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Foreclosures: A Crisis in Legal Representation

  • Maggie Barron
  • Melanca Clark
Published: October 6, 2009

About the Center’s Access to Justice Project
About the Authors

The nation’s massive fore­clos­ure crisis is also, at its heart, a legal crisis. Many homeown­ers are losing their homes because they lack the abil­ity to navig­ate the land­scape of our lend­ing laws. The Legal Services Corpor­a­tion (“LSC”), the major federal source of fund­ing for civil repres­ent­a­tion for the poor, reports that nonprofit legal services programs across the nation are “besieged with requests for fore­clos­ure assist­ance.” Too few people are ever able to obtain qual­i­fied legal guid­ance. Accord­ing to our find­ings:

  • In Connecti­cut, over 60 percent of defend­ants facing prop­erty fore­clos­ure in 2007–08 did not have coun­sel.
  • In New York, 84 percent of defend­ants in proceed­ings in Queens County involving fore­clos­ures on “subprime,” “high cost” or “non-tradi­tional” mort­gages (which are mort­gages dispro­por­tion­ately targeted to low-income and minor­ity homeown­ers) proceeded without full legal repres­ent­a­tion. In Rich­mond County (Staten Island), 91 percent of such defend­ants were unrep­res­en­ted, and in Nassau county, 92 percent were unrep­res­en­ted.
  • In Stark County, Ohio, heav­ily impacted by fore­clos­ures, data suggests that 86 percent of defend­ants facing prop­erty fore­clos­ure did not have coun­sel in 2008.

Why Having a Lawyer Matters

Fore­clos­ures may be inev­it­able for many indi­vidu­als, but not for all. Legal repres­ent­a­tion can help many homeown­ers save their homes and, more broadly, help to stabil­ize neigh­bor­hoods at risk.

Many people have legit­im­ate legal defenses that can halt fore­clos­ure actions, or help open the door to altern­at­ive solu­tions, such as mort­gage refin­an­cing. But few homeown­ers and tenants are aware of their legal defenses. Among other import­ant inter­ven­tions, lawyers can identify viol­a­tions of state and federal laws, enforce consumer protec­tion laws, and advance defenses that can either inspire lenders to agree on sustain­able loan terms, or slow fore­clos­ure proceed­ings enough to create time in which to obtain altern­at­ive hous­ing.

Barri­ers to Repres­ent­a­tion

Our nation’s civil legal aid system is ill-equipped to deal with increased demand for legal services. Civil legal aid, always under­fun­ded, has suffered from acute short­ages since federal funds were cut by one-third in 1996. Moreover, just as the need for legal repres­ent­a­tion has reached its apex, the reces­sion has forced state and local govern­ments and private char­it­ies to cut their support for legal services.

Further compound­ing the prob­lem, federal restric­tions imposed by the Congress on the Legal Services Corpor­a­tion as an outgrowth of Newt Gingrich’s “Contract with Amer­ica,” have under­cut homeown­ers’ efforts to obtain protec­tion from pred­at­ory lenders. Abus­ive lenders enjoy a full arsenal of legal tools, while homeown­ers rely­ing on restric­ted legal aid attor­neys are barred from join­ing class actions, claim­ing attor­neys’ fee awards, or rely­ing on their attor­neys to advoc­ate before legis­latures and admin­is­trat­ive bodies. Congress, through the 2008 Hous­ing and Economic Recov­ery Act, provided one-time fund­ing for lawyers to help fore­clos­ure victims, but then expli­citly prohib­ited the lawyers it had funded from enga­ging in any litig­a­tion.

Our under­fun­ded and restric­ted civil legal aid system is crit­ic­ally import­ant for African-Amer­ican and Latino communit­ies, which are more likely than other communit­ies to be injured by pred­at­ory lend­ing prac­tices and to require the assist­ance of publicly funded coun­sel. Insuf­fi­cient legal resources exacer­bates the wealth divide between these communit­ies and the rest of the nation and under­mines the legit­im­acy of our justice system by perpetu­at­ing two systems of justice, one for people with means and another, inferior system for the poor.


The Bren­nan Center offers the follow­ing recom­mend­a­tions:

1. Increase fund­ing for fore­clos­ure legal repres­ent­a­tion – Addi­tional state and federal dollars should be dedic­ated to fore­clos­ure legal assist­ance and direc­ted to the hard­est hit areas, often the areas with predom­in­antly minor­ity resid­ent popu­la­tions.

2. Remove fund­ing restric­tions that under­cut effect­ive legal advocacy for homeown­ers and tenants – Lift­ing the LSC fund­ing restric­tions, a cost-free fix, is among the easi­est and most cost-effect­ive ways to improve legal repres­ent­a­tion for fore­clos­ure victims.

3. Expand access to the courts and to other dispute resol­u­tion mech­an­isms for homeown­ers facing fore­clos­ure proceed­ings - States that allow fore­clos­ures to proceed without accord­ing homeown­ers a day in court need reform. In every state, lenders should be required to parti­cip­ate in a medi­ation confer­ence with homeown­ers before a fore­clos­ure is permit­ted to proceed.

4. Recog­nize a right to consult with a trained hous­ing coun­selor and, as neces­sary, a lawyer - Fore­clos­ure proceed­ings should be deferred until the homeowner has consul­ted with either a trained hous­ing coun­selor, or, where lend­ing viol­a­tions are suspec­ted, a lawyer.

Note: The Bren­nan Center does not repres­ent indi­vidu­als in fore­clos­ure actions. If you are in need of free or low-cost legal assist­ance please visit


AnchorAbout the Bren­nan Center’s Access to Justice Project

The Access to Justice Project at the Bren­nan Center for Justice is one of the few national initi­at­ives dedic­ated to help­ing ensure that low-income indi­vidu­als, famil­ies and communit­ies are able to secure effect­ive access to the courts and other public insti­tu­tions. The Center advances public educa­tion, research, coun­sel­ing, and litig­a­tion initi­at­ives, and part­ners with a broad range of allies – includ­ing civil legal aid lawyers (both in govern­ment-funded and privately-funded programs), crim­inal defense attor­neys (both public defend­ers and private attor­neys), poli­cy­makers, low-income indi­vidu­als, the media and opin­ion elites. The Center works to promote policies that empower those who are vulner­able, whether the prob­lem is evic­tion; pred­at­ory lend­ing; govern­ment bureau­cracy (includ­ing, in some instances, the courts them­selves); employ­ers who deny wages; abus­ive spouses in custody disputes or in domestic viol­ence matters; or other prob­lems that people seek to resolve in reli­ance on the rule of law.

AnchorAbout the Authors

Melanca Clark is Coun­sel in the Justice Program at the Bren­nan Center for Justice. Prior to join­ing the Bren­nan Center, Ms. Clark was a John J. Gibbons Fellow in Public Interest and Consti­tu­tional Law where she litig­ated cases in the areas of civil rights, civil liber­ties, pris­on­ers’ rights, and crim­inal law. Before the Gibbons Fellow­ship, Ms. Clark was a Skad­den Fellow at the NAACP Legal Defense and Educa­tion Fund, Inc. Ms. Clark has also worked as a litig­a­tion asso­ci­ate at Paul, Weiss, Rifkind, Whar­ton & Garrison, and was law clerk for Judge Joseph A. Green­away, Jr., of the U.S. District Court for the District of New Jersey. She received her J.D. from Harvard Law School, and her B.A. from Brown Univer­sity.

Maggie Barron arrived at the Bren­nan Center in Septem­ber 2007 as a Commu­nic­a­tions and Strategy Asso­ci­ate. Prior to join­ing the Bren­nan Center, Ms. Barron was the Exec­ut­ive Assist­ant at the Alli­ance for a Health­ier Gener­a­tion, a joint initi­at­ive of the William J. Clin­ton Found­a­tion and the Amer­ican Heart Asso­ci­ation, dedic­ated to fight­ing child­hood obesity. She recently completed her masters degree at the London School of Econom­ics in City Design and Social Science. Ms. Barron received her B.A. in History from Brown Univer­sity in 2005.