Brennan Center Releases "Foreclosures: A Crisis in Legal Representation"
The Brennan Center for Justice has released a new study entitled, Foreclosures: A Crisis in Legal Representation. The report outlines how the nation's massive foreclosure crisis is also, at its heart, a legal crisis. Many homeowners are losing their homes because they lack the ability to navigate the landscape of our lending laws.
It discusses how our nation's civil legal aid system is ill-equipped to deal with increased demand for legal services. Civil legal aid, always underfunded, has suffered from acute shortages since federal funds were cut by one-third in 1996. Moreover, just as the need for legal representation has reached its apex, the recession has forced state and local governments and private charities to cut their support for legal services.
The report goes on to discuss how the problem is further compounded by federal restrictions imposed by the Congress on the Legal Services Corporation as an outgrowth of Newt Gingrich's "Contract with America" and how these restrictions have undercut homeowners' efforts to obtain protection from predatory lenders.
Abusive lenders enjoy a full arsenal of legal tools, while homeowners relying on restricted legal aid attorneys are barred from joining class actions, claiming attorneys' fee awards, or relying on their attorneys to advocate before legislatures and administrative bodies.
The report offers the following recoomendtations based on its findings:
- Increase funding for foreclosure legal representation - Additional state and federal dollars should be dedicated to foreclosure legal assistance and directed to the hardest hit areas, often the areas with predominantly minority resident populations.
- Remove funding restrictions that undercut effective legal advocacy for homeowners and tenants - Lifting the LSC funding restrictions, a cost-free fix, is among the easiest and most cost-effective ways to improve legal representation for foreclosure victims.
- Expand access to the courts and to other dispute resolution mechanisms for homeowners facing foreclosure proceedings - States that allow foreclosures to proceed without according homeowners a day in court need reform. In every state, lenders should be required to participate in a mediation conference with homeowners before a foreclosure is permitted to proceed.
- Recognize a right to consult with a trained housing counselor and, as necessary, a lawyer - Foreclosure proceedings should be deferred until the homeowner has consulted with either a trained housing counselor, or, where lending violations are suspected, a lawyer.