Foreclosure Victims Deserve to be Heard in Court
There are no signs of the foreclosure problem fading. Across the country about 940,000 houses are in some stage of foreclosure during the third quarter of 2009. Either it is a default or auction notification or the house is taken over by the lender. In New York State the filings shot up by 11% in the third quarter compared to the previous quarter.
Inside this crisis there is another crisis about which few are aware of. Right across USA those with low income are in trouble because they cannot avail of legal help. This is leaving them to be exposed to be victimized once more.
If action is taken now, this can be avoided. A recent report from Brennan Center for Justice shows that in New York State as many as 84% of the defendants from Queens who had contracted sub-prime mortgages and are now facing foreclosure, are going ahead without legal help. In Staten Island and Nassau the proportion is 91% and 92% respectively.
The financial collapse did not take place because of lack of legal help for the needy but it has magnified it. Many foreclosures could have been avoided if the poor had been given legal assistance. In fact their ignorance was one of the main reasons why they were easily made to swallow the toxic loans initially.
The law of economics cannot be blamed for this problem. People are unaware about the restrictions placed on Legal Services Corp., by the federal government, during the middle of the 90’s. Availability of federal funds came to be restricted and a ban was placed on class action suit. Consequently the lawyers funded federally lacked the right to challenge rampant illegal operations except on a very tardy basis taking up each case one by one.
These limitations are telling on the counseling for the poor who are already hampered by lack of funds to meet the increasing demand for help. The inequality that this has created is galling. The lawyers representing the lenders are armed with a full arsenal of tools to chase the house owners while the latter have no other alternative but to brave it out alone. Even if the poor manage to put up a lawyer the latter’s hands are tied by federal restrictions.
The panacea is simple – allotment of more funds for legal help to start with to be followed by the Congress stepping in to remove legal restrictions.
