The impoverished foreclosure victims are sans proper legal help. More than 300,000 residential houses are being served with a foreclosure notice per month. The situation has become all the more crushing because of the lack of proper legal help for the hapless foreclosure victims.

As per the findings of a new survey conducted by Brennan Center for Justice this legal impasse has been highlighted. It read, “The nation’s massive foreclosure crisis is also, at its heart, a legal crisis.” The huge majority of the foreclosed borrowers are left to fend for themselves without legal help.

The instance of Nassau County of New York can be cited. 92% of the borrowers who are facing foreclosure because of exotic mortgage loans like sub-prime do not have any lawyer to represent them.

Legal help is vital – it makes the difference between losing and keeping the home. The lawyer can put on hold foreclosure proceeding or pressurize the lenders to make them sit at the negotiating table. The lawyer can intervene in many ways than one like putting into force consumer protection laws or nosing out violations of the law by the lenders.

The report points out two reasons for the homeowners failing to get the right kind of legal support. The first is money. This is not surprising because it is the money problem that has put them in this fix.

The Legal Services Corporation is the main agency that offers legal help for those with low income. In 1996 its budget was reduced by a third. To provide the corporation the level of funds it had got in 1981 would have necessitated an additional $753 million. Washington would not have hesitated if Goldman Sachs or any other jumbo financial body needed that kind of money. Even if it had been ten times more the cash would have been made available. But those with modest income have no influence in the corridors of power. It is little wonder then that Legal Services Corporation has become powerless to move.

The second hurdle is that intentionally the system has been structured in such a way that there are restrictions in getting legal help. There are serious limitations to the ability of homeowners of seeking legal assistance. For instance there is a bar in bringing class-action suits. Moreover they cannot make the plaintiffs pay the fees of the attorney although normally the law permits it.

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Foreclosures have opened the door to ownership of affordable houses. There is activity everywhere. Jame Villardi is busy with repair work estimated at $70,000 on a three bed roomed house on Searing Street. This is one of the four tidy boarded up foreclosed units in Hempstead, New York.

Vilardi of Bedford Constructon Group hopes to get more such houses from Fannie Mae. His venture is a new one partnering with Nassau County with Long Island Housing Construction.

These six units are the first bulk acquisitions by the state using federal funds from Neighborhood Stabilization Program. The plan is to purchase, renovate and then sell or rent out the properties which otherwise would have been an eerie curse on the locality. By doing so many are getting the chance to purchase affordable homes. The price varies from $195,500 to $311,750.

The houses that are keeping Vilardi busy require anything from $10,000 to $65,000 for renovations and repairs. These are located at Elmont, Valley Stream, Westbury, Massapequa and Glen Cove. Vilardi has jumped into the fray with his team of electricians, plumbers and carpenters apart from sundry others. He is optimistic to have all the six units ready with two to three months time. The price asked for these will be about $190,000. Preference will be give to first time nest builders. Certain guidelines for purchase have been laid down by the feds.

Vilardi thinks that unless housing is made affordable the young will move away from this area.

Vilardi will not be making much profit out of his efforts. He will get a fee of 7% of the total development expenses for each unit. His gains will be minimal compared to what he would have got from the private sector. But he has a mission in life and is passionate about affordable homes. This is his way of getting his passion fulfilled.

Last autumn HUD sanctioned $3.92 billion for the stabilization plan in those areas that have been especially badly hit by the surging tide of foreclosures The funds included $7.8 million for Nassau County, $5.6 million for Suffolk County, $2.17 and $3.72 million for the towns of Babylon and Islip respectively. Nassau and Suffolk would be getting some additional funds from the state.

Nassau County executive Thomas R. Suozzi is hoping more developers like Vilardi will come forward to change the economic health of these neighbourhoods.

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The Long Island civil courts are jam packed with foreclosure cases as the housing crisis is not showing any signs of turning. The flood of foreclosures has no other source of outlet but to pass through the lone single drain – the civil court system.

Nassau and Suffolk have been worst affected by foreclosures. It continues to be battered. The court officials are however confident that they will be able to handle the onrush. They are assigning judges who will deal with foreclosure cases only. Meetings between lenders and borrowers are also being made compulsory before the start of the foreclosure proceedings. It is hoped that this step will go a long way in clearing the clog in the drain.
Many others are concerned that the court houses will be unable to manage the flood. Tackling foreclosure cases will delay the handling of other civil suits like divorce etc. Already these fears are proving to be true. A couple of years ago before the numbers had swelled a foreclosure case took about a year to be completed in Suffolk. Today the time covers one year and a half and sometimes even two years.

Richard Clarke of the civil court of Suffolk said, “We’re inundated. I really can’t see anything that’s going to help us now.” Clarke has so far been busy handling incoming files all relating to foreclosures. He stuffs them into bulging cabinets in Riverside courthouse.

In Suffolk County last year (2008) there had been 7,100 foreclosures – it being the highest number in the state. Since 2005 the annual foreclosure numbers in Suffolk, Queens and Nassau have tripled. The case pressure jumped by 23% in Suffolk. In Nassau it went up by 11%. It is obvious that this is because of the rush of foreclosures.

Bill Friedman a lawyer from Hempstead said, “Everything is getting piled up and everyone is screaming. When you start jerking around and making these remedies inaccessible, what lenders are going to lend in New York? The answer is none. Once you delay the resolution of problems you make the state very unattractive for business.” Civil courts are where disputes between individuals, business houses and banks are settled. If the flow of clearing cases is not kept up then the place becomes uninviting to business interests. The problem is that there are not enough judges to make things roll said Suffolk administrative judge, H. Patrick Leis.

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