Private: Brennan Center Study Reveals Troubled Legal Services for Homeowners

Federal and state lawmakers should take action to ease the burdens on homeowners who are facing looming foreclosures, states a new study by the Brennan Center For Justice. In "Foreclosures: A Crisis in Legal Representation," Melanca Clark, counsel in the Center's Justice Program, and Maggie Barron, a communications and strategy associate at the Center, report that government and nonprofit programs to provide legal assistance to homeowners are woefully troubled.

The two write that, "The Legal Services Corporation ("LSC"), the major federal source of funding for civil representation for the poor, reports that nonprofit legal services programs across the nation are ‘besieged with requests for foreclosure assistance.' Too few people are ever able to obtain qualified legal guidance." 

While many people "have legitimate legal defenses" to foreclosures, Clark and Barron say, few are aware of their legal defenses and that the nation's "civil legal aid system" is hobbled.

Clark and Barron maintain:

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 funders 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.

Further compounding the problem, federal restrictions imposed by the Congress on the Legal Services Corporation as an outgrowth of Newt Gingrich's ‘Contract with America,' have undercut homeowners' efforts to obtain protection from predatory lenders. Abusive lenders enjoy a full arsenal of legal tools, while homeowners relying on 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. Congress, through the 2008 Housing and Economic Recovery Act, provided one-time funding for lawyers to help foreclosure victims, but then explicitly prohibited the lawyers it had funded from engaging in any litigation.

The study suggests a number of ways to reverse course, such as increasing funding for legal services and removing restrictions on legal representation for homeowners facing foreclosure actions.

See the entire Brennan Center report here (pdf).

Civil Legal Services, Procedural Barriers to Court