Laura Klein Abel
In the Nation: Lawyers for Poor Muzzled in Subprime Mess
Cross posted from The Nation:
In the next two years, 2 million families who took out subprime loans will face losing those homes to foreclosure. Their families will suffer, neighborhoods will be devastated and local governments will lose significant tax revenue. Economists trace the problems back to careless and sometimes fraudulent mortgage lending practices. Some lenders coaxed first-time low-income home-buyers to take out mortgages, or long-time homeowners to take out second mortgages, without disclosing the high monthly rates they eventually would have to pay. Not surprisingly, the homeowners cannot afford the monthly payments, and when they fall too far behind foreclosure proceedings start.
Now policy-makers are asking how we could have allowed such a widespread financial disaster to occur. They point to lax federal and state regulators, irresponsible mortgage companies and a financial sector too reliant on the housing bubble to examine the mortgages in which it invests. There's another cause, though, which is largely ignored: restrictions that have prevented federally funded civil legal aid lawyers from fully addressing the problem from its inception.
Civil legal aid lawyers, who work for non-profit organizations around the country, represent low-income people in the sorts of civil cases most important to their daily lives: housing issues, child custody, wage and hour law violations and consumer fraud. They are an essential part of our nation's law enforcement apparatus, because they ensure that the businesses and government agencies that operate in low-income communities do so according to the rule of law. Civil legal aid attorneys also serve as a detection and warning system for problems plaguing low-income communities. As the people most familiar with the legal problems of the communities in which they work, often they are the first to learn of new legal abuses occurring in those communities. Over the years, civil legal aid lawyers have spoken out and prompted change when the police refuse to respond to domestic violence calls, when foster care agencies place children in unsafe foster homes and when local employers repeatedly fail to pay the minimum wage.
Click here to Continue Reading