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Civil Legal Aid
By Mark Ladov – 01/25/12
In last night’s State of the Union address, President Obama announced a potentially important new partnership between the federal prosecutors and state attorneys general who are investigating our nation’s mortgage crisis. Critically, the investigation will be chaired by New York State Attorney General Eric Schneiderman, who has spoken out on the need to hold banks accountable for predatory and risky practices, and who has used his office to help provide struggling homeowners with much-needed foreclosure prevention counseling and legal services. We applaud this move and will be watching closely to see that it succeeds in its promise of helping families and communities around the nation.
As the President explained: “I am asking my Attorney General to create a special unit of federal prosecutors and leading state attorneys general to expand our investigations into the abusive lending and packaging of risky mortgages that led to the housing crisis. This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans.”
This announcement offers hope that the long-delayed (and much-criticized) 50-state settlement talks over “robo-signing” by foreclosing lenders will be only a first step. The reported rumors surrounding the talks have suggested that a handful of major lenders (Bank of America, JPMorgan Chase, Wells Fargo, Citibank, and Ally Financial) would be required to contribute up to $8 billion for foreclosure prevention and refinancing efforts. This is in addition to setting aside $17 billion for principal reductions for underwater mortgages.
In exchange, the banks would receive waivers of liability for past unlawful practices. The critical question is how broad these liability waivers will be. If the banks are let off the hook, not just for “robo-signing,” but also for abusive and misleading practices in their loan origination and securitization, then there will be little leverage left to ensure future settlements that are better matched to the enormity of the current crisis. Attorney General Schneiderman has been a key critic of any deal that would let lenders off the hook, and his participation in this new effort is a positive sign.
President Obama also illustrated a keen awareness of the roots of this problem. As he said: “Let’s remember how we got here…In 2008, the house of cards collapsed. We learned that mortgages had been sold to people who couldn’t afford or understand them. Banks had made huge bets and bonuses with other people’s money. Regulators had looked the other way, or didn’t have the authority to stop the bad behavior.”
More than three years later, we are only halfway through our nation’s foreclosure crisis — but we have yet to see accountability for this misconduct. Instead, lenders have dragged their feet on helping to get borrowers back on track with their payments — despite the fact that foreclosure prevention will benefit families, communities, and the lenders themselves by helping the housing market to recover.
We need a serious investigation into the origins of this crisis. And we need federal and state authorities to leverage those investigations, and to press lenders to finally embrace the kind of large-scale modifications of failing and at-risk mortgages that must take place to dig us out of our economic malaise. We hope this federal/state initiative will help provide the leadership needed to steer us out of this crisis once and for all.
Tags: Justice, Civil Justice, Civil Legal Aid
By Mark Ladov & Neeta Pal – 01/20/12
Governor Cuomo got it exactly right in his State of the State address:
The financial crisis has taken a terrible toll on our state’s homeowners, forcing many out of their homes and putting many others at risk of foreclosure. Banks are unable or unwilling to renegotiate loans, and many of their foreclosure practices were questionable.
However, Governor Cuomo’s budget proposal failed to include a much-needed restoration of the $25 million appropriation for the Foreclosure Prevention Services Program that last year’s budget eliminated. This statewide network of housing counselors and legal aid lawyers has saved New York money by keeping families in their homes, and deserves the Governor’s support.
Foreclosures are devastating families and neighborhoods, particularly in low-income communities and communities of color. The foreclosure crisis is also dragging down our housing market. Financial analysts say that a strong response to help struggling homeowners is needed to lift our state and nation out of the current financial downturn. As Governor Cuomo declared, “We need to resolve this crisis so we can move on.”
Governor Cuomo’s budget proposal recognized that foreclosures are one of the critical issues facing New York State. Notably, he proposed the creation of a Foreclosure Relief Unit in the Department of Financial Services. This unit will focus on educating homeowners on the foreclosure process and its various rules and regulations, and will hopefully play an important role in mobilizing New Yorkers.
In addition, the governor should be applauded for proposing a judiciary budget that includes $25 million for civil legal services, a boost in state funding that will help ensure that general legal services are not further eroded due to sinking IOLTA funds and recent cuts to the federal Legal Services Corporation. Yet this $25 million is separate from what New York has been providing — and what is needed — to support the Foreclosure Prevention Services Program, which does not receive funding from the state’s judiciary budget, and which funds vital housing counseling in addition to legal services.
We have to tackle our state’s foreclosure problem on multiple fronts — by educating homeowners, but also by providing them with ongoing counseling and legal support. Since 2009, the Foreclosure Prevention Services Program has assisted more than 80,000 homeowners. The state’s $50 million investment in this program has saved New Yorkers billions of dollars by preventing families from slipping into homelessness, shoring up property values in struggling communities, and preserving our state's property tax base. This is money well spent.
Restoring the program’s funding is absolutely necessary to ensure homeowners have a voice in the foreclosure process — a judicial proceeding that is full of legal complexities. We urge Governor Cuomo and the state legislature to heed advocates’ call to restore the $25 million dedicated to housing counseling and legal services for New Yorkers at risk of foreclosure. As the Brennan Center has stated, this is a much-needed investment that will pay off for all of us.
Tags: Justice, Civil Justice, Civil Legal Aid
By Mark Ladov & Neeta Pal – 01/13/12
As our nation’s foreclosure crisis has deepened one critical response has been the expansion of mediation programs across the country. As the Department of Justice’s Access to Justice Initiative explained in a report released this week, "Foreclosure mediation is an important intervention that, if well-conceived and carefully implemented, can have overwhelmingly positive impacts on homeowners, lenders and investors, and communities." The report urges states and localities to evaluate and replicate successful mediation programs, and provides a strong framework for conducting such research.
Foreclosure Mediation: Emerging Research and Evaluation Practices highlights workshop participants' calls for the federal government to promote foreclosure mediation. Recommendations include establishing federal guidelines for foreclosure mediation programs; helping to fund state and local mediation programs; and requiring federally-backed loans to go through mediation as a condition of foreclosure. The report also emphasizes the need to evaluate what works in mediation programs, such as to mandate participation from homeowners. All of these strong recommendations would help to encourage greater responsibility and accountability among lenders and loan servicers who have too often raced to push homes into foreclosure rather than seeking creative solutions that would benefit homeowners and lenders alike.
The Brennan Center has studied the need for legal representation in foreclosure proceedings (including a report co-authored by Melanca Clark, who also co-authored this week’s DOJ release) and continues to advocate for legal representation for families in foreclosure. Recent data shows that homeowners often come to mediation without the benefits of legal assistance or other counseling. For example, in Franklin County, Ohio, 87 percent of homeowner cases scheduled for mediation did not have legal representation in 2009 and 2010. Without legal assistance, these homeowners are at a significant disadvantage to effectively navigate a system where loan servicers seem more eager to set up roadblocks than facilitate solutions.
Fortunately, many policymakers recognize the need for a greater investment in foreclosure prevention services such as legal assistance and counseling. Just this week, New York Attorney General Eric Schneiderman announced that he would direct $1 million in unused settlement funds toward foreclosure prevention legal services. We applaud this effort and urge officials in New York and across the nation to follow this example by providing adequate support for struggling homeowners. As we have stated, more needs to be done to invest in foreclosure prevention.
Encouraging mediation and investing in counseling and legal assistance pays enormous dividends by allaying the costs of foreclosures for families, communities and our nation’s economy as a whole. The Brennan Center will continue to press for access to justice in these cases, as a matter of fairness and due process, and as a necessary investment that will help all of us out of our current fiscal crisis.
Tags: Justice, Civil Legal Aid
By Laura Klein Abel – 10/24/11
This post originally appeared on the White House Champions of Change blog.
On October 13, Attorney General Eric Holder recognized me as a Champion of Change for helping low-income people get their day in court. Of course, the real heroes are the people who fight daily in court to protect their lives and their families, despite an inability to find a lawyer, language barriers, and other obstacles. Here are two of their stories.
Charles Guider was late making a mortgage payment after his mother died. When he tried to pay, none of the banks or mortgage servicers that had bought and sold the mortgage over the years would take the money. One of them filed for foreclosure. He’s still in his home today because his civil legal aid lawyer persuaded the lender to accept the money and drop the foreclosure.
Charles is one of the lucky ones. Record numbers of people are turning to the courts for help dealing with the effects of the financial crisis on their lives, including foreclosure, eviction, unjust denial of subsistence benefits, and domestic violence. The vast majority cannot afford a lawyer and cannot find one to help them for free. Nonetheless, the House of Representatives is pushing for a 27% cut in funding for the Legal Services Corporation, which provides lawyers for low-income families needing legal help. To spur discussion about the need for civil legal aid, my colleagues and I produced a series of short videos telling the stories of Charles and other homeowners. Please watch them and join us in the push for civil legal aid funding.
Maythe Ramirez tried to warn the judge in her child custody case that her husband had beaten her and might harm the children. But Ms. Ramirez speaks Spanish, and there was no interpreter in the courtroom. She later told a New York Times reporter, “It is really as if you are doing nothing in court, standing still and not being able to explain what’s really happening.”
Ms. Ramirez had the misfortune to be in court in California, a state that provides interpreters for some court cases but not others. But her story is prompting change. Colorado, Ohio, Pennsylvania and Utah are among the states that have vastly improved their court interpreter programs in the past few years. And the American Bar Association is developing a historic set of standards for language access in courts, which will help the courts educate legislators and others about the need to fund this important aspect of access to the courts.
I have spent over a decade building a national program that uses advocacy, policy analysis, scholarship, public education and litigation to ensure that the justice system works when low-income communities need it. When I hear Charles’s and Maythe’s stories, I know our work is far from over. I am proud to have the opportunity to work with my fellow Champions of Change to hold our nation to its promise of “equal justice under law.”
Tags: Justice, Civil Justice, Civil Legal Aid, Language Access
By Molly Alarcon – 10/18/11
The Senate will vote today and tomorrow on an appropriations bill that will influence two important federally supported programs: the Legal Services Corporation (LSC), which provides free civil legal aid to the poor, and Second Chance, a program that supports prisoner re-entry programs around the country. In addition, Senator Jim Webb of Virginia will introduce an amendment to create the National Criminal Justice Commission to study the country’s criminal justice system and make non-binding recommendations to Congress and the President.
The Legal Services Corporation distributes funds to legal aid programs around the country to assist low-income Americans facing civil legal problems, including foreclosure, domestic violence, and child custody disputes. LSC is meagerly funded by the federal government and, as a result, cannot keep up with demand for legal services. As the Brennan Center reported, programs around the country have been forced to lay off staff and cut back on services at a moment when a record number of Americans — 67 million — are eligible for LSC-funded help. In addition, a 1996 restriction bars LSC grantees from operating as effectively and efficiently as possible. The restriction bars grantees from using state, local and private funds for critical forms of representation, including class actions and legislative and administrative advocacy. In many states, justice planners have had to set up entirely separate organizations and law offices, funded by state and local public funders and private charitable sources, to do the work that LSC-funded programs cannot do, resulting in wasteful duplication of overhead, personnel and administrative costs. Read a short primer on the “non-LSC funds restriction,” here, and a full report by Rebekah Diller and Emily Savner on the restrictions here.
Currently, the Senate appropriations bill for Commerce, Justice, Science and Related Agencies preserves a minimal level of funding for Legal Services Corporation, and includes a provision to remove restrictions on how LSC grantees can use non-federal funds. This is good news. The Brennan Center has advocated lifting the LSC ban on non-federal funding since its adoption in the mid-1990s. For the third year in a row, the Senate bill’s inclusion of a short line to remove these restrictions, which was approved by the Appropriations Committee, is a significant accomplishment for legal aid supporters. While the Brennan Center would have liked to see funding for LSC increased to help the organization meet unmet demand, the funding level in the Senate bill is preferable to the House version, which includes only $300 million (as opposed to the Senate’s nearly $400 million). We urge the Senate to support the Legal Services Corporation clauses of the current spending bill.
The proposed appropriations bill also defunds the Second Chance Act, which is an unfortunate set-back for criminal justice reform advocates. As The New York Times editorial board noted, the Senate has its “priorities backward” on matters of criminal justice: in addition to removing all funding for Second Chance, it has proposed a $300 million increase in funding for the federal Bureau of Prisons to build new prisons. This would be a huge step backward, and the Brennan Center urges the Senate to restore funding for Second Chance.
The United States incarcerates more people — per capita and in total numbers — than any other country in the world, and since 1980, the federal prison population has increased 700 percent at a cost increase of 1,700 percent. Our criminal justice system has not been systematically reviewed since the Johnson administration in the 1960s. The National Criminal Justice Commission Act, which will be included as an amendment on the Senate spending bill, would create a blue ribbon commission to review the criminal justice system and recommend consensus-based, bipartisan reforms. Its passage would be an important first step toward developing evidence-based and cost-effective policies to increase public safety and improve our justice system.
Call your Senator today to voice your support for the Legal Services Corporation, the Second Chance Act, and the National Criminal Justice Commission Act.
Tags: Justice, Criminal Justice, Sentencing Reform, Civil Legal Aid
By Molly Alarcon & Neeta Pal – 07/08/11
Yesterday, a House subcommittee cleared a bill that would reduce federal funding for civil legal services for the poor to its lowest level in more than a decade. The House Appropriations Subcommittee on Commerce, Justice, Science and Related Agencies reported out of committee a proposal to cut the budget of the Legal Services Corporation (LSC), which funds 136 non-profit civil legal aid providers around the country, by a staggering 26 percent, or $104 million.
Under the proposal, funding would be reduced to $300 million, the same level of funding in 1999, without adjusting for inflation. The proposed cuts, which await approval by the full Appropriations Committee next week, would severely hamper the ability of already strained legal aid providers to represent low-income Americans in civil cases such as mortgage foreclosure, eviction, domestic violence, and child custody. These service cuts occur at a time when legal aid providers are already stretched thin— for every client served, one eligible client is also turned away due to lack of resources.
Federal support for civil legal aid is crucial. The 136 providers who rely on LSC for some portion of their organizational budgets have seen other sources of funding shrink dramatically in recent years, while demand for services has increased. Interest pooled from lawyers’ trust accounts, or IOLTA, which have historically constituted a significant source of private revenue, are at record lows. Legal Services of New Jersey, for example, received $40.2 million from IOLTA accounts in 2007. In 2010, IOLTA-generated income fell nearly 78 percent to $8.9 million. State funding for civil legal aid is also disappearing as legislatures tighten their budgets. This Brennan Center state-by-state overview details the funding cutbacks under which civil legal aid providers are forced to operate while demand for services continues to rise.
These proposed cuts come at a time when an increasing number of Americans are struggling financially, relying on LSC programs to address their legal needs. A record 63 million Americans are now eligible for LSC services. According to LSC data, from 2009 to 2010, foreclosure cases increased 20 percent at LSC-funded programs, unemployment compensation cases increased 10.5 percent, landlord-tenant disputes increased 7.7 percent, bankruptcy, debt relief, and consumer finance cases increased 5 percent, and domestic violence cases increased 5 percent. Providers have struggled to meet this rising demand, and have been forced to turn away eligible clients (whose legal needs are likely to go unmet). According to LSC’s preliminary estimates, about 235,000 low-income Americans eligible for civil legal assistance at LSC-funded programs would be turned away if the proposed cuts were enacted.
Congressional members in both parties recognize the importance of civil legal aid for the fair administration of justice for low-income Americans. Earlier this year, Republicans and Democrats voted down a proposal to eliminate all LSC program funding, citing the importance of civil legal aid to the livelihoods of so many Americans in rural districts and low-income communities. The proposed budget for LSC threatens the integrity and the efficiency of our justice system, while saving the federal government relatively little money. Congressional leaders must reverse these proposed cuts and restore full funding for legal aid.
Tags: Justice, Civil Justice, Civil Legal Aid
By Emily Savner – 06/28/10
Cross posted from The National Law Journal
With the legal needs of the poor rising in volume and intensity, more access to legal aid is a needed stop on the road to economic recovery.
One in every 138 U.S. households fell into foreclosure in the first quarter of 2010, 15 million Americans were unemployed in May and the unemployment rate is hanging at nearly 10%.
Although the recession may be in its waning days, thousands of vulnerable families continue to face a harsh economic reality and, increasingly, need legal help. The legal needs of the poor and working poor are rising in both volume and intensity. Those unable to afford a private attorney increasingly need counsel to stave off foreclosure and eviction and fight unscrupulous lenders; obtain unemployment insurance benefits, food stamps and other income supplements that help their families stay afloat; and protect themselves and their children from abusive spouses as the incidence of domestic violence rises during harsh financial times.
And now, more poor families are being created. With ongoing unemployment, an increasing number of families is falling into poverty and becoming eligible for federally funded legal aid. Almost 54 million Americans qualified in 2008 — about 3 million more than in 2007. And given the dramatic increase in unemployment from 2008, the number of eligible clients is expected to rise further.
In state after state, people are encountering severe shortcomings in the delivery of legal services, exactly when they need those services most. More and more people are seeking the help of their local legal aid offices, programs are reporting that requests for assistance are skyrocketing, telephone intake lines are jammed with calls and wait times in their offices are growing from minutes to hours.
The Legal Aid Society in New York City, for example, reported a 16% increase in clients seeking domestic violence-related help, a 40% increase in health cases, a 30% increase in employment-related cases and a 20% increase in housing cases from the recession's start to July 2009. Legal services programs in Maryland reported a 60% jump in requests for assistance from 2008 to 2010. And in Florida, one program alone, Community Legal Services of Mid-Florida, has seen a 700% increase in the number of people seeking advice [in bankruptcy matters] in the 12 counties it serves.
There is no doubt that legal aid programs were already at capacity before this recession's fallout: In 2005, legal services programs receiving federal funding reported being able to serve fewer than half of the eligible clients seeking their help. Today, with more people seeking legal assistance and the recession having dealt a huge funding blow to legal aid programs, an even smaller portion of those in need is receiving help.
After the Legal Services Corp. — which distributes federal funds to local legal aid programs — the second-largest source of legal aid revenue has been from state-based Interest on Lawyers' Trust Accounts (IOLTA) programs, which pool interest earned on the funds that private attorneys temporarily hold for their clients. But recent interest-rate drops have left IOLTA programs with dwindling sums to disburse. Nationally, IOLTA revenue dropped from $371 million in 2007 to an estimated $92 million in 2009, a 75% decrease.
In some states, vast IOLTA shortfalls, along with state budget cuts, are forcing legal aid programs to close offices, lay off staff and assist fewer clients. In Wisconsin, IOLTA revenue dropped 92% in 2009, from $897,000 to $67,000, resulting in an expected 30% reduction in staff across multiple legal aid programs. The statewide organization coordinating legal services in New Jersey expected only $3 million in IOLTA funds for fiscal year 2010, compared to $12.4 million in fiscal 2009 and $40 million in fiscal 2008; every million dollars lost means 10 staff positions cut and 1,100 fewer clients served. And in Massachusetts, a $1.5 million drop in state support and a $10 million drop in IOLTA revenue lowered local legal aid budgets by 54% in 2009, a cut that was expected to lead to an 18% decline in client services and leave approximately 20,000 individuals without the legal help they need.
In addition to these funding woes, the ability of low-income people to access legal aid is hindered by 15-year-old congressional restrictions that prevent attorneys at federally funded civil legal services programs from employing all the crucial advocacy tools available to every other attorney. Because of these restrictions, clients of federally supported legal aid programs cannot get the comprehensive relief that, at times, only a class action can provide, nor can cash-poor legal aid programs capitalize on the efficiency benefits of a class action, forcing programs to litigate individual cases one by one — bad for clients and programs. Too often, the voices of poor families are silenced by restrictions that severely limit the extent to which their lawyers can advocate on their behalf before lawmakers in order to correct bad policies. And fewer eligible people are able to receive help because legal aid programs are forced to waste money on duplicative structures if they wish to "unrestrict" their nonfederal money.
Though legal aid is not a cure-all, it can save families from the hardest edges of the downturn and it can help communities recover faster. Lawmakers should take steps to increase access to civil legal services while the poor continue to be battered by the recession: increase federal funding for legal services, lift federal restrictions hindering representation and pass legislation currently pending in Congress — introduced by Sen. Tom Harkin (D-Iowa) and Rep. Bobby Scott (D-Va.) — to improve and revitalize the federal commitment to legal aid, the Civil Access to Justice Act. Wider repercussions are felt by us all when the legal needs of significant segments of the population go unmet: The public can lose faith in the judicial system, and our promise of "equal justice for all" can itself fall victim to the recession.
For more on the rising need and falling funding for civil legal services, visit the Brennan Center's Web site at www.brennancenter.org/economy_and_legal_aid.
Tags: Justice, Civil Justice, Civil Legal Aid
By Brennan Center for Justice – 05/03/10
In a speech given May 3, the Hon. Jonathan Lippman, chief judge of the NY Court of Appeals, proposed a 'Civil Gideon' program, one which would provide right to counsel in New York State for the indigent in cases involving basic human needs. According to a 2008 study by Brennan Center counsel Laura Abel, every year least 80% of the civil legal needs of low-income New Yorkers go unmet, and the majority of these concern core issues such as housing, child custody, food, employment, and health. Judge Lippman plans to set up statewide hearings to assess legal needs. The NY Times has more background.
Tags: Justice, Civil Legal Aid, Civil Right to Counsel
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