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Legal Aide for the Elderly and Poor Facing Home ForeclosuresWritten by: Ronald Anthony Sarno Reputation Level 20
Posted over 2 years ago. 2 helpful votes, 1 comment
1
Will I lose my home?This question is often posted on avvo from desperate people unsure what to do. Unscrupulous collection services often make such threats to people unable to keep up with their payments. On the other side are the dream merchants, who scam these same people by promising them the "debts will go away:" if they just fork over the last of their remaining money to them. Too often these scams promise a whole lot but deliver nothing but heartache. Keep in mind, only the Lender who holds a Mortgage on your property can file a foreclosure suit.. And that does not mean they take immediate possession of your home: there is a legal process involved and there must be a lawsuit, a judgment, a sheriff sale. Debtors only lose their home and all the money value in it if the sale value of the home is less than the mortgage and foreclosure costs. If it is not and there are no other major debts, the surplus must be returned to the owner. 2
Creditors who are not the Mortgage HolderOther creditors will sometimes terrorize debtors into believing that if they do not pay their debt they will also lose their home. This is a gross and misleading statement. Keep in mind that a creditor who is not the mortgage lender must go to court, file suit, litigate, and obtain a judgment. A judgment is a court order which allows the creditor to attach an asset (wage garnishment), or bank account, or anticipate a payment when a home you own is sold. For the most part only a mortgage holder or a person with a legitimate claim to the property (another owner) can force the sale of a home. Creditors who are not Lenders do not legally qualify to force the sale of your home. 3
Lack of Legal Representationin New York the Brennan Center for Justice reports that 84% of Queens defendants facing foreclosure because of a subprime mortgage (a loan given to borrowers who did not qualify or who bought a home whose value was less than the amount of the mortgage) went to court without a lawyer. In Staten Island the number was 91% and in Nassau (part of Long Island) 92%. Before the crisis 80% of the poor did not have access to legal help, one of the reasons such families were tricked into these mortgages in the first place. Another issue is that since the mid 1990's there are federal restrictions placed on Legal Aide. The rules require that federally funded lawyers in foreclosure cases cannot join in class action suits. Such lawyers also cannot receive fee awards that are given to private attorneys. 4
The Legal Problems of the Poor and ElderlyThe result of this is that bank lawyers are fully financed and have all of the legal resources needed to get a foreclosure order from the court, but too often the poor or elderly homeowner has to do it alone. Even when they do have legal representation from a Legal Aide lawyer, the attorney is not as effective because of the government restrictions placed on the lawyer. Obviously one solution is to have both the federal and state government provide more funds for defending against home foreclosures. This is taxpayer money which will preserve homes and avoid the abandonment of property. New York City council has been considering a municipal bill to provide seniors with legal help when they are facing foreclosure. The NY State Bar Association has passed a resolution asking the state legislature to provide the same legal right for the poor. Judge Qoing has made a similar recommendation after considering the plight of the poor in the unequal legal battle. 5
The Unequal Courtroom BattleToo often the poor and elderly when they face the legal complications of defending a foreclosure do not have the financial resources to hire a defense attorney. This means the poor are set up for a double loss. New York State and other states are now beginning to provide competent legal assistance to such defendants. What many people do not realize is they may have viable defenses against these lawsuits especially if they were given a subprime mortgage when they did not have the resources to make the more expensive payments later on, or there was a phoney appraisal done of their new home inflating its true value and deceiving the Lender. 6
Let your voice be heardIf you are a citizen of a state such as New York, which is thinking about such a program, consider contacting your state or federal representative. The more Legal Aide available to the poor and elderly, and the less restrictions on federally funded attorneys now unable to file class action suits and collect additional fees, the better chance we will have to preserve our homes. Also Judge Qoing in New York has filed a report about how most defendants in a foreclosure action cannot afford an attorney and lose their home due to legal default. New York State and many others are considering funding more legal aide services for poor people facing foreclosure suits. 7
The Banks fall flat on their faceMany banks have merged or bought other banks. Sometimes the bank which gave the Borrower the original Mortgage is out of business and re-assigned their Mortgage to a new bank. In many states the law requires that the Bank which forecloses on a borrower MUST have in its possession the original Note executed by the original Lender and the Borrower. Many times these original papers have been lost, misplaced or misfiled. Often banks in foreclosure actions have submitted false affidavits from bank officiers or "robo-signers" that they have seen the original documents when they really have not. At first courts thought this was a minor matter, but thanks to some very aggressive defense lawyers, courts now realize that this is a serious legal flaw, and banks now know they better not go into court unless they have these original papers and the officer who signs the affidavit is in actual possession. New Jersey is seriously considering suspending these foreclosure cases because of these lies. Additional ResourcesAdditional avvo legal guides on this topic:
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