typically very difficult, so the homeowner will likely then be on the path to foreclose.
There are still some programs, such as mortgage modification, the Connecticut Housing Finance Authority’s Emergency Mortgage Assistance Program (EMAP) that can help a homeowner in an early stage of default, or a bankruptcy filing.
If those are not options, it usually takes six months of non-payment for a foreclosure proceeding to start in Connecticut. The case then includes the option of attending mediation which stays the matter for up to seven months or more. This gives homeowners the time to get back to work or otherwise work out the problem that caused the default, and to reapply for a modification of their mortgage.
Dan: I’ve seen situations where an employee’s financial situation really does impact the workplace. If an employer receives calls that sound like debt collection calls for a staff person, what is really going on and what can be done to stop it?
Sarah: The federal Fair Debt Collection Practices Act regulates what third party debt collectors can and cannot do in the course of collection of a debt. Calling a consumer at their place of employment isn’t per se a violation, but if the collector is told that the employee cannot accept calls of that nature at work, the collector must not call there again. The staff person receiving such calls is probably also receiving multiple calls per day or per week on his or her cell phone; plus letters in the mail; and the collector may also be trying to call the staff person’s friends, relatives or family members in an effort to get a payment commitment. Most of that is improper.
The larger concern is the staff person may also have other unpaid accounts that are in collection or in suit and this can be a real distraction. People in debt also believe nonpayment of accounts is a crime or that they can be subject to random bank or wage garnishment or even repossession of their cars (even if the unpaid account is not related at all to their vehicle).
Letting a staff person know that having debt is nothing to be ashamed of and pointing out to them they have rights against improper debt collection tactics can go a long way to empowering the staff person and ending the activity that is distracting them from work and constructively dealing with unpaid debts.
Dan: One of the biggest stories in the news in Connecticut this last year or two is the epidemic of crumbling home foundations. What is your perspective on that and what can be done?
Sarah: A quick Google search for “crumbling foundations- Connecticut” will fill anyone in on this mess. I’ve been getting calls from homeowners who are not sure it’s worth paying their mortgages when their home values have been reduced due to having a crumbling foundation, living in a condo complex where some of the buildings have the problem, or even living in a neighborhood or town where other homes are affected even if theirs is not.
Insurance claims for coverage and replacement of foundations haven’t been a successful option and homeowners are choosing to stop paying their mortgages.
They then go into the foreclosure pipeline with their lender and I treat the case like my other foreclosure matters, knowing that there are other issues at play given the circumstances. But this allows the homeowner to save the monthly mortgage payments and make a plan- either to drag the proceeding out as long as possible and then move out, or seek out funding for repair if the home qualifies. From my perspective, the problem isn’t really on the radar of the big lenders and it remains to be seen if these homeowners are treated any differently or if the banks are willing to stay foreclosure while we figure out whether a home can be repaired.