Should Legal Aid Programs Get $$$ From Foreclosure Settlement?

Posted: February 14, 2012 in Uncategorized

The announcement last week that 49 state attorneys general had come to a $25 billion  settlement with five major banks relative to foreclosure fraud came with notice that the settlement contained money for legal aid for foreclosed upon homeowners.   While the amount is hard to determine, one attorney general claimed,  “This will get a lawyer for everyone facing foreclosure in the state.  This will stop every wrongful foreclosure.”

Wishful thinking or reality?  It depends on the lawyers who get the money.  For the last three years, Lawyers from Greater Boston Legal Services (GBLS) and law students from Harvard Legal Aid have teamed with community organizers from City Life/Vida Urbana to wage an effective “shield and sword” combination that has kept hundreds of already foreclosed upon owners housed and led to favorable state and local policy changes.  In Jacksonville, April Charney of Jacksonville Area Legal Aid has pioneered creative and aggressive legal challenges that have been recognized and copied nationally.  Some Legal Aid programs, like Pine Tree Legal Assistance, were quick to recognize the magnitude of the problem and shifted resources program-wide, which led to the robo-signing discovery and lawsuits that prompted the $25 billion settlement.

But others were slow off the mark, and even when they turned their attention to the problem, they found their program cultures and staffs ill-equipped to handle one of the major legal challenges the poor have faced since the start of federally funded legal services.   From my own experience, Maryland Legal Aid was one of those programs from 2008 to 2011.  Despite landing a grant to forge a “train the trainer” model which enabled the Bureau to allocate roughly 2 attorneys (in a 300 employee $22 million statewide agency) exclusively to foreclosure work, the seed sprouted very little.   Attorneys and advocates who were accustomed to triaging a host of legal issues and handling only the familiar, struggled with the complexity of foreclosure work and, not surprisingly, found few foreclosure cases of “merit”  to tackle.  Those that did found themselves in a culture with few tools for litigation support.   For a program that litigated less than 1% of its overall caseload, this was not surprising.

Despite this, I am sure that when the settlement money for attorney aid becomes available, Maryland Legal Aid will get the lion’s share in Maryland.   Other states, however, should examine program applicants carefully and prioritize those that can handle not only litigation, but the creative partnerships with community organizations that expand leverage and led to policy changes statewide.  This will not only “multiply” the impact of the money (as demonstrated by GBLS and City Life), but will facilitate the movement toward  the greater objective:  the human right to housing.

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