Kia Franklin

Civil Gideon for Families Facing Foreclosure

The Institute for Foreclosure Legal Assistance, a project of the Center for Responsible Lending, just announced that it is giving $6.5 million in grants to 27 legal-aid offices in 19 states and the District of Columbia, to help victims of the foreclosure crisis defend against loss of their homes.

From the release:

“Every day more and more families are losing their homes to foreclosure, and in most cases these families will not be represented by a lawyer,” said Eric Halperin, director of CRL’s Washington DC office. “We hope that the Institute’s training and its other programs will help not just our grantees but lawyers across the country begin to meet this critical need.”

Subprime foreclosures, already alarmingly high, will accelerate this year and next. More than 2 million families will be forced from their homes as borrowers see monthly mortgage payments jump as teaser rates expire. An additional 40 million neighboring homes will fall an estimated $200 billion in value as a result. Despite federal officials’ pressure on industry to voluntarily modify loans, lenders and servicers simply aren’t doing so fast enough or in sufficient numbers to help homeowners. Moody’s says industry is voluntarily restructuring only 3.5 percent of subprime loans with resetting interest rates.

It makes sense that many families that were victims of predatory lending would lack the funds to hire a lawyer. Also, many legal aid programs are just strapped for resources and have limited staff. So this is a tremendous step for ensuring that families facing foreclosure have a fair shot in court. Of course, we should also be asking ourselves what we think the role of our local and national governments should be in ensuring that justice isn’t out of any American’s reach just because he or she can’t afford a lawyer. This is a continuing conversation that should include not only lawyers and the legislature, but responsible and engaged citizens of all political stripes, professions, and perspectives. This is not a question of whether the government should bail anyone out of a legal bind, it’s about providing the necessary resources and tools to make sure that the legal system works fairly for everyone, regardless of their income.

For more on the foreclosure crisis, check out what Mark Winston Griffith, DMI’s Senior Fellow in Economic Development, has written on DMI Blog. And for more on the Civil Right to Counsel (or Civil Gideon) see here.

Posted at 7:56 AM, Mar 07, 2008 in Permalink | Comments (0) | TrackBack (0)